Midwest Meets the Coasts: Chicago a Rising Startup Hub
Among other factors, Chicago frequently loses its best innovators to the coasts and fails to match up to the sheer volume of venture capital money being raises in other cities.
But, that doesn’t mean Chicago isn’t thriving.
While the Bay Area has ruled tech innovations and venture capital for many years now, a recent study by PitchBook puts Chicago at the top of the list. Rather than ranking the cities by total venture capital investment, this study takes a look at each city on the basis of success and return on venture capital investment. In short, the most profitable city for start-ups based on this alternative criteria is the Midwestern metropolis.
Of course, as with any data set, there are different ways to analyze the numbers and find different outcomes. But, it’s clear that Chicago startups produce a much larger return on VC investment than any other city, with 81 percent of investments yielding between three and 10 times initial investment.
The city didn’t just beat out the others by a few percentage points – Chicago produced overwhelmingly more ROI than New York and the others.
Chicago does have a substantially smaller number of companies on which to base these numbers, but just last year the city was ranked as one of the fastest growing markets for number of startups.
There is also a fantastic tech culture with the diversity to support and grow new ideas. With these kind of benefits and a high ROI for such a large percentage of startups, we may be seeing more startups opening and staying in Chicago.