Silicon Valley is home to what is commonly thought of as the first venture-backed startup, Fairchild Semiconductor. Late 1957, Arthur Rock received 20% equity in the new company, which allowed Fairchild Semiconductor to produce the first commercially available integrated circuit.

One might reason that in today's world of telecommuting and virtual markets, the physical location of one's startup would be irrelevant to VC Investors. However, despite concerted intervention from state and local governments outside Silicon Valley, venture capital investment has largely remained concentrated on California's sun-kissed shores.

According to the Brookings Institute, in 2016 the San Francisco and Silicon Valley region led the nation receiving $4,433 per capita in venture capital, leaving an average of just $206 per capita for everyone else. In case you're counting, SF and SV are beating everyone else 21-1. With this in mind, let's take a close look at the clustered nature of venture capital investment.

“Growing New Businesses with Seed and Venture Capital: State Experiences and Options.” National Governors Association, 30 Apr. 2000. Accessed 23 Jun. 2017.

Scott Andes, Jesus Leal Trujillo, and Nico Marchio. “Rise of the rest? The Bay Area still dominates venture capital. The Avenue, Brookings Institute. 28 Jan. 2016. Accessed 25 Jun. 2017.

Ryan Bhandari and Emily Liner. “America’s Got Talent—Venture Capital Needs to Find It.” Third Way, 16 Feb. 2017. Accessed 23 Jun. 2017.

Richard Florida. “A Closer Look at the Geography of Venture Capital in the U.S.CityLab—The Atlantic, The Martin Prosperity Institute. 23 Feb. 2016. Accessed 23 Jun. 2017.

Richard Florida and Karen M. King. “Spiky Venture Capital: The Geography of Venture Capital Investment by Metro and Zip Code.” The Martin Prosperity Institute, 22 Feb. 2016. Accessed 23 Jun. 2017.

Yasuyuki Motoyama and Jason Wiens. “Guidelines for Local and State Governments to Promote Entrepreneurship.Ewing Marion Kauffman Foundation, 10 Mar. 2015. Accessed 23 Jun. 2017.

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