Choosing a City for Your Startup

It's investor day today for TechStars companies. The latest crop of companies from this mentorship-driven seed stage investment program was impressive. That's Josh Fraser introducing Adstruc who have a pretty brilliant idea that's sure to have an impact in the outdoor ad industry. Some of the founders for those companies are from Boulder (like Spot Influence) while others came here specifically for the TechStars program (such as Adstruc who are from New York--a billboard & advertising mecca. Which of course, is a natural fit for their company). just came out with the results for their survey on the best cities for young entrepreneurs. The list included the usual suspects that appear on many "best of" lists.  Chicago, Seattle, New York and the like. While some of the choices are dead on I disagree with some of their choices. And, more importantly. Their methodology.  This got me to thinking about how to choose a city for your startup.

Choose Your Criteria Wisely

The criteria they include on this survey include: resources available, schools, social atmosphere, weather and networking opportunities. While these are good things to think about there are some other things they're missing. For example: What is the climate like for entrepreneurial ventures? What is the city known for industry-wise?  They're also missing the boat on what's going to make an new entrepreneur successful.

Let's take my former hometown as an example. Chicago may be a very large city with lots of fun things to do. I know. I lived there for 12 years. Is Michigan Avenue with its expensive stores really going to be a draw for a debt-ladden/low or no income entrepreneur? Are they going to be lounging on the shores of Lake Michigan? Somehow I doubt it. This is probably good information for say an under 30 professional but less so for someone who's running and gunning to get a new business off the ground.

Yes, But What Kind of Startup?

The kind of business you want to start is key in making the "What city should I start my company in?" decision. Let's go back to the previous example. Chicago is well suited for professionals who like large companies--in fact many have their headquarters there including Kraft, Boeing, Sears and the like. The biggies there are financial services, management consulting and pharma. Now if your startup directly serves those industries by all means--go there. Starting a professional services firm? Yes. A technology startup? Not so much. There just isn't a large community there for it.  Deanna and Brett, former Chicagoans moved to Boulder to go through the TechStars program with Rent Monitor. And they're staying.

For the tech startup world I'm gonna go with the Bay area (natch), Austin or my current hometown of Boulder.  Why? They're magnets for some of the best technical minds in the our country.  You're more likely to find people with money to spend on these ventures there.  And? They all have great indicators for quality of life: easy access to the outdoors, good weather and a high concentration of smart, educated folks. From the 2010 TechStar class, Boulder's own RoundPegg is a good example of a company that's a good fit with a city with a high concentration of tech talent AND all the amenities that attracts good talent.


One size really doesn't fit all when it comes to making a huge decision like deciding where to found a startup venture. A big city isn't necessarily better than a small one. Bars, beaches and boutiques probably shouldn't be a big part of the decision making criteria for an entrepreneur. In order to be truly useful you need to identify the right criteria to get the most pertinent information.

Other things entrepreneurs need to consider in selecting a city:

  • Amount of entrepreneurs in the area. (indicates support you may receive from other entrepreneurs and the community)
  • Access to venture capital, angel investors and other funding options.
  • The presence of incubators and mentorship-driven seed programs like TechStars.
  • Where your co-founder is located and wants to be located. (because co-located teams can be difficult in the early stages)

And one that is hard to quantify but incredibly important: Does it feel like a city that I can thrive in?

What do you think makes a city a good choice for an entrepreneur?