Does where you start your company matter? Statistically, it may. Jim Karsten pulled data from CrunchBase to look at where startups are based and the likelihood of an acquisition. The results show that 41.2% of startups that we track are based in Silicon Valley, but that those startups account for 53.3% of the reported acquisitions. A startup based in Silicon Valley has a 6.9% chance of being acquired. New York startups come in second with a 4.9% acquisition rate.
It’s not clear exactly what data was pulled (years, transaction size, etc.), although there are more details here. We’re running our own analysis of the data over the last few years (back to startups founded in 2004 and later, to take into account transaction sizes and to include international data) and should have a deeper dive available soon. But until then, the data is clear – all else being equal, start your company in Silicon Valley. Although we strongly suggest that before you relocate your family and employees you wait for our more detailed analysis.
The bottom line is this. If you have the means, start your company in Silicon Valley. It’s the big leagues. Like I said last year to those crazy Seattleites that keep saying they’re basically a suburb of Silicon Valley: “If staring at lakes and skiing after work are important to you, don’t pretend to be surprised when your startup doesn’t cut it.”