Move to California if you can

California has always been a magnet for venture capital.  According to Dow Jones VentureSource, California attracted 45% of venture capital in 1997, 46% in 2007, and 54% in 2016.  But, does this mean California is where the most successful tech companies are? After all, raising capital is not synonymous with success. 


To answer the question, we looked at the headquarters of 122 publicly traded tech companies we follow in SaaS (74), social media (4), marketplaces (16), content distribution (7), gaming (4), ecommerce (11), payments (1) and new hardware (5).  These are some of the most prominent names in tech with material revenue – the 74 SaaS companies have median revenue of $225mm for instance– so if you’re in this group of public companies, you’ve been a success.  Below is the raw data.  Summary data follows after. 


RAW DATA         RAW DATA      
Name Ticker Geography State   Name Ticker Geography State
SaaS         Social      
2U TWOU Lanham, MD MD   Facebook FB Menlo Park, CA CA
Athenahealth, Inc. ATHN Watertown, MA MA   Line Corp LN Tokyo, Japan Japan
Bazaarvoice, Inc. BV Austin, TX TX   Snap Inc SNAP Venice, CA CA
Benefitfocus, Inc. BNFT Charleston, SC SC   Twitter TWTR San Francisco, CA CA
Box, Inc. BOX Redwood City, CA CA          
BroadSoft, Inc.  BSFT Gaithersburg, MD MD   Marketplaces      
Castlight Health, Inc.  CSLT San Francisco, CA CA   Priceline PCLN Norwalk, CT CT
Cornerstone OnDemand, Inc. CSOD Santa Monica, CA CA   eBay EBAY San Jose, CA CA
Five9, Inc.  FIVN San Ramon, CA CA   Sabre SABR Southlake, TX TX
Hortonworks, Inc. HDP Santa Clara, CA CA   TripAdvisor TRIP Needham, MA MA
HubSpot, Inc. HUBS Cambridge, MA MA   Shutterstock SSTK New York, NY NY
LivePerson Inc. LPSN New York, NY NY   Match Group MTCH Dallas, TX TX
LogMeIN, Inc. LOGM Boston, MA MA   IAC IAC New York, NY NY
Marin Software, Inc. MRIN San Francisco, CA CA   Expedia EXPE Bellevue, WA WA
Medidata Solutions, Inc. MDSO New York, NY NY   Trivago TRVG Dusseldorf, Germany Germany
MobileIron, Inc. MOBL Mountain View, CA CA   Etsy ETSY Brooklyn, NY NY
New Relic, Inc. NEWR San Francisco, CA CA   Lending Club LC San Francisco, CA CA
Proofpoint, Inc. PFPT Sunnyvale, CA CA   Angie's List ANGI Indianapolis, IN IN
Qualys, Inc. QLYS Redwood City, CA CA   Zillow Z Seattle, WA WA
RealPage, Inc. RP Richardson, TX TX   Groupon GRPN Chicago, IL IL
RingCentral, Inc. RNG Belmont, CA CA   GrubHub GRUB Chicago, IL IL, Inc.  CRM San Francisco, CA CA CRCM Waltham, MA MA
ServiceNow, Inc. NOW Santa Clara, CA CA          
Splunk, Inc. SPLK San Francisco, CA CA   Content Distributors      
SPS Commerce, Inc. SPSC Minneapolis, MN MN   Google GOOGL Mountain View, CA CA
The Ultimate Software Group, Inc. ULTI Weston, FL FL   Yelp YELP San Francisco, CA CA
Veeva Systems Inc. VEEV Pleasanton, CA CA   TrueCar TRUE Santa Monica, CA CA Ltd. WIX Telaviv, Israel Israel   WebMD WBMD New York, NY NY
WorkDay, Inc. WDAY Pleasanton, CA CA   Netflix NFLX Los Gatos, CA CA
Zendesk, Inc. ZEN San Francisco, CA CA   Pandora P Oakland, CA CA
Secureworks SCWX Atlanta, GA GA   Yext? YEXT New York, NY NY
Appfolio, Inc. APPF Goleta, CA CA          
Atlassian Corporation TEAM London, UK UK   Gaming      
Twilio TWLO San Francisco, CA CA   Activision Blizzard ATVI Santa Monica, CA CA
Instructure INST Salt Lake City, UT UT   Electronic Arts EA Redwood City, CA CA
Mindbody, Inc MB San Luis Obispo, CA CA   Take-Two Interactive TTWO New York, NY NY
Shopify SHOP Ottawa, ON Ontartio   Zynga ZNGA San Francisco, CA CA
Xactly XTLY San Jose, CA CA          
Nutanix NTNX San Jose, CA CA   Ecommerce      
Apptio APTI Bellevue, WA WA   Amazon AMZN Seattle, WA WA
Blackline BL Los Angeles, CA CA   Alibaba BABA Hangzhou, China China
Coupa Software COUP San Mateo, CA CA   1-800, Inc. FLWS Carle Place, NY NY
Okta OKTA San Francisco, CA CA   Shutterfly SFLY Redwood City, CA CA ALRM Tyson, VA VA   QVC Group QVCA Englewood, CO CO
Alteryx Inc AYX Irvine, CA CA   Wayfair, Inc. W Boston, MA MA
Amber Road AMBR East Rutherford, NJ NJ   PetMed Express, Inc. PETS Delray Beach, FL FL
Appian Corporation APPN Reston, VA VA, Inc. OSTK Midvale, UT UT
Blackbaud BLKB Charleston, SC SC   U.S. Auto Parts Network, Inc.  PRTS Carson, CA CA
Callidus Software CALD Dublin, CA CA   HSN, Inc. HSNI St. Petersburg, FL FL
Channel Advisors ECOM Morrisville, NC NC   LightInTheBox Holding Co., Ltd. LITB Beijing, China China
Cloudera CLDR Palo Alto, CA CA          
Covisint COVS Southfield, MI MI   Payments      
Ebix EBIX Johns Creek, GA GA   Square SQ San Francisco, CA CA
Ellie Mae ELLI Pleasanton, CA CA          
Everbridge Inc EVBG Burlington, MA MA   New Hardware      
FireEye FEYE Milpitas, CA CA   TiVo Corporation TIVO San Carlos, CA CA
HealthStream HSTM Nashville, TN TN   Garmin Ltd GRMN Schaffhausen, Switzerland Switzerland
J2 Global JCOM Los Angeles, CA CA   GoPro GPRO San Mateo, CA CA
Kinaxis KXS.TO Ottawa, ON Ontario   Fitbit FIT San Francisco, CA CA
Medidata Solutions MDSO New York, NY NY   Apple AAPL Cupertino, CA CA
Mimecast MIME London, UK UK          
Mulesoft MULE San Francisco, CA CA          
NantHealth NH Culver City, CA CA          
Paycom Software PAYC Oklahoma City, OK OK          
Paylocity Holding PCTY Arlington Heights, IL IL          
Q2 Holdings QTWO Austin, TX TX          
Tabula Rasa Healthcare TRHC Moorestown, NJ NJ          
Talend TLND Suresnes, France France          
Tangoe TNGO Orange, CT CT          
The Trade Desk TTD Ventura, CA CA          
Upland Software UPLD Austin, TX TX          
Workiva WK Ames, IA IA          
Yext YEXT New York, NY NY          
Zix ZIXI Dallas, TX TX          



State Companies Concentration
CA 54 44%
China 2 2%
CO 1 1%
CT 2 2%
FL 3 2%
France 1 1%
GA 2 2%
Germany 1 1%
IA 1 1%
IL 3 2%
IN 1 1%
Israel 1 1%
Japan 1 1%
MA 7 6%
MD 2 2%
MI 1 1%
MN 1 1%
NC 1 1%
NJ 2 2%
NY 11 9%
OK 1 1%
Ontario 1 1%
Ontartio 1 1%
SC 2 2%
Switzerland 1 1%
TN 1 1%
TX 7 6%
UK 2 2%
UT 2 2%
VA 2 2%
WA 4 3%


Key observations are below:


-Of the 122 companies, 54 of them are in California (44%).  The next largest concentration is in New York City (11 companies for 9%), followed by Texas and Massachusetts (6% each).  California is definitely where a majority of the most successful tech companies are and is almost 4x larger than the #2. 


-Oddly, the marketplaces and ecommerce segments of our dataset do not show a concentration to California or any other state.  Only 2 of the 14 marketplace companies are in California.  Only 1 of the 11 ecommerce companies is in California.  It’s not clear to us why these two segments aren't as concentrated to California.


In conclusion, VC money has been flowing to California for decades and almost half of the successful tech companies we follow are based there.  Whether it’s the capital, the culture of the Valley, the preponderance of developers/engineers, or there is just something in the water, it’s easy to believe that being in California does improve the odds of success.  Get there if you can.       


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