Matt Shapiro, a second year MBA student at the Yale School of Management and part time Associate with LaunchCapital, a seed stage venture capital firm, authored the first Entrepreneur’s Census asking a range of questions to co-founders and ceo’s on why they landed in their city and analyzed the behaviors in each city with a series of questions ranging from fundraising to hiring.
As a NYC to Silicon Valley transplant I was very interested in the results of the census and passed it out to the Silicon Valley New Tech Meetup.
The results that most interested me:
- 40% of startups in Palo Alto reached the financing they sought vs. only 24% in NY (graph above)
- The leading reason for why founders picked a city was due to a prior job, university came in 2nd.
- Software-as-a-Service beat out Advertising as a revenue model 2-to-1
- The peak tiers for number of employees were 4-7 for NY and Boston, and 2 for Palo Alto, which would indicate a larger percentage earlier stage companies in Palo Alto, and a larger percentage of more mature companies in NY.
- 42% of startups in NYC don’t pay for rent, vs. 22% in Palo Alto. With an avg. rent of $733/employee in NYC vs. $475/employee in Palo Alto, I can see why there’s a need for free rent! Also, as a former NY’r, it’s much hader to create the live/work spaces that you have in Silicon Valley, such as our our Meetro house that crammed 8 guys into one apartment for living and working.
- Angel Access – Silicon Valley has the numbers, with 17% of companies speaking to 20 or more angels in Palo Alto, compared to 7% in NYC. Though the flip side of this could be our crazy west coast ideas sometimes need to land on more ears then those solid business plans in NYC.
Read the full research report below or head to the 2010 Entrepreneur Census website.