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No—you do not have to move to Silicon Valley or another famous startup hub to start a business. But where you live can shape how easily you meet customers, find specialized talent, build a network, and reach investors. The practical question is whether your location gives your particular company reliable access to the resources it needs, locally or through travel and distributed relationships.
What does “starting a startup” mean?
Location’s effect depends partly on which stage you mean. A business application is evidence that someone is pursuing an idea; becoming an employer firm is a later step involving hiring. Those are different measures, and places can perform differently at each one.
A U.S. Census Bureau working paper describes high-startup locations as having high application intensity, while lower-startup locations show lower rates of transition from applications to employer firms. That distinction helps explain why a place can have many people trying to start businesses without an equally high rate of firms becoming employers. It does not show that every lower-startup location is unable to produce a successful company. The Census Bureau’s July 2023 paper focuses on these two stages, not on a universal hub-versus-non-hub success rate.
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A dense startup ecosystem can make some resources easier to encounter: potential co-founders and employees, investors, mentors, customers, and people with experience in a particular industry. Local universities, established companies, suppliers, and professional networks may also provide useful knowledge or connections. These are possible advantages of proximity, not a guarantee of funding or growth.
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Local industry and talent have been associated with new-firm formation. A 2003 U.S. Census working paper found startup rates were positively related to the share of adults with college degrees and to the concentration of establishments in the same industry and area sector. Because that study is older, it is best read as evidence for plausible mechanisms—not as a current ranking of the best places to found a company. Read the Census working paper on city startup rates.
Does living outside a hub hurt your chance of raising money?
Geography can affect access to investors, but the available evidence does not establish that founders outside major hubs have equal fundraising access—or that they must relocate to raise capital. A study using U.S. county data from 1986 through 2019 reports that venture-capital inflows were associated with wider local effects on employment, payroll, and venture creation beyond the companies that received funding. Its reported estimate includes at least one venture, 41 jobs, and $7 million in payroll per $1 million invested. Those are study estimates for the analyzed data, not a forecast for an individual startup or a promise that capital will reach every location. The 2026 Journal of Business Venturing article examines broader local effects of VC inflows; it does not settle an individual founder’s odds of fundraising.
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Funding geography also differs by country. An August 2026 National Bureau of Economic Research working paper reports that African startup activity is concentrated in a few hubs and that about 80 percent of VC funding in the paper’s African context involves a foreign investor. That is not a global statistic and should not be applied to U.S. founders. It illustrates why advice about startup geography needs to account for the country and financing ecosystem. Read the NBER working paper, “Startups in Africa”.
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Some do, but moving is not the norm for every startup. A study of high-potential startups found that 6.6% crossed U.S. state borders during their first five years. Among those movers, startups that moved soon after founding tended to choose traditional hubs, while later movers tended to choose lower-tax cities. The result describes a specific group of high-potential startups; it is not an estimate for all new businesses, and it does not prove that relocating caused success. The study, “Entrepreneurial Migration,” was published online in 2023 and appears in volume 108, issue 2 (2026).
How to decide whether you should relocate
Compare your current location with the specific needs of your business rather than with a generic list of startup cities. A move is worth considering when it closes a concrete access gap that you cannot reliably address otherwise.
Customers and industry knowledge
Ask whether your first customers, suppliers, regulators, or industry partners are concentrated somewhere else. For a business whose product depends on frequent in-person work or local relationships, proximity may matter more than for a company that can sell and support customers remotely.
Co-founders, employees, and expertise
Identify the roles and skills you need, then assess whether you can recruit them where you are, hire remotely, or bring people together through periodic visits. A nearby university, employer, or supplier may offer relevant talent and knowledge even if the city is not branded as a startup hub.
Investors and networks
Find out whether the investors relevant to your business expect in-person contact, whether they invest outside their home region, and how often you would need to travel. Consider whether mentors and founder networks can be reached through regular visits or distributed relationships. Do not assume online access removes every geographic barrier.
Cost, taxes, and quality of execution
Compare the costs and tax environment of plausible locations against the value of being closer to customers, talent, and capital. A lower-cost location is not automatically better if it makes essential hiring or customer access difficult; a famous hub is not automatically better if its additional access does not help your company execute.
A practical relocation test
- List the resources the business must secure in the next 12–18 months. Separate essential needs—such as customer access, a specialist hire, or a regulated-industry relationship—from useful but nonessential networking.
- Mark where each resource is available. Note whether it exists locally, can be reached remotely, or requires recurring in-person access.
- Estimate the real cost of the gap. Include travel, hiring difficulty, slower sales, missed expertise, and the cost of moving; do not treat “being near a startup scene” as a measurable benefit by itself.
- Test access before making a permanent move. Arrange targeted visits, customer meetings, recruiting conversations, or investor discussions and assess whether physical proximity changes the outcome.
- Move only for a specific advantage that outweighs the disruption. Reassess as the company’s customers, hiring needs, and funding model change.
When staying put is a sound choice
Staying outside a major hub can be sensible when your customers are local or reachable remotely, the talent you need is available or can be hired at a distance, and you can access industry expertise and financing relationships without constant proximity. It can also make sense when moving would consume time and money without resolving a specific business constraint.
There is no established general causal estimate showing that founders who live in major hubs have higher startup survival or success rates than otherwise comparable founders outside them. The evidence points instead to different local conditions and different stages of business formation. Decide based on your company’s resource needs, not on the assumption that a particular address is a prerequisite.
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