Research

Rise of the Urban Startup Neighborhood: Micro-clusters of Venture Capital and Startup Activity at the Neighborhood Level

Previous research has identified the clustering of high-tech industries, entrepreneurial startups, and venture capital across metropolitan areas. Using new detailed zip code data on venture capital investment and startup activity, this research tests two hypotheses informed by urban theory regarding the geography startup activity and venture capital investment: (1) that venture capital investment and startup activity will be concentrated in much tighter neighborhood-level micro-clusters and (2) that venture capital investment and startup activity will gravitate to denser, mixed used, transit served locations. We find considerable evidence for both. Venture capital investment and startup activity is concentrated in a relatively small number of neighborhood-level micro-clusters in the United States, the majority of which are located in dense urban neighborhoods where significantly larger than average numbers of commuters walk, bike, or use transit to get to work. This is especially the case for the leading micro-clusters of venture capital investment and startup activity.

Download this Working Paper (PDF)

Listen to the latest episode of shiftdisturbers: the MPI podcast