Hard to believe? Note the per capita qualifier. In fairness, NY based startups raised over $4.2 billion in venture funding in 2014 compared to Utah’s paltry $800 million. *sniff* Utah didn’t bring home more total money, but they brought home a lot and did it with a much smaller population. So, I don’t find it too far a stretch to say that Utah entrepreneurs are akin to the 300 Spartans at Thermopolae—only at winning over venture capitalists instead of Persian immortals.
Utah’s growing ability to capture venture funding has enjoyed some pretty good press. In straight-up comparisons, Utah fares pretty well. It’s been a good season for Utah. Accolades for Utah and the companies here have been voluminous. One Inc. article even taunted Move Over Silicon Valley: Utah has arrived. Now if you’re in Silicon Valley, that seems a bit silly. But that’s because the Bay has such a HUGE lead. In fact, Utah is probably drafting Sandhill Road, close enough to fly out and back in the same day, and catching some of the slush that washes over the gunwales from the Bay Area. No matter, Utah companies are getting it done. Local firms and their ability to attract both number and dollar volume of funding deals has been outstanding in 2014.
What interested me was trying to see how Utah stacked up against the usual venture capital suspects per capita. I wanted to look at those numbers. I mean Utah lags way behind any of the biggies if we are just looking at the totals. I hadn’t seen anyone do a per capital comparison. Why would that matter? Well, I assumed that the amount of funding captured by a given population would represent a certain funding fitness that summed up all the elements at work in producing funding-worthy companies and entrepreneurs. You know, out of n population, we generated x number of fundable deals. There are other measures, for instance the Tech Startup Density reported by NerdWallet (Salt Lake and Provo made the top 20 in the U.S.). But that doesn’t tell me much of what I want to know. If I’m an entrepreneur, where do I go to marinade in the right ecosystem to build and fund a successful company. … And, what if I don’t want to live in the Bay Area?
So I compared state census data and a report from the NVCA and PwC, and came up with the following top 10 states based on venture capital dollars raised per capita. The numbers were stronger than I expected. Utah came in third in per capita venture funding raised. We were behind New York and Boston… way behind, but still in front of 47 other states and that includes New York! Utah was almost twice the national average, which skews high because of the monolithic golden state (take CA out of the mix and Utah is over 4x higher than the U.S. average per capita).
It’s no surprise to find CA in first place. Silicon Valley is practically synonymous with Venture Capital. Utah at number three, was a surprise. Edging out NY for per capita VC raised is pretty much the greatest upset since the BYU women’s basketball team upset No. 1 seed Gonzaga in the WCC tournament.
I’ll posit that the per capita venture capital garnered in Utah and other states, is predictive. It’s a canary in the proverbial coal mine, the tip, the surge within the peloton that forms a leading indicator of awesomeness to come. So, if you’re an entrepreneur with a great idea and an indomitable spirit… and you happen to live in Alaska or Montana (two states that garnered a combined total of zero funded deals in 2014), pack up your things and come out to Utah!