The largest city by funding after Silicon Valley would appear to be London, which raised 2/3 of the around 1/30th as much funding in the whole of the UK as in t

The largest city by funding after Silicon Valley would appear to be London, which raised 2/3 of the around 1/30th as much funding in the whole of the UK as in the US [1]. I suspect that there are more than 1/30 as many startups but that the average deal size in Europe is much smaller. I would say the problem is less the "local rules" like tax systems - after all, nobody would call California tax-friendly on a global basis - and more the sheer number of existing, successful, wealthy entrepreneurs for whom angel investing is second nature, coupled with a professional, long-established venture funding industry with diversified, long-term committed and professional LPs (such as endowments and pension funds). PG commented on the aggressivity of deal making in the Valley even compared to the established and world-famous hub of Boston [2]. The whole essay expands well on this thread topic. As a Singapore resident for several years, I used to think that "the rules" were what mattered - taxes, government regulation, ease of obtaining visas, cost of living, proximity to large untapped market and cheap talent... but the stories appear in HN and elsewhere regularly for a reason: none of the hubs have even a fraction of the activity of the Valley and are unlikely ever to have it, no matter how much matched funding the government does. Would you rather raise 2m for 10% in 3 weeks, or 200k for 20% in 3 months? Of course, that 200k is several years' funding for an Indonesian startup. In my own attempts at fund raising, I often had to explain what a startup was (thank you PG for your great essays, which are immensely helpful there) to seasoned "classical" investors with dozens of deals under their belt. I don't blame Singaporeans and other "foreign hub" residents for moving to the Valley as soon as they can. The result: typing this on an American-designed Macbook Pro whose OS is based on BSD (where B stands for Berkeley), on a browser designed by Google in Mountain View by the same company that designed my phone. The tech landscape is utterly dominated by American companies even if as much as 40% of their founders are first or second gen immigrants [4]. The sad thing is that governments know full well that the rules have, at best, only a marginal effect on an established industry hub [3], and so get away with a lot more than they should. [1] http://techcrunch.com/2015/04/02/londons-startups-hit-a-high-of-682m-in-vc-funding-in-q1-2015/ http://techcrunch.com/2015/04/02/londons-startups-hit-a-high... [2] http://www.paulgraham.com/startuphubs.html http://www.paulgraham.com/startuphubs.html - "Over and over, I've seen startups we've funded snatched by west coast investors out from under the noses of Boston investors who saw them first but acted too slowly. [...] And yet within a month it had happened again: an aggressive west coast VC who had met the founder of a YC-funded startup a week before beat out a Boston VC who had known him for years. By the time the Boston VC grasped what was happening, the deal was already gone." [3] David Ogilvy mentions in one of his books that his agency paid as much as 73% tax. How's that California tax rate looking now? [4] http://www.forbes.com/sites/robertlenzner/2013/04/25/40-largest-u-s-companies-founded-by-immigrants-or-their-children/ http://www.forbes.com/sites/robertlenzner/2013/04/25/40-larg...