Raising capital is hard. No ifs, ands, or buts about it. It’s just difficult. And when you have to go outside of town for that capital, that makes it exponentially more challenging — and complex. But if this recent report from Rise of the Rest tells us anything, it’s that Portland startups are doing a decent job of dealing with that additional complexity. And landing early stage capital from outside of the state.
2021 is turning into a record year for venture, but where are those dollars going? Not where you might expect. For the first time in more than a decade, the proportion of seed- and early-stage capital invested in Bay Area Startups is on pace to drop below 30%.
Having visited, backed, and spotlighted companies in rising startup ecosystems for the last decade, Revolution’s Rise of the Rest Seed Fund partnered with PitchBook to take a closer look at this seismic shift.
In terms of early stage capital from Bay Area firms, Portland ranks 14th at $852 million invested in the region over the last 10 years. Laudable. But maybe not as impressive as other cities higher on the list, given our geographic proximity to that capital.
But for early stage capital coming out of New York, Portland doesn’t have the proximity — and we’re still ranking fairly well at 18th with $471 million invested in startups over the last decade.
It is interesting to note, however, that Portland ranks 25th in the US in terms of population. So we’re seeing a higher per capita investment rate in startups than some of the other cities on the list that boast far larger populations. Like Austin, Chicago, Denver, LA, and Phoenix. [UPDATE: Turns out these assumptions were wrong. I did some additional analysis.]
Not familiar with Rise of the Rest? It’s an effort founded by former AOL CEO Steve Case as part of his Revolution fund. And it’s based upon the belief that there is interesting startup activity across the US. Not just in the Bay Area and New York.
Nearly 75 percent of all venture capital investment goes to just three states: California, New York, and Massachusetts. At Revolution, we focus on venture communities in high-potential geographies because we know from experience that while talent is well distributed, opportunity is not.
For more, download the full report from Revolution.