No: you do not have to move to Silicon Valley—or any other famous startup hub—to start a business. But where you live can change how easily you reach customers, specialized talent, co-founders, mentors and investors. The practical question is whether your venture can reliably access the resources it needs where you are, through travel, or through distributed relationships.
Starting a business is not the same as scaling a venture-backed company
It helps to separate business formation into stages. A business application signals that someone is pursuing an idea; becoming an employer firm is a later step that involves hiring. Census Bureau researchers find that local conditions relate differently to those two stages. In their July 2023 working paper, high-startup locations are characterized by more applications, while low-startup locations show lower transition rates into employer firms. That distinction explains why an area can generate interest in starting businesses without producing the same rate of employer-firm formation. It does not show that founders in less active locations cannot build successful companies.
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Location can matter more as a company moves from testing an idea to hiring, raising outside capital or serving customers who expect in-person access. A founder building a small, profitable business may need a different local network from one pursuing rapid, venture-backed growth.
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Proximity is useful when it reduces friction in getting essential work done. A dense local network may make it easier to meet potential co-founders, recruit people with relevant experience, find mentors who understand an industry, or have repeated conversations with investors. Nearby customers, universities, employers and suppliers can also provide industry knowledge and early opportunities.
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These are practical advantages, not proof that every founder benefits equally from living in a hub. The value depends on the venture: a business serving local customers may benefit from being near them, while a software company selling remotely may not need the same day-to-day access. A hub can also mean higher costs or a less favorable tax environment for a particular founder. Those trade-offs need to be weighed against actual needs rather than assumed from a city’s reputation.
What the evidence says about moving
A study of high-potential U.S. startups found that 6.6% moved across state lines within their first five years. Those that moved soon after founding tended to choose traditional startup hubs; companies moving later tended to choose lower-tax cities. This is evidence about a particular group of high-potential startups—not all new businesses—and it does not prove that relocating caused a company to succeed. It does show that moving is one option some founders use, not a universal first step.
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A separate, older Census working paper found that new-firm startup rates in cities were positively related to the share of adults with college degrees and to the concentration of existing establishments in the same industry and area sector. These associations point to plausible advantages of local talent and industry knowledge, but the 2003 study should not be treated as a current ranking of cities or a forecast for an individual founder.
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It can shape how easily founders meet investors and develop relationships, but the available evidence does not establish equal fundraising access for founders inside and outside major hubs. A 2026 Journal of Business Venturing study using U.S. county data from 1986 to 2019 reports that venture-capital inflows were associated with broader local effects on employment, payroll and venture creation, beyond the firms receiving funding. Its reported estimate includes at least one venture, 41 jobs and $7 million in payroll per $1 million invested. Those are study-level estimates, not a prediction for an individual company or a guarantee that a remote founder can raise money.
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Funding geography also varies by country. A 2026 National Bureau of Economic Research working paper on African startup activity reports concentration in a few hubs and says about 80% of VC funding in its African context involves a foreign investor. That finding is not a global statistic and should not be applied to U.S. fundraising. It is a reminder that the role of hubs and the sources of capital depend on the ecosystem in question.
Decide whether your venture needs you to relocate
Assess the resources your company needs in the next stage—not the resources a famous startup story says a founder should have. For each item below, identify a reliable way to access it, locally or otherwise:
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- Customers: Do you need frequent in-person contact, or can you reach and serve them remotely?
- Industry knowledge: Are relevant customers, suppliers, employers, universities or experienced operators nearby?
- Co-founders and employees: Can you recruit the expertise you need locally, remotely or through planned travel?
- Mentors and peers: Can you build relationships with people who understand your market and stage?
- Capital: Are the right investors accessible through introductions, remote meetings and occasional trips, or does the business depend on frequent local contact?
- Costs and taxes: Would a move’s expenses and tax implications be offset by concrete opportunities you cannot access otherwise?
- Operating model: Does your product, regulation or customer expectation require a physical presence in a particular place?
If a critical resource is missing, first test whether you can close the gap with targeted travel, remote hiring, local partnerships or a scheduled presence in a hub. Relocation becomes more compelling when a specific, recurring need cannot be met reliably from where you are and the benefits outweigh the cost and disruption. It is less compelling when the case rests only on a city’s reputation.
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There is no established general causal estimate showing that founders outside major hubs have lower survival or success rates. The evidence instead points to different mechanisms at different stages: places vary in business-application activity and transition to employer firms; local talent and industry concentration can matter; and venture-capital activity can have wider effects on its surrounding area. None of that makes a move mandatory. Choose a location strategy around the customers, people, knowledge and financing your particular company needs.
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