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Jason Rowley<\/span> Contributor<\/span><\/p>\n<\/p><\/div>\n Jason Rowley is a venture capital and technology reporter for Crunchbase News<\/a>.<\/p>\n Today, we are finding out how much money a startup needs to raise to be counted among the best-capitalized new companies in its home state.<\/p>\n Why bother with this? Because for states not on the coasts, the exercise gives local entrepreneurs and outside observers a benchmark for evaluating where a company sits on a state\u2019s spectrum of startup companies.<\/p>\n We\u2019ll start at the national level before we dive into individual states and their nuances.<\/p>\n To answer our question, we aggregated pre-IPO venture capital and venture debt deal data from around 24,600 companies that meet the following criteria:<\/p>\n We\u2019re going to find out what it takes for a company to be at or above certain positions on the startup funding curve. So how much money does a startup need to raise to be in the upper half of U.S. startups\u00a0in terms of the amount of money raised? To show this, we made a chart plotting the total amount of money raised that corresponds to different percentiles, from zero through one hundred.<\/p>\n And here\u2019s a table that shows the corresponding amounts of total startup funding for key points of interest on the graph above.<\/p>\n For all the companies we analyzed, the amount of total private funding each has received really runs the gamut. The midpoint of the curve, the median value, might be surprising. For your startup to be on the upper half of the funding curve, nationwide, you must raise at least $1.75 million from investors. Although that number may appear\u00a0small to many, it shows just how few companies are able to raise any significant amount of capital.<\/p>\n From there, numbers go \u201cup and to the right\u201d fairly quickly. To join the vaunted \u201cone percent\u201d of startups, as ranked by the total amount of money raised, a company needs to have received roughly $163 million in pre-IPO equity and debt financing. And unless you\u2019re Uber, well, there\u2019s no way you\u2019re in the 100th percentile.<\/p>\n<\/div>\n The curve above may illustrate the national rankings, but what about on a state-by-state level?<\/p>\n It\u2019s probably unfair to stack companies based in states with comparatively smaller tech startup ecosystems against, say, New York or California. Well, founders from Wyoming, North Dakota, Alaska and Iowa, you\u2019re in luck. We crunched the numbers for all 50 states in the union, plus the District of Columbia.<\/p>\n In the map below (interactive version here)<\/a>, you\u2019ll be able to see the cut-off point for joining the top 50 percent of companies in your state, ranked by total funds raised to date.<\/p>\n It won\u2019t be a shock that certain states have higher median (which is a fancy way of saying the 50th percentile) funding amounts\u00a0than others. States like California, Texas, New York, Massachusetts and others with relatively high levels of startup activity are more likely to have higher median funding values than those with less startup activity.<\/p>\n That should strike most as fairly obvious, but what\u2019s interesting about this map is that, ultimately, there\u2019s a relatively narrow range of funding levels that land companies in the top half of startups in their states.<\/p>\n Notwithstanding outliers like Hawaii, where the median funding amount is $75,000 in our data set, raising between $500,000 and $2 million is enough to join the top half of companies in many states. During a time where multi-million-dollar seed rounds happen with surprising regularity on the coasts, one might be surprised to learn that raising just $1 million is enough to rank in the top half of companies in 28 states.<\/p>\n In other words, there\u2019s a fairly low barrier to entering the top half of startups \u2014 especially outside of the coasts.<\/p>\n But what about the top 1 percent of startups in each state? Here we have another map (interactive version here<\/a>):<\/p>\n We see higher numbers (and darker colors) in states with relatively high levels of startup activity. But one of the other data points\u00a0this map highlights is the geographic distribution of well-capitalized companies. California and New York are both home to a lot of companies with lots of funding behind them, which results in fairly high total fundraising figures for the 99th percentile of companies.<\/p>\n However, there are still companies with high values at the 99th percentile threshold despite having comparatively less startup activity. That\u2019s because these states are home to at least one company that\u2019s received a large amount of private investment.<\/p>\n For example, Utah and Arizona\u2019s 99th percentile figures are comparable to California\u2019s. Although Utah has its own startup scene in the Salt Lake City and Provo metropolitan regions, it\u2019s because three unicorns \u2014\u00a0Domo<\/a> (with $689 million in equity financing), InsideSales.com<\/a> (with $251 million in financing) and Pluralsight<\/a> ($192.5 million in financing) \u2014 are headquartered in the state.<\/p>\n Arizona is the home of Carvana<\/a>, which received $300 million in equity financing before going public in April, as well as other well-funded companies like OfferPad<\/a> and Katerra. Katerra joined the billion-dollar valuation club last month with a $130 million Series C round<\/a> that valued the company at $1 billion. It\u2019s interesting to see just how much influence one or two well-capitalized startups can do to the numbers at the extreme end of the funding spectrum.<\/p>\n Joining the exclusive club of one-percenters is hard, and, by definition, nearly every company fails to gain entry. But that\u2019s alright.<\/p>\n For founders and investors alike, the heartening thing to take away is that, in most cases, even a small seed and Series A round puts your company in the top half of startups founded in or after 2003. And if there\u2019s one good thing about being middle of the pack, it\u2019s that you have plenty of company.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"More posts by this contributor:\n<\/div>\n<\/div>\nCrunching the national numbers<\/h2>\n
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![\"\"](\"https:\/\/tctechcrunch2011.files.wordpress.com\/2017\/05\/percentile-curve-1024x736.png?w=680&h=489\")
<\/p>\n![\"\"](\"https:\/\/tctechcrunch2011.files.wordpress.com\/2017\/05\/percentile-table-1024x482.png?w=680&h=320\")
<\/p>\n\nState by state<\/h2>\n
![\"\"](\"https:\/\/tctechcrunch2011.files.wordpress.com\/2017\/05\/median-50th-percentile.png?w=680&h=392\")
<\/p>\nThe rich kids\u2019 table<\/h2>\n
![\"\"](\"https:\/\/tctechcrunch2011.files.wordpress.com\/2017\/05\/99th-percentile.png?w=680&h=392\")
<\/p>\n\nStanding out from the crowd<\/h2>\n
![\"\"](\"https:\/\/tctechcrunch2011.files.wordpress.com\/2017\/05\/1percentclub2.png?w=680\")
Joining the exclusive club of one-percenters is hard, and, by definition, nearly every company fails to gain entry. For founders and investors alike, the heartening thing is that, in most cases, even a small seed and Series A round puts your company in the top half of startups founded in or after 2003. And there’s one good thing about being middle of the pack — you have plenty… Read More<\/a><\/p>\n\n<\/img><\/a>
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