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The Next Big Idea: What Makes Cities Good Homes For Startups

A map showing the migration patterns of startup founders in Europe, created b...

Credit: Startup Heatmap Europe

Above: A map showing the migration patterns of startup founders in Europe, created by UC San Diego researcher Natalie Novick.

The Next Big Idea: What Makes Cities Good Homes For Startups

GUEST:

Natalie Novick, graduate researcher, UC San Diego's Center for Comparative Immigration Studies

Transcript

San Diego companies raised between $350 million and $550 million in the first quarter of the year, according to the two main reports that monitor venture capital funding.

The quarterly MoneyTree and Venture Monitor reports used different metrics to track the investments, but both found San Diego businesses received more investment dollars than last year, though the money went to fewer companies this year.

RELATED: The Next Big Idea: A Guide To San Diego’s Innovation Economy

Natalie Novick, a graduate student at UC San Diego’s Center for Comparative Immigration Studies, researches what makes cities like San Diego attractive for startup founders seeking those investments. Many city leaders don’t understand how modern entrepreneurs think, she said, which means their outreach may be ineffective. Access to local investors was actually the least important of four major factors that founders consider when deciding where to locate their business, according to her findings. A talented worker pool and an ecosystem of major research institutions, mentors and other entrepreneurs were most important.

“What you really see, talking with these entrepreneurs, is that they’re really driven by a mission, some unique problem or question,” Novick said. “So offering different kinds of incentives that would support an economically-minded entrepreneur doesn’t always work for these mission-driven, often very idealist entrepreneurs.”

RELATED: The Next Big Idea: What Happens When A Startup Fails

She also cautioned that San Diego’s marketing has historically focused on its tourist appeal.

“For San Diego to be a great destination for startups it will need to share its strengths with the world and let it be known for them,” Novick said. “It has much to offer but people must see this as a ‘serious’ place and not just a vacation spot.”

As part of a special series, The Next Big Idea, on KPBS Midday Edition, Novick discusses what American startups can learn from how European founders get their funding.

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