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The founder of announced a new initiative Tuesday to support women in the technology industry by developing emerging tech hubs. Pivotal is committing $50 million toward the initiative, which will focus on three cities in the U.S. over five years–beginning with Chicago.

The Gender Equality in Tech (GET) Cities Initiative is looking to tackle underrepresentation by women in tech–a known issue in the industry that hasn’t been quick to change. GET Cities aims to “maximize the impact of local women-in-tech efforts, crowd in other funders, and foster local coordination that can accelerate the pace of change, nationally,” according to a statement from Pivotal Ventures.

Its goal is to address the issue by focusing on emerging tech hubs, AKA places that aren’t Silicon Valley or New York.

“Recently, however, there have been signs that other metropolitan cities around the country have potential to be America’s next promising hubs for tech, especially as the demand for more accessible and affordable cities continues to grow,” the statement read.

More Capital For Chicago Companies

The Windy City is already a burgeoning venture capital and tech hub. Major tech companies including Google and Salesforce have offices in Chicago, and a number of Chicago-based startups have found success. , for example, recently went public.

But while the city certainly has promise, Chicago didn’t crack the top 10 cities in the U.S. for VC funding (cities in the Bay Area, New York, Boston and Seattle made up the list, and Austin was the only non-coastal location). Chicago did, however, make the list of top 10 cities in the U.S. by count of VC deals.

Chicago-based companies pulled in about in venture capital in 2019, according to Crunchbase data.

“As a Midwest destination for many large, technology companies and home to an increasing number of VC firms supporting local startups, Chicago is ideally suited for a collaborative stakeholder effort to advance women in tech alongside existing efforts like , a civic and social organization dedicated to transforming Chicago into a tier one technology and innovation hub and promoting inclusive economic growth,” the statement read.

Pivotal Ventures looked at a number of cities and considered factors like access to capital, the local business community, and “the current and future sources of diverse talent to computing degree programs and industry.”

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Sprout, which was founded in 2010 and launched publicly the following year, has capitalized on organizations’ focus on social media and social media’s reach to build a platform to manage it all. Its software combines data, workflows and social messaging so that users can manage their social media all from one place.

The company has 23,000 customers in 100 countries, according to its S-1 filing.

Sprout’s 2018 revenue was 99 percent sourced from software subscriptions. The same percentage (99 percent) of its revenue came from software subscriptions the first nine months of 2019. The company estimates that the market opportunity for its product is $13 billion in the United States. And since about 30 percent of its revenue came from customers in other countries in 2018, Sprout believes the international opportunity is “at least as large.”

The company’s IPO comes during a somewhat quiet period for technology offerings, despite such debuts having a strong start to the year in terms of offering volume and dollars raised. Sprout is also pursuing an IPO immediately after WeWork pulled its IPO and had to secure emergency financing to avoid running out of cash. Its results will therefore have more weight than its flotation might have carried had it come in June.

Let’s explore its history and its financial results on this lovely Friday.

Prior Venture Funding

According to Crunchbase data, Sprout Social has raised roughly . The company was founded in 2010 and raised from Chicago-based VC firm in May of that year. Sprout Social is the first company Lightbank backed since its first round to go public. It won’t be the firm’s first exit via IPO, however. Lightbank also invested in (first check ) and (first check ).

Sprout Social’s last private market financing was , closed in December 2018, which valued the company at roughly $800 million, post-money. That deal was led by the Australian sovereign wealth and saw participation from (which led ) and (which led ).

The company has a dual-class share structure which grants holders of Class B founder shares ten times the voting power as holders of Class A shares, primarily assigned to investors. Co-founders and own 37.4 percent and 41.5 percent of Class B shares, respectively, concentrating the surpassing majority of voting power in their hands.1

Stockholders in a company not only have some governance control (however nominal) over the company; their fate is tied to its financial performance.

Financial Results

Sprout Social’s business combines majority subscription revenue with a sliver of services income. As such, the business is effectively a pure-SaaS play. We can, therefore, understand it.

The company has historically grown quickly, scaling from $44.8 million of revenue in 2017 to $78.8 million in 2018. That roughly 76 percent gain led to slightly smaller deficits, with the firm’s net loss slipping from $21.9 million in 2017 to $20.9 million in 2018.

More recently Sprout has continued to grow. That growth, however, has slowed. The company’s revenue in the first three quarters of 2019 amounted to $74.6 million, up from $56.5 million in the same time period of 2018. Sprout has therefore posted just 32 percent growth in 2019.

And its losses are rising, from a net loss of $17 million in the first nine months of 2018 to a $20.9 million net loss in the same time period of 2019.

A large portion of that larger loss ($5.4 million) stemmed from share-based compensation that was not present in the same period of 2018. Strip out that cost, and the company’s net loss is smaller than in the preceding year; that fact could help Sprout secure a higher valuation than it might have if its rising losses were more heavily tied to cash-based results.

There’s good news to be found as well. Sprout’s gross margins are improving. Its subscription revenue gross margin grew from 72.6 percent in the first three quarters of 2018 to 74.3 percent in the same period of this year. (Investors love high gross margins as they make revenue efficient in helping the business cover its own costs and, hopefully, generate profit.)

Sprout Social had $12.6 million in cash, slightly less than its negative free cash flow from the first three quarters of the year ($13.6 million).

SaaS Bits And Bolts

For SaaS fans, some metrics. The company’s aggregate Q3 2019-ending ARR was $109.5 million, of which $103.9 million of recurring revenue being what the company calls “Organic ARR.” The second number appears to strip out some “legacy” incomes, providing a clearer look at the company’s current operating business.

Continuing on the subscription theme, Sprout’s number of customers contributing $10,000 ARR or more grew from 1,157 at the end of Q3 2018 to 1,965 at the conclusion of Q3 2019. That’s a gain of just under 70 percent, a heartening result for its investors we presume.

Finally, this is a SaaS business so let’s explore how much Sprout’s customers raise their spend on its products each year:

Our dollar-based net retention rate for the years ended December 31, 2017 and 2018 was 108% and 106%, respectively. Our dollar-based net retention rate excluding our SMB customers for the years ended December 31, 2017 and 2018 was 118% and 115%, respectively.

What does that mean? It means that Sprout’s largest customers tend to spend a mid-teens percentage more each year that they are a customer. That makes growth for Sprout easier to achieve, and less expensive than it would be without upselling its existing client base. The SMB-inclusive numbers (the smaller set) indicate that even with its smaller accounts, Sprout still sees what we loosely call positive dollar churn.

Summing then, Sprout isn’t super unprofitable and doesn’t have titanic cash burn. Its SaaS metrics seem pretty good, but its recent growth pace feels light. Valuing the company will therefore come down to how investors weight its relatively short path to profitability against its (comparatively) slower growth rate.

Watching how Sprout prices, therefore, will be an education.

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On Tuesday, the company announced it closed , which values the company at $300 million, post-money. led the deal; , , , and media investment company participated.

According to Crunchbase data, the round brings Cameo’s total venture backing to . The company closed just seven months ago.

Cameo takes a 25 percent marketplace fee on transactions, which depending on the celebrity or influencer in question can run between $5 and $2,500, depending on how much they value their time. In other words, creators set the price, and a growing number of consumers seem excited to pony up.

TechCrunch that Cameo processed 100,000 transactions in December and will have processed “over 300,000” by the end of this month. Digital video industry publication Tubefilter that Cameo currently has 15,000 creators on the platform, up from 5,000 last November. Not bad for a company that publicly launched just over two years ago.

Cameo plans to use its new capital for marketing and international expansion. Tubefilter reports that roughly a third of Cameo’s revenue comes from abroad.

The company employs 66 people in its Chicago headquarters. Cameo opened a 20-person engineering and product development office in Los Angeles, which it aims to expand. The company’s currently lists seven openings for product and software development roles.

Cameo intends to add more features to make communicating with celebrities more interactive. And, as a way to circumvent Apple’s 30 percent marketplace fee on in-app purchases, a yet-to-be released revamp of Cameo’s iOS app will feature “a digital currency model,” according to Tubefilter’s interview with CEO .

For a cool $150, you can get comedian —perhaps best known for his voice acting work, and his rendition of “the aristocrats” joke (exceedingly NSFW)—to wish your friend a happy birthday. Actor and musician will hype your brand for $350. For $999, Shark Tank star and Canadian politician will talk about just about anything. “Mr. Wonderful” has over 100 reviews from folks who bought his time.

Call it the end-stage of the “attention economy” all you want, but do the math: folks with influence can make some serious money by talking into their phones as a side hustle. What a time to be alive.

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At this point, no capital has yet been raised for the new fund, and the capital target is subject to change.

According to Crunchbase data, verified where possible with media reports and prior SEC filings, Fund X would be ARCH’s largest fund to date.

If fully-raised, Fund X would bring to $2.86 billion. This doesn’t include any special purpose vehicles, sidecar funds, or other pools of capital raised by ARCH separate from its flagship funds.

Initially founded in 1986, what would eventually become ARCH Venture Partners began as an initiative by the to protect and commercialize intellectual property developed at UChicago and its partnered national labs like .

However, rather than simply patenting and licensing IP (still the common practice in most university technology transfer offices) the Argonne-Chicago (ARCH) Development Corporation—initially conceived as a non-profit organization owned wholly by UChicago—was tasked with spinning up companies based on these scientific innovations.

, the founding general partner at ARCH, recruited a ragtag bunch of graduate students from UChicago’s business school. , , and, later, joined Lazarus and would come to be known as the 57th Street Irregulars (after the business school’s location on 57th Street in Chicago’s Hyde Park neighborhood).1

ARCH Associates raised its first fund in 1988 with $4 million from State Farm and another $5 million from the University and its trustees. In 1992, Lazarus, Nelson, Crandell, and Bybee spun out their venture-building and investment group under a new name: ARCH Venture Partners. And, no longer irregulars, the core team mentioned above became the first general partners at ARCH.

Since then, ARCH has raised progressively larger funds. The firm takes a multi-stage approach to its investment strategy, though it remains an early-stage investor at its foundation. In part, its larger fund sizes enable the firm to invest early and maintain their stakes throughout the venture lifecycle.

So far in 2018, ARCH Venture Partners has enjoyed a number of from its portfolio. These deals include:

• , which raised $85 million in its May IPO. ARCH Venture Partners co-led the company’s announced in August 2017.
• , a drug development company based in China, went public in September after raising more than across four prior rounds. ARCH Venture Partners invested in , which was announced in September 2011.
• , a gene editing and gene therapy company, raised $144 million in an initial public offering in March. ARCH participated in both rounds, and , raised by the company.
• went public in May and raised $75 million in the offering. ARCH Venture Partners led and followed on through two subsequent rounds prior to IPO.
• helps diagnose complex diseases using non-invasive blood tests. The company was for an undisclosed sum in July. ARCH Venture Partners participated in .

Other big life sciences positions include , which is expected to go public this week, unless competing firm sway the SEC. There’s also cancer diagnostics company , which has raised a whopping $1.6 billion in venture funding to date. ARCH Venture Partners invested in Grail’s and led , which was huge even by life sciences standards.

Although the firm is primarily focused on life sciences these days, ARCH does have offices throughout the U.S. (plus one in Dublin, Ireland), and partners with many research groups outside UChicago, ARCH remains true to its Chicago roots.

In June, the firm that co-founding general partner Steven Lazarus had died at the age of 87. Keith Crandell, one of the original 57th Street Irregulars, succeeded him as managing director of the firm.

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It’s just a few days into the final quarter of 2018, and Chicago’s late-stage startups are on a fundraising tear.

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On Thursday, Chicago-based company announced it has raised .

The deal was led by new , represented by general partner . Prior investors (which led the company’s Series B round), (which led its Series A), and all participated in the round, according to Crunchbase data and .

Terms of the deal were not disclosed by G2 Crowd. This round brings G2 Crowd’s total funding to raised to date.

Three Deals Kick Off The Fourth Quarter

In just the past week or so, two other Chicago companies raised big late-stage rounds of their own:

• Logistics technology company (which the company stylizes with a lowercase “p”) raised $45 million in a Series C covered by Crunchbase News.
• , a medical cannabis grower and extracts manufacturer, in a supergiant Series D round as the company expands outside the Illinois market.

With over $200 million raised in three late-stage funding (which Crunchbase defines as Series C, Series D, and later rounds) announced so far, the Chicago startup market starts Q4 off on strong footing.

This Year In Late-Stage Funding (So Far)

Pulling back to look at 2018 as a whole, Chicago startups have already raised more money in late-stage rounds than any year since 2011. The only reason Chicago’s late-stage funding totals were so large that year was that daily deal site closed .

Moreover, late-stage deal volume in the Windy City is on track to eclipse 2017’s record highs. With the remainder of Q4 to go, it’s likely there will be at least two more Series C, Series D, or later rounds.

Growth in late-stage deal volume points to a maturation in the city’s startup market. And in many ways, it’s this deal volume bump that matters most. Especially at later stages, the amount of money a company raises begins to vary quite a bit. There are bound to be outliers, but the unusually small rounds don’t make a material impact on dollar volume totals. Big rounds, like Groupon’s Series D, do.

Obviously, a lot can happen in the remaining weeks of 2018, and there’s no telling what 2019 will bring. But by most measures, it’s been a banner year for late-stage venture in general, but particularly for the City by the Lake.

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The argument in favor of investing locally is simple. Face-to-face meetings are much easier to facilitate when everyone’s within a short car ride or public transit trip from one another. Even in a time where video chatting is near-ubiquitous, there’s still something to be said for convening in person. Again, it makes sense.

“So what,” you might be asking yourself. Isn’t it obvious that investors would rather invest close to home, when possible? Sure, but as is typically the case with most plainly obvious things, when one takes a slightly closer look, nuance and variation abound.

So let’s delve a bit deeper, shall we? Using data from Crunchbase, we’ve built and analyzed a dataset of nearly 36,700 venture capital deals struck by almost 21,000 investors with nearly 22,000 different US-based startups between Q1 2012 and November 1, 2017. And it’s the goal of this article to use those findings to back up and, where necessary, bust the beliefs and biases about which investors have the most loyalty to their locales.

Most Investment Is Local, But Slightly Less So Over Time

Let’s start with the basics. In the almost six years since the beginning of Q1 2012, an average of roughly 57 percent of all the financial relationships we analyzed were between companies and investors from the same state. Overall, roughly 50 percent of those ties were between investors and startups from the same metropolitan region.

However, it’s important to mention that this is the average over all deals, all kinds of investors, and all stages of company development. There is plenty of deviation from these means to keep things interesting.

Staying somewhat abstract, it’s also interesting to note that, over time, startup investors are seemingly more willing to venture outside the familiar confines of their home states and metro areas to make their investments. The chart below shows a slow, yet steady decline in the number of times when investors and their portfolio companies shared a home base.

Now that we’ve restated the obvious – this time with data! – let’s go one step further. Are different types of investors more or less likely to seek out deals close to home?

Of course, every investor will tell you that, like snowflakes, they are unique, not just in their approach to investing, their perspective, or – their favorite topic – the value they add. But just like there’s a difference between flurries and blizzards, so too are there categories of investor.

Certain Investors Are More Anchored Than Others

Handily, much of Crunchbase’s investor data is tagged by type, and below we’ve displayed the nationwide averages of in-state vs. out-of-state investment activity for several of the most common types of venture investor.

Here too, there aren’t many surprises. Government offices and similar state-backed entrepreneurship initiatives tend to invest close to the constituents they ostensibly serve, and most individual angel investors tend to invest within their own states as well. Considering that many accelerator programs have a distinct geographic focus – for example, the various TechStars outposts in cities ranging from San Francisco and New York to comparatively smaller hubs in Kansas City – it’s not surprising to see that a majority of the deals accelerators source come from the same state in which they’re based.

With venture funds of all amounts of assets under management, many use their geography as a point of differentiation, especially if they’re located outside of Silicon Valley, so a slight bias toward investing in companies from the same state is expected.

However, moving up the financial stack a bit, we can see that, in general, opportunism begins to outweigh any particular affinity to a particular locale. Family investment offices – private wealth management firms that typically invest on behalf of a single (ultra-)high-net-worth family – and, more notably, corporate venture capital funds seem to be the most location-agnostic of the investor types we’ve surveyed here.

This predisposition for more earlier-stage investors to invest closer to home is again echoed in the data. Here, using the same classification rules Crunchbase News has used in its quarterly reports (which can also be found at the end of this article), we’ve sorted the venture rounds into their various stages. Also where data was available, we delineated between lead investors on a round and those that have merely participated. Here, we display these investors’ tendency to invest in companies from their home state.

In general, it appears that being closer to portfolio companies is particularly important for angels and seed funds, which are typically the first formal source of outside funds for a company. But this becomes less important as companies mature.

Interestingly, seed and angel-stage companies are more likely to take on a lead investor who’s in the same metro region, but as they proceed through the funding cycle, they’re more inclined to find lead investors outside of their metro regions. So, for a first round, a company’s legitimacy in the market gets a boost when a well-respected local investor leads the round. But, at Series A and beyond, there may be benefits to having a non-local investor lead the round, particularly if a company is located outside a major tech hub. This latter point could go some way to explaining why lead investors often come from out of state in subsequent rounds.

Location, Location, Location!

So if different types of investors are more likely to park their money closer to home, and investors at different stages exhibit similar kinds of variability, does an investor’s location affect their likelihood of investing closer to home? This is likely the most contentious question we’re tackling here, and the answers may be surprising because they both contradict and bolster certain regional stereotypes.

Below, we present a chart that divides US venture investment by regions . We show the proportion of investor-company relationships that are intra-regional (i.e. both parties come from the same region) and the outside regions where investors are most likely to invest. In doing so, we’re able to show both the degree to which investors from a particular region are inward-focused, and where they’re most likely to invest when they want their money to travel a bit.

For such a historically pioneering region, venture investors in the West are fairly cloistered when it comes to making deals. This is in no small part due to investors in the San Francisco Bay Area live in the region’s – indeed, the nation’s – surpassingly dominant single market for venture investing activity.

In the Bay Area, out of almost 36,000 company-investor ties captured in our dataset, almost exactly two thirds (66.2 percent, for those of you dying to know) of those were between Bay Area companies and Bay Area investors. And for those brave, pioneering investors who want to venture back east for their deals, well, they basically overlook companies based in the South and Midwest, with only rare exceptions.

Which brings us to the Northeast. All of those stereotypes about “coastal elites,” at least as far as venture investing is concerned, are borne out by the data here. Although East coast investors are much more likely to invest outside of their region than their West coast counterparts, it’s only because a relatively large chunk of their out-of-region investments are on the Pacific coast.

It’s the investors in the middle and southern parts of the country that seem to have the most geographically diverse portfolios, at least when it comes to those investments outside the region.

To take just one example, investors from Chicago, the largest market for venture investment from both the South and Midwest, are far below the national average when it comes to investing inside their own metro areas. For the nation as a whole, fifty percent of investor-company relationships are within the same metro area. However, in the case of Chicago investors in particular, just over 37 percent of those relationships are between investors and companies both located in the greater Chicago metro area. At least from this perspective, it seems like Chicago investors’ reputation for being insular is somewhat unearned.

Perhaps with the exception of Chicago, America’s South and Midwest (again, as defined by the Census Bureau) generally lacks a deep well of startup investment opportunities. It makes sense that the average investor from that part of the country will seek out potential investments a little further afield. As we saw in the chart above, that often means going East or West.

Most Investment Will Stay Local For A Long Time To Come

As a general rule of thumb, it’s safe to say that venture investment tends to be a local affair. But as we’ve seen here, there aren’t really hard-and-fast rules, just patterns and probabilities. If you’re a founder based in the Bay Area and you’re raising a Seed round, chances are good that the lead investor will also be based in the Bay Area. If you’re an angel investor in Boston, you’re likely to invest in startups based in Boston or thereabouts. There are, of course, plenty of exceptions, so data isn’t destiny here.

It will be interesting to see how all of this changes over time, though. As we mentioned in the beginning, communicating across wide distances is a richer experience now than ever before. It’s not like board meetings will be conducted through Snap Stories, but it wouldn’t be surprising to see investors venture away from home more often. Despite this, there’s something to be said for investors paying closest attention to their home turf. No amount of research or interviews, done from afar, will replace the “ground truth” learned from being somewhere in person, at least not yet.

Glossary of Funding Terms

• Seed/angel include financings that are classified as a seed or angel, including accelerator fundings and equity crowdfunding below $5 million.
• Early-stage venture include financings that are classified as a Series A or B, venture rounds without a designated series that are below $15M, and equity crowdfunding above $5 million.
• Late-stage venture include financings that are classified as a Series C+ and venture rounds greater than $15M.
• Technology Growth include private equity investments with participation from venture investors.

The American Midwest, to some, is just the “flyover states.” Its tropes – rusted-out factories, cornfields, and calorically-dense fried foods at state fairs – are well known.

However, it’s also increasingly home to more technology startups.

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Looking through the lens of startup and venture capital funding activity, we’ll be looking out how the midwest and its metros stack up against one another. This is an extension of Crunchbase News’s growing coverage of startup ecosystems outside Silicon Valley, New York City, and Boston.

What We Talk About When We Talk About The Midwest

What, exactly, constitutes the Midwest? A by FiveThirtyEight had 10% of respondents say that places like Wyoming and Pennsylvania are Midwestern states. That’s a stretch. At Crunchbase News, our definition of the Midwest will be based on the .

Twelve states – Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin – make up the official group of Midwestern states.

Since there is no one “right” way to go about ranking the metropolitan regions in each of these states, we have opted to do a lot of rankings instead! We’ll be sure to keep track of which cities perform the best in each of these rankings, which will produce an all-around ranking for the best of the Midwest.

Before we continue, it’s recommend that you don’t fly over the rest of this post.

Metros Ranked By Number Of Startups Founded Since 2015

In the Midwest, here are the key measures of startup and venture capital activity Crunchbase News is going to rank:

• The number of startups founded in each metro over the past two and a half years.
• The number and total dollar volume of venture capital rounds raised by companies based in those areas.
• The number of startup investors based in each city.

The number of companies founded in a particular geographic area is a good proxy for the amount of entrepreneurial activity happening. And, when these figures are gathered for a number of areas, we can compare the absolute level of new startup activity.

In Crunchbase’s data, we were able to find exactly 1,000 startups founded in Midwestern states with “founding dates” between January 2015 and the end of July 2017. Aggregated around metropolitan regions, here’s how they all compare.

Of course, there’s the possibility that these numbers are slightly skewed. Not every company in Crunchbase’s dataset has a founding date listed, so it’s likely that there are more companies that have been started than what’s listed here. However, although the exact numbers might be a bit off, there are notable trends when marked proportionally.

Over five times as many companies were founded in Chicago than in Minneapolis. Interestingly, the Detroit metro area saw roughly the same number of startups starting up as Minneapolis, despite having a population that’s 30% smaller and comparatively less well-off than the area around Minneapolis and Saint Paul, MN. to the MSP Regional Economic Development partnership, the greater Minneapolis-St. Paul metro area is home to seventeen Fortune 500 companies, which is “more per capita than any other metro region.” The abundance of good jobs in Minneapolis may explain why startup founding activity, on a per-capita basis, is lower.

A “third tier” of cities like Cincinnati, St. Louis, and Indianapolis seem to chug along quite nicely. But still, those metro areas pale in comparison to market-leading Chicago.

Metros Ranked By Investment Round Counts

The number of investment rounds in local startups is another important measurement of vibrancy in a startup ecosystem.

We analyzed just under 2,400 venture capital deals struck with companies based in the Midwest between the beginning of January 2015 and the end of July 2017. This gives us a relatively broad measure of startup ecosystems in the broader region.

Again, Chicago leads the pack, a trend we’ll see throughout other rankings as well. That being said, the relative difference in venture funding activity is less dramatic than our ranking of startup founding activity. Since 2015, Chicago only had a little over three times as many venture rounds as Minneapolis.

Metros Ranked By Funding

Although the number of VC deals point to a more “absolute” yardstick of investor interest in a metropolitan region, the dollar volume represented by those deals often draws a starker comparison between ecosystems.

Of the 2,400 deals we analyzed from above, roughly 1,840 of them had dollar amounts associated with the round. Here’s how the metros compare.

Please note that there were around 560 rounds for which we didn’t know much money was invested. Again, like with our measure of startup founding activity, this means that the actual dollar volume invested into these markets is greater than what’s listed here. However, like with previous measurements, there’s strong reason to believe that the relative rankings are sound.

Metros Ranked by Number of Venture Investors

It goes without saying that investors are a necessary ingredient in healthy startup ecosystems. And there are many kinds of investors, broadly defined in two categories: institutional and individual investors.

Here, we’re focusing only on institutional investors of a few types, specifically venture capitalists (so-called “micro VCs” and “regular VCs” alike), accelerators, incubators, seed funds, and angel investor networks.

Here’s the ranking of metropolitan regions in the US ranked by the number of institutional investors.

Again, mostly by dint of being a major financial center, as well as being the region’s biggest city, the Chicago metro area is home to the most institutional investors in the Midwest. Although Minneapolis places third in the rankings here, it’s also home to a vibrant scene of and life sciences companies, which are capital-intensive to start up and run. This could explain Minneapolis’s strong performance relative to Detroit and other metros in the ranking of total VC dollar volume.

Finding The Best in the Midwest

We’ve taken a look at the number of different metrics, each time comparing the relative performance of over 50 metropolitan regions in the Midwest. But now it’s time to bring it all  together to see which metro regions are the “Best of the Midwest” for entrepreneurs and investors alike.

In the chart below, we’ve ranked each metro region by its average ranking over the four metrics we examined. (The lower the number, the better the city did.)

Again, it’s no surprise that Chicago ranks at the top of this list. Some might say it’s unfair that such a big city is placed at the top of this list, but it makes sense that Chicago ranks as #1. In startups and venture capital, networks are everything, and cities with bigger, more variegated populations typically have the richest networks.

There are, no doubt, plenty of opportunities for entrepreneurs and startup investors in smaller Midwestern cities to find a path to success. So if you’re from Omaha, Kansas City, or other cities on this list, take heart. And if you do find yourself in need of a “bigger pond,” Chicago’s just a few hours’ drive through the heartland away.

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