You may have read it, great link fodder for the Midwest movement.
The premise of the piece is to see “how the Midwest and its metros stack up against one another” in terms of venture capital and startup activity as measured by four areas that add up to determine the “best”.
- Metros ranked by number of startups founded since 2015
- Metros ranked by investment round counts
- Metros ranked by funding
- Metros ranked by number of venture investors
The two main factors that underpin the author’s entire premise:
- It’s based on companies that are in Crunchbase with supporting information (such as investment rounds/amounts)
- It’s broad spectrum – inclusive of all types of companies across all industries, not limited to just the technology ones.
So after reading (and re-reading) the article with an openly curious mind, some big discrepancies were identified in the source data used to reach final conclusion. Let’s just focus just on #1 for now: the number of startups founded since 2015 in Minneapolis metro across all sectors of business.
According to Crunchbase that is…72 in the past 2.5 years.
What if someone locally actually tracked this and could compare/contrast?
We do, so let’s look at tech specific data see 138 tech related companies in the database with a formation date of Jan 1 2015 – June 2017. One hundred and thirty eight companies – twice that of Crunchbase – not counting med device, life science, clean tech, food and beverage, etc.
Because again, their company database isn’t limited to just tech and even with that in mind — still double just in tech! Minneapolis MSA tech startups new formations 1/1/2015 – 7/1/2017 based on TECHdotMN data:
In fact, the more you actually look into Crunchbase’s data, the more obvious it becomes; just do a simple, free, high level search to see for yourself: companies headquartered in Minneapolis – across all sectors.
This yields approximately 1,003 results according to Crunchbase. Really?
Because there’s at least 1,003 tech companies alone headquartered in Minneapolis, not even counting other sectors of business as their database does. It’s such a small fraction of the Minneapolis business community — that to say Crunchbase has 25% inclusion would be generous, it’s likely closer to 10-15% by estimate.
This is so surprisingly bad that I feel like I’m missing something big here and stand to be corrected by the Internet and/or Jason D. Rowley himself at any moment.
Please do – because otherwise Crunchbase data isn’t nearly as credible as once thought, at least not qualified to be used in proclaiming the “best” of anything based on such limited scope (not even questioning the veracity of the other measures here, items 2-4, though willing to fact check if/as needed).
Who knows about the lack of Crunchbase’s data as it applies to other metropolitan areas considered ‘Midwest’ for the sake of this article – though they admit only counting ~1,000 company formations across Midwest markets over the past 2.5 years…so just how wrong are they about it all?
To be clear – there is no to reason to think that the shortcomings of Crunchbase are unique to Minneapolis or there’s any conflicts of interest / foul play on behalf of the author. Can’t speak to those things.
But we can and will speak up for Minneapolis in saying you got us wrong on this one…