The Mobility of Startup Founders

The following post was written by Kate Maxwell, my co-author in the report discussed below.

The Kauffman Foundation has just released the first examinations of Inc. 500 companies over the 30 years Inc. has been compiling the list. Some of the results were surprising, not least of which was the dominance of the South over other regions in founder preference. Not typically considered to have great entrepreneurial ecosystems, the South as a region outperformed the others in nearly every category included founders educated, retained, most companies founded there, and highest net flow of founders.

This is a particularly interesting result given that, compared to the Northeast, the South is not widely regarded for premier universities. Yet, an equal number of founders in this data went to universities in the South and in the Northeast. Furthermore, the South retained and attracted more businesses than any other region did. The Midwest, Northeast, and West all lost more founders to the South than to the other two regions combined. Clearly, there is a driving trend to locate businesses there and to remain there after education. There is a general trend for people to move toward the South and West. Edward Glaeser’s book on cities notes a correlation between population growth and January temperature—higher is better. Joel Kotkin holds up sprawling cities (often seen in the South), such as Houston, as great for quality of life. The driving forces behind such dynamics still are unclear and beyond the scope of this survey, but the trend is nonetheless clear and interesting.

Below we can see the movements of founders who started their companies in the five Southern cities with the most Inc. 500 companies in our data. 267 companies were founded—the top five cities in the Northeast, West and Midwest boast only 199, 220 and 106 companies respectively.

See full paper here.

Top image:Gangplank HQ/Flickr/CC