Philadelphia Is One of the Country’s Top 10 Rising Cities for Startups
According to a new analysis from Forbes and VC firm Revolution, young ventures in Philly are poised to thrive in the decade ahead due a variety of factors.
When AOL cofounder Steve Case visited Philadelphia this year, he observed a lot of growth in the startup community since his last visit in 2015, and suggested the startup community “hang together” to further spur momentum. Now Case’s VC firm Revolution, together with Forbes, has named Philadelphia one of the country’s top ten rising cities for startups.
The new analysis released on Monday laments the fact that a whopping 76 percent of venture capital money in 2017 was concentrated in California, New York and Massachusetts, with funds specifically landing in Silicon Valley, New York City and Boston, which are all already robust startup locales.
“Some investors are looking beyond the coasts for their next score,” Forbes wrote, as the “generational wealth created by Silicon Valley companies like Apple, Google and Facebook has created high prices inside and outside the startup world.”
It’s time to level the playing field, Steve Case told Forbes, so that “everybody, everywhere who has an idea has a shot at building a company and the American Dream.” He added, “Maybe there is too much capital in Silicon Valley, maybe valuations are too high?”
This thinking catalyzed the new quantitative analysis, in which Forbes and Revolution identified ten emerging cities where “startups are poised to thrive in the decade ahead.”
Philadelphia ranked eighth on the list behind cities like Denver, Baltimore and Portland and ahead of just Minneapolis-St. Paul and Charlotte, North Carolina.
The study looked at Philly’s deal count in recent years and its biggest recent VC deals. Philly’s three-year deal count is 548, and the city’s major VC deals were with University City biotherapeutics company Tmunity, Plymouth Meeting biopharmaceutical firm Harmony Biosciences and King of Prussia addiction recovery services group Recovery Centers of America.
And according to the study, the cost of doing business in Philadelphia is two percent above the national average, a factor that differentiated Philly from the cities at the top of the list. The top three cities in the study, Columbus, Ohio, St. Louis, and Atlanta, respectively, were below the national average for cost of doing business.
Philadelphia’s strengths identified in the study include its geographic location, universities and a cost of doing business that’s more affordable than places like New York City or Silicon Valley. Forbes wrote:
“Philadelphia offers convenient access to the East Coast hubs of Boston, New York and Washington, plus more affordable business costs. It is home to more than 100 degree-granting institutions and has the second largest university population in the U.S.”
To create the list, researchers eliminated the ten metro areas that pulled in the most VC funding in the last three years: San Francisco, New York Boston, San Jose, Los Angeles, San Diego, Seattle, Chicago, Washington, D.C. and Austin.
Researchers then compared the 30 largest metro areas, outside the ten listed above, on 13 metrics including costs of doing business and living, venture capital investments, education levels, college presence, entrepreneurship rates, and working-age population growth. To see the complete ranking, click here.