The Role of Geography on Innovation

From Athens to Silicon Valley, humans always associated innovation with space. As the world increasingly globalizes and capital increases in fluidity, how does geographic space impact the flow of venture capital, what is the role of cross-city ties, and how does internal investment and fund-raising describe a city's position in an ever-globalizing world? Using 57,000 investment instances from 2000-2014 reported by CrunchBase, the visualization helps answer these questions.

Who Finances Innovation

For those not familiar with investing, a common question is: where do venture capital firms get their money? And what does this flow of capital look like? There are several main avenues of capital, and this following graphic shows a very simplified version of the process.

Source Funders: These are the organizations that usually own large conglomerations of their own money, or invested money from individual customers. This category includes a wide array of institutions, including pension funds, endowments, charitable foundations, insurance companies, and large corporations.

Indirect Investors: These are usually either Advisory Firms, or Fund of Funds firms. They provide an indirect method of investing for Source Funders, rather than a direct investment into a venture capital firm.

Venture Capital Firms: While their capital comes mainly from outside sources, VCs are usually the deciders in where this money goes, how much of it, and to what companies. For many startups, VCs are the major source of funding.

Explore Theory: The Roles and Types of Cities

Visualizing the Sociological Theory of types of place and venture capital based off of domestic funding percentages


  • Companies raise a high amount of funding from investors in the same city. Investors invest a high amount in the same city.

  • Self-Financed cities

  • Historic or contemporary financial centers

Tech Hubs

  • Investors invest a high amount in the same city, but companies receive far more funding from investors in other cities

  • Rising Centers: nascent VC Scene but hot tech scene

  • High amount of foreign funding

  • Might be forced out of necessity

Spatially Mismatched

  • Investors mostly invest in other cities, and companies receive most of their funding from investors in other cities

  • VC/Tech spatial mismatch

  • Represents a disequilibrium between local tech and funding

Financial Centers

  • Funding centers for other cities

  • High amounts of investment in other cities

  • High amounts of investment also in self

Why This Matters

Fostering the New Economy

A 2001 National Governors Association report stated, ‘‘Venture capital is critical to growing the new businesses that will drive the ‘new economy’. Finding ways to nurture the culture of entrepreneurs, and the capital that feeds them, must be the top priority of states” (Henry Chen a, et al. 2009).

Taxpayer Dollars

The National Association of Seed and Venture Funds estimated that state venture capital funds in 2008 totaled $2.3 billion.

Rising amounts of Place-Based Investment

An increasing share of the approximately $50 billion that states spend on industrial incentive areas is going to venture-backed firms (Henry Chen a, et al. 2009). Therefore, geographically studying venture capital is necessary and timely.

Explore Data

Learn to use the visualization.


over the nodes that represent cities/regions to get quick information regarding the city/region as well as its direction, type, and magnitude of funding, based on the current filters.


on a city/region to visualize venture capital flows coming to or from the city, scrolling down to see in-depth data -- hover over cities with arcs drawn to/from them to show relational data to the clicked node. Also click anywhere on land on the map to reset.


that the visualization uses size to encode information, with the circle radius displaying dollar amount of funding while the widths of the arcs indicate the investment quantity from one city to another, with direction and color showing flows of capital.


data dynamically by incoming funding (default aqua/green-colored circles) or outgoing investment (default purple-colored circles), by industry (of the companies receiving funding), by time frame (yearly from 2000 through 2014), and by United States or world map view.


with your mouse/trackpad on the map visualization to explore the information you care about and gain a clearer view. When you click on a city/region to show its arcs of investment or change your filter focus, the map automatically zooms back out to its default setting.


cities based on their investment archetype (only for the outgoing filter). Typically, cities are shaded purple for outgoing investment, but when selected, self-sustaining cities are highlighted blue, tech hubs red, spatially mismatched orange-brown, and financial centers dark pink.

Visualization of Venture Capital Flows

Geographic Scope

Direction of Capital Flow

Time Period


City Type Highlighter

Venture Capital Flows: A Visualization

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