15 Top Cities for Tech Startups

If you're considering working for a tech startup or launching one of your own and need to know where the venture capital is flowing, one of these cities may soon be the place you call home.

tech startups

San Francisco edges out Silicon Valley rival San Jose as the most attractive area for tech startups, according to a recent report from the National Venture Capital Association (NVCA).

Whether you're considering launching a tech startup of your own and you need to know where the venture capital is flowing or you just want to work in one, these cities may soon be the place you call home. CIO.com spoke with, Michael Heesen, president of the NVCA for insight into some of the factors driving the trends inside these growing startup communities.

The NVCA list measures overall venture capital investment in each respective market to compile its data.

Boulder, Colo. tech startup
Credit: iStockphoto
15. Boulder, Colo.

The first stop on our countdown is Boulder, Colorado. Boulder is a small city with a big entrepreneurial edge. The NVCA attributes this to the University of Colorado; graduates want to remain in Boulder. It's a very hip and happening kind of town that draws entrepreneurs and venture capitalists alike. "They've had some successful venture firms and companies, as well as some strong incubators in that Boulder market. It's a very small city that breaks into the top 15," says Heesen.

No. of Deals: 28
No. of Startups: 27
Sum of Equity Invested (USD millions): 130.03

Denver Colo. tech startups
Credit: Hemera
14. Denver Colo.

The Mile High City has been a startup hotbed for years thanks to names like PhotoBucket and TechStars. "The city has easy transportation (flights) for out of state VCs, its proximity to Boulder helps and accelerators such as Tech Stars flourish in the region," says Heesen. CEO David Cohen was quoted in USA Today saying that his company TechStars takes on 50 companies a year with a fund for startups at $80 million.

No. of Deals: 31
No. of Startups: 24
Sum of Equity Invested (USD millions): 141.33

Pittsburgh Pa. tech startups
Credit: iStockphoto
13. Pittsburgh Pa.

Combine a great university like Carnegie Mellon and a state that is working to attract entrepreneurs and startups with legislation like the Ben Franklin Partnership and other state programs and you come to Pittsburgh, the Steel City. Pennsylvania has been encouraging this type of high-tech entrepreneurial business for more than 30 years, according to Heesen. Many startups here, like in Philadelphia, have taken advantage of state programs to help get their business off the ground.

No. of Deals: 42
No. of Startups: 34
Sum of Equity Invested (USD millions): 87.70

Atlanta, Ga. tech startups
Credit: iStockphoto
12. Atlanta, Ga.

"Atlanta continues to be the main city for startups in the south," says Heesen. The driving factors in Atlanta, according to the NVCA, are several good schools such as Emery, the University of Georgia and Georgia Tech. The younger crowds in the south tend to gravitate to the larger city of Atlanta.

No. of Deals: 45
No. of Startups: 37
Sum of Equity Invested (USD millions): 205.98

Oakland, Calif. tech startups
Credit: Photos.com
11. Oakland, Calif.

The NVCA attributes growth in this market to spillover from the San Jose and San Francisco areas. "The cost of living and creating a business is lower in Oakland than in San Jose and San Francisco. Things are just cheaper in the East Bay than opposed to the city or San Jose or Silicon Valley areas," says Heesen.

No. of Deals: 50
No. of Startups: 40
Sum of Equity Invested (USD millions): 398.68

Chicago, Ill. tech startups
Credit: iStockphoto
10. Chicago, Ill.

Chicago, while not typically considered a high tech hub, has been gaining a lot of traction thanks in part to businesses like Groupon and Orbitz. "Groupon has been a major player in that city. It's spurred a lot of entrepreneurial activity," says Heesen. Chicago also boasts a lower cost of living and working than many other large cities. It is home to a number of other startups like cars.com and grubhub, to name a few. BuiltinChicago.org says there is a new startup here every 48 hours.

No. of Deals: 56
No. of Startups: 53
Sum of Equity Invested (USD millions): 330.71

Philadelphia, Pa. tech startups
Credit: AbleStock
9. Philadelphia, Pa.

The City of Brotherly Love clocks in at No. 9 on our list. Philly is another city within Pennsylvania where many startups have used state programs to get their companies moving forward. It's also home to several top-notch schools like Wharton, Drexel and others making it a good place to find talent.

No. of Deals: 61
No. of Startups: 55
Sum of Equity Invested (USD millions): 140.98

Austin, Texas tech startups
Credit: iStockphoto
8. Austin, Texas

Austin has a robust and thriving startup market. According to NVCA stats, Austin has seen its share of successful startups, like RetailMeNot and NetSpend. A strong university, a vibrant young crowd and a beautiful backdrop are the driving forces behind this trending market. "It has a vibe and community that is very conducive to start-ups," says Heesen.

No. of Deals: 64
No. of Startups: 53
Sum of Equity Invested (USD millions): 475.51

Seattle, Wash. tech startups
Credit: Photodisc
7. Seattle, Wash.

Hi-Tech companies like Microsoft and others are headquartered in this region and the NVCA has seen a large number of entrepreneurs come out of some great companies based here. "There has been a maturation of that market as folks leave these venture-backed large companies and go off to create their own," says Heesen. Many of the startup companies created here are acquired by the same large companies that the founders left.

No. of Deals: 82
No. of Startups: 69
Sum of Equity Invested (USD millions): 671.43

Washington D.C. tech startups
Credit: iStockphoto
6. Washington D.C.

D.C. and the surrounding metro area are home to the federal government and this drives a lot of the trends in this busy market. The VC market is heavily connected to the government, specifically the department of homeland security and defense industry, according to the NVCA. "Many small IT companies have been sprouting up in the DC region due to the federal government presence and the strong interest in security," says Heesen.

No. of Deals: 92
No. of Startups: 79
Sum of Equity Invested (USD millions): 397.00

Los Angeles, Calif. tech startups
Credit: Digital Vision
5. Los Angeles, Calif.

Not normally known as being a hotbed for IT venture capital, one area has really begun to heat things up. You guessed it: the media and entertainment industry. Like New York City, the LA/Long Beach area has become an IT hub for media and entertainment, making it sizzle for startups that operate in these avenues.

No. of Deals: 150
No. of Startups: 121
Sum of Equity Invested (USD millions): 754.88

Boston tech startups
Credit: iStockphoto
4. Boston, Mass.

Boston, a traditional venture capital hub, is seeing a lot of growth in healthcare, which is good for HIT startups. HIT is a growing sector, since the recent Supreme Court decision on healthcare. Up to that point, many companies were waiting on the sideline to see how recent healthcare legislation would pan out. On the IT side, Boston continues to be an important player in the VC markets. With its proximity to the prestigious MIT, many of the startups located here are created by MIT graduates who wanted to stay in the New England area, according to the NVCA.

No. of Deals: 212
No. of Startups: 179
Sum of Equity Invested (USD millions): 1,335.90

New York tech startups
Credit: Hemera
3. New York, NY

Mayor Michael Bloomberg has made great strides in making NYC attractive to the media and entertainment industries. Coming in at No. 3 NYC has it all and is fast becoming a top market and IT hub for these industries. "Bloomberg has gone full-throttle to attract entrepreneurial companies to his city," says Heesen. He's rolled out the red carpet to make it amenable to entrepreneurs to live and work in the city. Being close to the major media conglomerates on Madison Avenue helps make these small agile companies successful. It's a city that's really come into its own as a result of leadership, according to Heesen.

No. of Deals: 271
No. of Startups: 238
Sum of Equity Invested (USD millions): 1,640.65

San Jose, Calif. tech startups
Credit: iStockphoto
2. San Jose, Calif.

The birthplace of countless Internet startup companies, Silicon Valley has been and continues to be a dominant force in the tech market. It has a strong and robust IT start-up community. Many big players in IT like PayPal, Facebook and Google call this area home. Between the major players in IT and the VC community, it's rife with talent, entrepreneurs, and venture capital money.

No. of Deals: 327
No. of Startups: 276
Sum of Equity Invested (USD millions): 3,251.12

San Francisco tech startups
Credit: BrandX Pictures
1. San Francisco, Calif.

Number 1 on our list is the San Francisco Bay area. A number of big-time companies grew their roots here with the help of a vibrant startup community--Pandora and Craigslist, for example. "The City of San Fran has become a lot more attractive to the IT startups due to young people wanting to live in [such] a vibrant city. These days it costs less money to create an IT business with the accompanying infrastructure so you can afford to do it in the city and not have to schlep into the valley and be a part of a bigger operation," says Heesen.

No. of Deals: 495
No. of Startups: 431
Sum of Equity Invested (USD millions): 4,243.52