Industry Analysis - June 29, 2022

The Most Popular Startup Industries in Every State

Celebrating Independence Day is a way to honor the values that make the United States such a powerful nation. America’s culture of freedom, democracy and entrepreneurship makes it the largest economy in the world. The US also has the largest amount of venture capital investments, far ahead of the entire European Union. That helps make the US startup ecosystem one of the most exciting spaces for investors to explore.

For a long time, startup investing was restricted to accredited investors. Fortunately, the democratization of startup investing now allows any American to build wealth online. And entrepreneurs from all over the 50 states are raising funds online. 

This week, we’re looking at the top industries for online startup raises in every state. (Note: Some states were left blank due to statistical insignificance.) Among the 24 industries collected by KingsCrowd, only a few emerged as the most popular.

Half of the states have more startups raising in the food, beverage and restaurant industry than in any other industry. The three states with the largest number of raises in the last year — California, New York and Florida — are also dominated by this industry. The business services, software and applications industry is at the top in seven states, including Texas. And the alcohol, tobacco and recreational drug industry follows as the top industry in six states.

There are a few reasons why the food, beverage and restaurant industry is so popular. Online retail investors often invest smaller dollar amounts than those in the venture capital (VC) space. VCs mostly look for high growth startups that revolutionize their industries. They’re looking for cutting-edge technology and other highly innovative qualities. The food and beverage industry is crowded and lacks the kind of extreme innovation that attracts VCs. Consumer goods represent only about 6% of VC investments

So raising money online is a good strategy for startup founders in the food industry. They’re more likely to find local investors who may be more motivated to support their product or restaurant. Amateur investors might be more interested in investing in products they are familiar with. Plus, raising online is a powerful marketing strategy for startup founders. As they collect funds, they onboard hundreds of commited investors who are likely to be enthusiastic about spreading the world about the company’s products and helping it grow. 

The online startup investing space is the perfect environment to invest in American businesses, whether they’re high-tech startups or main street restaurants. That’s something worth celebrating this July Fourth.

About: Léa Bouhelier-Gautreau

Léa is passionate about impact investing and sustainability. Prior to KingsCrowd, she worked for Stanford’s accelerator, StartX, helping to select the most promising entrepreneurs. She also led the first award-winning study on the Malawian startup ecosystem. In her free-time, she volunteers to help entrepreneurs in Cameroon, Brazil and Colombia. Léa holds a degree in Anthropology from France and is currently enrolled in the UC Davis MBA program.

View more articles by Léa

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