A City-Based Visualization of Funding Flows


What might you learn if you analyze 14 years of city-specific funding data?

Humans have always associated innovation with place — from Florence to Silicon Valley. However, research on the geographic distribution of venture capital, insights necessary for progressive cities to thrive, is tentative at best.

But the data is out there.

By bridging sociology, statistics, economics, and computer science, our team of researchers at Harvard has analyzed and spatially visualized 57,000 venture capital investments from 2000–2014. Patterns within the data show the role cities play within the venture capital landscape. We built this comprehensive visualization revealing where funds are flowing, who is funding whom, and which sectors have been the most active over the past 14 years.

To understand the role that geography plays within the venture ecosystem, we used two metrics as proxies for domestic investment activity. The first metric is the percentage of money that VC firms invested in companies within the same city. The second metric is the amount of money that companies raised from investors within the same city as a percentage of the total amount of funds raised. After combining our results with data-driven analysis, we’ve identified recurring patterns that have enabled us to classify cities into four investment groups.

Here’s what we’ve found.

1. Self-Sustaining Cities

San Francisco’s Domestic Investments

Self-sustaining cities are characterized by substantial domestic investments by local firms. This creates what many would call a virtuous circle: more investments result in more successful companies, causing more companies to relocate to the area, spurring more funding, and repeating the cycle. While the data pinpoints San Francisco and Boston as examples of self-sustaining cities, surprisingly enough, it shows that New York belongs to a different category — reaffirming the importance of using data before broadly characterizing big cities.

2. Finance Centers

New York’s Global Investments

Finance centers are characterized by disproportionately high venture capital. They are opposite of tech hubs — for although startups in these cities are well-funded by local investors, the majority of local investment goes towards financing innovation in other cities due to venture capital outweighing local needs. New York City, as identified by the 2000–2014 data, is an example of a domestic finance center, while London and Paris are examples of international finance centers. Click on a node to see the companies and cities that these centers are funding.

3. Tech Hubs

Domestic Funding for Austin, 00–14′

Tech hubs are areas that have experienced a disproportionate inflow of investment money. Tech hubs are different from self-sustaining cities in that the percentage of outside investments flowing into the city dwarfs the percentage of local investments — indicating that opportunities to establish upstart, local venture capital firms may exist due to the high quality of regional companies. Cities in this category include Salt Lake City, Austin, and North Carolina’s research triangle (consisting of Raleigh, Durham, Cary, and Chapel Hill). To see where these tech hubs are getting funding, click on a node when exploring the map.

4. Spatially Mismatched Cities

Showing spatial mismatch, Baltimore VC invests more funding in other cities.

Spatially mismatched cities have low venture capital and startup activity that cannot be consistently characterized as tech hubs, self-sustaining cities, or finance centers. These are regions in which companies aren’t raising money from local firms or external players at a significant level. Investors, if any, invest in other cities. Companies raise money from other cities. It is important to note, however, that whether or not a city is considered spatially mismatched depends on which industry is being analyzed. For example, Minneapolis is considered self-sustaining for biotech, but spatially mismatched for all other industries.


Ultimately, our analysis of venture capital flows shows the interconnectedness of funding — demonstrating not only the importance of place, but the importance of connection to place as indicated by their complex relationships, and the role that cities play geographically within the investment landscape as shown through their funding activity. As venture financing becomes increasingly important, grouping cities by geographic data allows us to not only better understand the nature of funding, but also its distribution.

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