Venture capital has long been the kind of finance that powers new and innovative startup companies. For most of its modern history, venture capital investment has flowed to startups located in suburban office parks. Using new and more detailed data at the zip code-level, our research finds a considerable shift in venture capital investment and startup activity toward urban areas.
Previous research on venture capital investment and startup activity has been hampered by a lack of data at the neighborhood level. Our research uses more granular data from Thomson Reuters to identify venture capital investments that flow to urban versus suburban neighborhoods based on zip codes. We further explore the location of venture capital investment and startup activity by the way people commute to work — looking at the share of workers who walk, bike, or use transit versus those who drive their own cars to work.