In Milwaukee, a startup’s dollar goes much further than in Silicon Valley

Posted by Nick Williams from Milwaukee Business Journal on January 23, 2019

For tech startup companies, investment dollars go much further in Milwaukee than they do in Silicon Valley.

That bodes well for the Milwaukee region in attracting emerging tech companies looking for a place to settle outside of California.

A lower cost for renting office space, lower salaries for software engineers and lower administrative costs make Milwaukee a top 25 city for startup purchasing power, according to VCArbitrage, an online calculator created by entrepreneur Bob Moore, the co-founder and CEO of Philadelphia-based Crossbeam. Crossbeam’s analytical software allow entrepreneurs to see what they can gain by raising money in one city and spending it in another.

If Milwaukee entrepreneurs were to raise $1 million from Silicon Valley investors, they would have $1.67 million of purchasing power in Milwaukee. Milwaukee ranks No. 12 on Moore’s list, right behind Lincoln, Neb. El Paso, Texas, ranks No. 1 on the list.

“As startup ecosystems grow in cities across the country, new startups can access more resources, mentors and community members. Along with the purchasing power advantage, it makes starting up outside Silicon Valley more compelling than ever,” Moore said.

Compared with San Francisco, ramping up hiring for a startup company in Milwaukee is significantly cheaper. The average salary for a software engineer in Milwaukee is $85,000, compared with $137,000 in San Francisco, VCArbitrage shows, while hiring a sales representative or office administrator in Milwaukee, on average, is $59,000, compared with $85,000 in the Bay Area.

As for office space, a startup company in Milwaukee can spend $200 for a co-working desk, compared with $700 in San Francisco, the calculator shows.

Salary and sales/admin jobs were determined using data on Indeed and Glassdoor. For rent, data was pulled from real estate firms, public listings and co-working buildings.

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