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We’ve long been aware of the “hiatus in venture capital funding”, especially out of Silicon Valley. The unicorn valuations that we saw last year made for a more hesitant, and conservative market of investors today. Recent reports reflect the substantial decrease we saw in investments within a year’s time. In an article for earlier this month, journalist, Jason Rowley discusses the severity of the situation at hand.

Silicon Valley has long been deemed, the epicenter of successful startups. While it’s certainly still the most active market, Silicon Valley saw the greatest decrease in investments between Q1 of this year and last. In an earlier blog of mine I discussed the reasoning behind this more conservative nature amongst VCs. Those flash-in-the-pan investments in those “billion dollar” companies, made for a more conscious environment. Alongside that theory, which could also be a contributing factor in the decline of investments we’re seeing, is the competitive market. Silicon Valley is known for emerging startups, thus it’s become a bit over crowded. The number of starving startups who are looking for various stages of funding has grown drastically over these past several years. Unfortunately, the number of investors hasn’t grown at the same speed. When there are several startups pitching their idea for an on-demand service, not everyone is going to get a piece of the pie. Which is why we’re seeing growth in outlying cities.

According to the data by Mattermark, several cities, nationwide, saw an increase in the volume of investments. While there has certainly been a pull-back from investors in central hubs, such as Silicon Valley and New York, other cities have emerged in startup investing activity. Boston saw the greatest increase, due to the biotech boom we’re seeing, but more low-cost cities are beginning to develop startup communities with local investors. Kansas City, Portland, and  St. Louis all saw a significant increase in investments, which one could attribute to the lack of competition in those regions or the development of a profitable ecosystem.

As the competition in Silicon Valley will likely remain relevant, those looking for funding might opt for an emerging region. Funding in Silicon Valley may seem scarce, due to a more reserved environment, but it’s still there, with the right pitch.