Lots has been made in regards to the cultural, geographic, and demographic variations of Pink and Blue states.
One other stat so as to add to the pile is that this: So-called Blue or Democrat-leaning states take within the overwhelming majority of enterprise capital funding. Amongst Pink, or Republican-leaning states, the one two that stand out as main startup funding hubs are Texas and Utah.
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These are the findings from an summary of venture-stage funding based mostly on Crunchbase information for the previous 12 months. 1
Total, states within the Blue column for the 2020 election (plus Washington DC) pulled in $70.1 billion over the previous 12 months for the funding levels we tracked. Pink states, in the meantime, drew simply $5.68 billion.
(We didn’t embrace totals in both column for 3 states which have but to substantiate presidential election outcomes when making these calculations: Pennsylvania, Georgia and Nevada. Nevertheless, none of these states will transfer the needle on the broad discovering, which is that startup funding exercise prevails in Democratic strongholds.)
It’s staggering to think about that “Blue States” rake in roughly 12 occasions the enterprise capital of Pink States. If we glance nearer, nevertheless, the Democrat-leaning benefit is much more pronounced.
That’s as a result of amongst Republican-leaning states that do obtain enterprise capital, the overwhelming majority goes to Democrat-leaning metropolitan areas.
Take Texas. Voters there have constantly favored Republican presidential candidates for 4 a long time. However Austin, the metro space that generally brings in a majority of the state’s enterprise funding, is thought for its liberal-leaning politics.
North Carolina, a little bit of a swing state that tilted purple in 2020, reveals an identical sample. The hub for startup and enterprise capital exercise is the Analysis Triangle area, which leans left.
Utah is extra blended. Provo and Utah counties, each wealthy in funded startups and tech expertise, are each right-leaning. The Salt Lake Metropolis metro space, in the meantime, leans barely left.
We’ve damaged down the state-by-state totals under, divided alphabetically into Pink, Blue, yet-to-be-determined for the 2020 presidential election:
What To Make Of It?
A lot of the divide over which areas get enterprise funding is an city vs. rural matter. Startup funding tends to stream to areas with the next traits: Main analysis universities, a extremely educated inhabitants, native enterprise traders, and an present expertise pool in tech and different industries favored by startups. Few rural areas, which are typically Republican-leaning, match that description.
That stated, we do see startups thrive in deep-Pink states and in areas with out a lot native VC presence. Alabama-based grocery supply startup Shipt, as an example, raised over $65 million in enterprise funding earlier than promoting to Goal for $550 million just a few years in the past.
Indoor farm operator AppHarvest of Morehead, Kentucky has raised greater than $135 million in enterprise funding since final 12 months and recently announced plans to go public. The corporate operates large-scale indoor farms within the Central Appalachian area, with its first produce, tomatoes, to be harvested early subsequent 12 months.
Maybe as more venture funding flows to areas such as agtech — the place extra of the information base is outdoors main metro areas — rural areas and smaller cities will see beneficial properties. In spite of everything, nobody would decide Silicon Valley as essentially the most cost-effective location for a large tomato farm.
Personally, I’d wish to see extra enterprise capital going to those areas that haven’t traditionally been magnets for funding. Regardless that most newly minted startups gained’t make it, those who do could be a main engine of job creation and financial progress for his or her native communities. It’d be good to see extra of these beneficial properties going to locations that aren’t already awash in tech wealth.
Illustration: Dom Guzman