Location still matters—more than ever. Bay Area founders command significant valuation premiums that compound with each funding round.
The Bay Area Premium
Bay Area
Premium Market • Highest Valuations
- Seed: $24M
- Series A: $75M
- Series B: $215M
- Series C: $450M
Non-Coastal
Rest of US • Lower Valuations
- Seed: $18M
- Series A: $55M
- Series B: $131M
- Series C: $280M
The Premium Gap
- Premium vs Non-Coastal at Series B: +64% Higher Valuations
- Discount vs Bay Area at Series B: -39% Lower Valuations
The Premium Gap Widens With Stage
- Seed: +33%
- Series A: +36%
- Series B: +64%
- Series C: +61%
Key Insight
The Bay Area premium compounds with each round—same company, same metrics, 64% higher valuation at Series B.
US AI Investment Concentration
- US private AI investment: $250.2 billion (68% of global)
- China: $9.3 billion (12x less than US)
- UK: $4.5 billion (24x less than US)
- 85% of global AI funding went to US companies
- 53% of global AI deals originated in US
Implication for 2026: Founder selection increasingly favors digital-first, Bay Area-based, repeat founders. The economic incentives are structurally stacked.
This is part of a comprehensive analysis. Read the full analysis on The Business Engineer.
