America's Leading Venture Capital Area Codes

A more fine-grained look at the geographic centers of start-up investment. 

Venture capital is the fuel that drives America's high-tech innovation machine. In previous posts I've examined venture capital investment and start-ups at the metro level, tracking overall levels of activity and investmentper capita trends and the factors that are associated with venture capital and start-up activity. Today, I turn to a finer-grained level of geographic detail, exploring venture capital and start-up activity across telephone area codes. 

Our analysis of area codes sheds additional light on the distribution of venture capital and start-up activity across urban and suburban areas. Previous studies, including my own, have been limited by the highly aggregated nature of venture capital data. While area codes are imperfect geographical units, they allow us to examine venture capital investment on a smaller scale than metros. The data provided to me by the National Venture Capital Association (based on data from Thomson Reuters) covers the 181 U.S. area codes that had venture capital activity in 2012. Zara Matheson of the Martin Prosperity Institute mapped the data.

The first map (above) charts the number of venture capital deals by area code. Not surprisingly, the largest concentrations are on the West and East coasts, in Silicon Valley and the San Francisco Bay Area, Los Angeles and Southern California and Seattle, and the Boston-New York-Washington corridor back East, with smaller concentrations in Austin, Denver, North Carolina's Research Triangle, Pittsburgh and several other areas.

Leading Area Codes for Venture Capital Deals
Rank Area Code Cities # of Venture Capital Deals
1 650 Silicon Valley: Palo Alto, Mountain View, Sunnyvale and Los Altos 457
2 415 San Francisco and Marin 410
3 212 Manhattan 284
4 617 Boston, Cambridge and inner suburbs 237
5 408 Silicon Valley: San Jose, Sunnyvale, Santa Clara, CA 196
6 310 West LA – Brentwood, Bel Air, Beverly Hills, Santa Monica, Manhattan Beach, Venice, Malibu 128
7 781 Route 128 suburbs outside Boston 109
8 303 Denver-Boulder 93
9 512 Austin and surrounding area 87
10 206 Seattle, Mercer Island, Bainbridge Island and Vashon Island 87
11 858 San Diego, La Jolla, Del Mar and surrounding area 86
12 412 Pittsburgh and surrounding area 71
13 510 Berkeley, Oakland, Emeryville and surrounding area 70
14 703 Northern Virginia suburbs of Washington, DC 60
15 610 Philadelphia Main Line suburbs, Allentown, Bethlehem and Reading 60
16 203 Bridgeport-Stamford-Norwalk, CT 46
17 312 Downtown Chicago 45
18 978 Northeast/Northcentral Massachusetts 42
19 949 Orange County – Irvine, Newport Beach, Laguna Beach 41
20 801 Salt Lake City, Provo and surrounding areas 41
21 215 Philadelphia and close-by suburbs 38
22 508 Southeastern, Southcentral Massachusetts, Cape Cod, Martha’s Vineyard and Nantucket 29
23 805 Santa Barbara and Ventura 28
24 919 Research Triangle, NC: Raleigh, Durham, Cary, Chapel Hill 28
25 301 Maryland suburbs of Washington, DC 28

 

The table above lists the top 25 area codes for venture capital deals. Silicon Valley, of course, takes first place – the 650 area code that includes Palo Alto, Mountain View, Sunnyvale and Los Altos. But, right behind it is the 415 area code that covers the city of San Francisco. Manhattan’s vaunted 212 area code is third. The 617 area code for the Boston-Cambridge area is fourth. Another Silicon Valley area code, the 408 area code, is fifth. West L.A.’s 310 area code – including Brentwood, Bel Air, Beverly Hills and especially Venice and Malibu ­– is in sixth place; Denver-Boulder, Austin and Seattle round out the top ten. The rest of the top 25 include urban areas like Berkeley-Oakland-Emeryville, downtown Chicago, Philadelphia, and Pittsburgh, as well as such classic suburban nerdistans as Northern Virginia and the North Carolina Research Triangle.

The second map (above) charts the dollar value of venture capital investment by area code. The same general pattern stands out, with the most substantial concentrations in Silicon Valley and the San Francisco Bay Area, in Southern California and along the Bos-Wash corridor.

Leading Area Codes for Overall Venture Capital Investment
Rank Area Code Cities Venture Capital Investment (millions)
1 650 Silicon Valley: Palo Alto, Mountain View, Sunnyvale and Los Altos $4,067
2 415 San Francisco and Marin $3,686
3 408 Silicon Valley: San Jose, Sunnyvale, Santa Clara, CA $2,024
4 212 Manhattan $1,673
5 617 Boston, Cambridge and inner suburbs $1,560
6 858 San Diego, La Jolla, Del Mar and surrounding area $1,057
7 781 Route 128 suburbs outside Boston $1,057
8 510 Berkeley, Oakland, Emeryville and surrounding area $832
9 310 West LA – Brentwood, Bel Air, Beverly Hills, Santa Monica, Manhattan Beach, Venice, Malibu $677
10 512 Austin and suburbs $626
11 206 Seattle and Mercer Island, Bainbridge Island, Vashon Island $587
12 303 Denver-Boulder $520
13 714 Orange County – Irvine $441
14 805 Santa Barbara and Ventura $354
15 978 Northeast/Northcentral Massachusetts $346
16 425 Bellevue, Redmond and Seattle suburbs $319
17 949 Orange County – Irvine, Newport Beach, Laguna Beach $316
18 801 Salt Lake City, Provo and surrounding areas $310
19 925 East Bay Area  $272
20 703 Northern Virginia suburbs of Washington DC $245
21 312 Downtown Chicago $244
22 610 Philadelphia Main Line suburbs, Allentown, Bethlehem and Reading $204
23 908 North-central New Jersey $186
24 919 Research Triangle, NC: Raleigh, Durham, Cary, Chapel Hill $184
25 508 Southeastern, South-central Massachusetts including Cape Cod, Martha’s Vineyard and Nantucket $180

 

The same general pattern emerges when we look at the top 25 area codes for venture capital investment. The top area code is again Silicon Valley’s area code 650, with a little more than $4 billion in venture capital investment. But San Francisco’s 415 area code is a close second with $3.7 billion. Area code 408, also in Silicon Valley, is now third with roughly $2 billion. Manhattan’s 212 area code is fourth with $1.7 billion; and the 617 area code for Boston-Cambridge is fifth with $1.6 billion. The rest of the top 25 include a number of urban areas – like Berkeley-Oakland-Emeryville, West L.A., downtown Chicago, and Philadelphia – as well as suburban areas in Northern Virginia, the Route 128 suburbs of Boston, the Research Triangle, and others.

This area code analysis sheds additional light on the geography of venture capital and start-up activity. It is particularly useful to help define the geography of venture capital investment in the Bay Area regions, especially the split between Silicon Valley, the suburbs, and San Francisco proper. After my third post in this series, Patrick Hoge of the San Francisco Business Times engaged me in a thoughtful email exchange about my conclusion that San Francisco had topped Silicon Valley as the nation’s number one center for venture capital. In that post I used data from the National Venture Capital Association and Thomson Reuters to compare venture capital activity and investment in San Francisco-Oakland and San Jose, according to the standard definition of those metro areas. But using that definition of the San Francisco metro area, Hoge wrote to me, includes such jurisdictions as “Redwood City, Foster City, Menlo Park – all Peninsula cities long considered part of Silicon Valley – as well as Fremont, Dublin and Pleasanton, all of which are significantly closer to San Jose both physically and one could argue spiritually, in terms of urban planning. The area code data helps us better zero in on these geographical distinctions. As Hoge noted, "415 largely equals San Francisco when it comes to venture capital, as Marin County is a relatively minor venue. 415 has risen over time, but 650 – which includes the Peninsula cities mentioned above – continues to dominate."

While Silicon Valley continues to be the number one center for venture capital investment based on our analysis of the area code data, there is also considerable activity in San Francisco and urban areas in New York, Boston, Chicago and Philadelphia. This latter trend is suggestive of an ongoing shift in venture capital and start-up activity from a long-standing focus in suburban areas to urban neighborhoods.

In my next post, I’ll use zip codes to drill down even deeper into the suburban/urban breakdown of venture capital within some of the nation’s leading tech regions, including Silicon Valley and the Bay Area, Greater New York, Boston, LA, Seattle, Washington, D.C. and more.

All maps by the Martin Prosperity Institute's Zara Matheson.

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This is the sixth in a series of posts exploring the new geography of venture capital and high-tech start-ups, and the degree to which these start-up communities are shifting from their traditional locations in the suburbs to urban areas.

About the Author

  • Richard Florida is Co-founder and Editor at Large of CityLab.com and Senior Editor at The Atlantic. He is director of the Martin Prosperity Institute at the University of Toronto and Global Research Professor at NYU. More
    Florida is author of The Rise of the Creative ClassWho's Your City?, and The Great Reset. He's also the founder of the Creative Class Group, and a list of his current clients can be found here