Google - 
Listen To The Story

How do you create the next Silicon Valley?

Don't focus on finding the venture capitalists on Sand Hill Road -- instead, look to build college campuses like Stanford University or the University of California, Berkeley. So says a new study from the Kaufman Foundation which looked at new businesses in 356 metro areas. 

"Their results -- the fact that you have lots of educated people in the places where there are a lot of start ups -- is absolutely right," says Steve Kaplan, a professor of entrepreneurship and finance at the University of Chicago’s Booth School of Business. Kaplan notes the research doesn't prove graduates will fuel more start-ups, only that the two tend to show up in the same cities.

"You also need accelerators, co-working space, active angel investors, organized early stage venture capitalists," says Brad Harrison, a managing partner with Scout Ventures, who adds that new graduates alone can't create a tech hub. "Especially if you take unseasoned first, time entrepreneurs. If they've never worked before, it's a learning curve in just having them understand what it takes to build the company."

Kaplan says that requires other local ingredients: a government that supports business via regulations and taxes, and successful previous start-ups, like Google, Microsoft, and Groupon, to lead by example and create an entrepreneurial mindset and culture, and also, to provide one last critical component -- money. 

“I think the best compliment I can give is not to say how much your programs have taught me (a ton), but how much Marketplace has motivated me to go out and teach myself.” – Michael in Arlington, VA

As a nonprofit news organization, what matters to us is the same thing that matters to you: being a source for trustworthy, independent news that makes people smarter about business and the economy. So if Marketplace has helped you understand the economy better, make more informed financial decisions or just encouraged you to think differently, we’re asking you to give a little something back.

Become a Marketplace Investor today – in whatever amount is right for you – and keep public service journalism strong. We’re grateful for your support.