A recent BostInno article, examines a Kauffman report that analyzes high growth startups (“gazelles”) that have a disproportionate impact on economic growth and job creation. The report, written by Paul Kedrosky, a Kauffman fellow and an investor, originally set out to measure the firms that were able to reach $100 million in revenue in a matter of years, concludes that only 200 startups per year end up making such an impact – and, perhaps surprisingly, most of them are not in tech.
Of the time range examined, 1980-2012, it seems that the mid-to-late 90s and the early 00s were most prolific for these companies to appear. The recession of 2008 and beyond marks a drastic decline in high-growth start-up activity.
The report goes further to highlight that the US region with the greatest number of such companies is the Southeast.
Most of the data here isn’t surprising to Chrysalis, as we’ve been investing in these regions, between the coasts, for nearly two decades. One of the most significant trends we are seeing is the ability for entrepreneurs, now more than ever, to build their companies anywhere. Advances in technology and distribution channels diminishes the necessity for customers to be outside your door. While we don’t discount the benefits of building a company on the coasts, we clearly see the increased benefits Middle America allows when starting and scaling your business.