Where Should You Launch Your Startup? — Charles Kane

MIT Sloan Sr. Lecturer Charles Kane

From Forbes

There is a lot of buzz lately about entrepreneurship hotspots across the country. We hear about successful startups in many places, from Austin, Tex., to Reston, Va. What does this mean for entrepreneurs? If you’re launching a startup, does it really matter where you locate?

Yes, it does matter. If you’re starting out, it’s by far best to be in either Silicon Valley or the Boston area. They remain the hottest centers of entrepreneurship and venture capital, so you’ll be in an inherently supportive ecosystem where entrepreneurship is as natural as drinking water.

You’ll also be closer to funders, whether you need a few thousand dollars or millions. With a long history of investing, many of the angels and venture capitalists in these areas are bigger risk takers than investors elsewhere. With their successes, they look to roll their money from one big hit into others. These places are where the big money resides and big successes happen. And investors tend to have a natural affinity for locally based startups. This is inevitable, as it allows an investor to stay more involved with the investment.

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Charles Kane is Senior Lecturer in finance at the MIT Sloan School of Management, former president of One Laptop per Child, and coauthor of Learning to Change the World: The Social Impact of One Laptop per Child.

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