Thriving Cities For Startup Businesses
Say “startup” and most think Silicon Valley, Austin or Boston. But investors and entrepreneurs say a new group of startup cities is emerging — some in unlikely places.
If a startup wants investors, mentors and a supportive community — but not the expensive costs of a major city — Boulder is the place to be.
Entrepreneurs there say the city, which borders the Rocky Mountains just northwest of Denver, has all the benefits of Silicon Valley. It has a developed software industry that began to grow in the mid-1990s. Well-educated types are drawn to its prestigious research institutions, like the National Center for Atmospheric Research.
And the entrepreneurial spirit has long been present: The natural foods industry was practically born there. The city has since become a hub for green tech.
Fewer than 300,000 people live near Boulder, but it draws more venture capital than cities many times its size.
What really makes Boulder stand out, though, is its proven startup development program: TechStars. Many refer to it as the best in the country, and the program claims strong stats to back that up. Since it began in 2007, the program has helped 65 startups reach $115 million in funding. All but 8 were acquired by other companies or remain active.
The city has made a major turnaround in recent years. It all started with a depressing economic report that showed the region was falling behind on venture capital. The report showed new companies had access to investors who supplied seed-stage money — the first round of funds. But after that, the money dried up. Startups had to fend for themselves.
To remedy this, big corporations in Cincinnati stepped in to create Cintrifuse, which provides office space and connections to entrepreneurs. Startups also get access to investors nationwide through a special funding program used to draw investments from outside the city.
Smart entrepreneurs combine this help with early stage funding from CincyTech, a nonprofit venture capital provider, and mentoring from classes at The Brandery, a top 10 accelerator.
Music City, USA has long been a hub for entrepreneurs — from musicians to the record companies that back them — but these successes rarely worked together. That’s changed.
In 2010, the city’s chamber of commerce created the Entrepreneur Center, which brought investors together and offered startups mentoring and fundraising opportunities.
It’s working so far, as Nashville has shot up the ranks of PricewaterhouseCoopers’ MoneyTree report, which gauges venture capital activity. The city’s investors have put $72 million in 21 companies so far this year, compared to $38 million in 8 companies in 2009.
Nashville also offers startups a lower cost of living than rival cities in Silicon Valley or the Northeast. Jerry Bostelman, CEO of a staffing company there, said young entrepreneurs are wrong to think Nashville is just “some hillbilly town.”
Entrepreneurs have found that Provo, like Boulder, provides top-notch resources paired with reasonable living expenses. Startups can also turn to research facilities at the Mormon Church-run Brigham Young University, which is gaining recognition for its support of student business ventures.
The strongest resource here is BoomStartup, an accelerator, which means it provides entrepreneurs guidance and network opportunities. The program was named one of the top 15 in the country last year by media website TechCocktail.
Much of that is thanks to Big Omaha, a conference on innovation and entrepreneurship that aims to be as big as SXSW or TED. It draws in entrepreneurs from across the Midwest.
Meanwhile, startups have a one-stop information hub with the Silicon Prairie News, a local digital media company dedicated to fostering the startup community there.
Like other cities in the nation’s heartland, Omaha isn’t yet in full bloom. But the Kauffman Foundation’s director of research and policy, Dane Stangler, said Omaha is home to big corporations that are turning to startups for new tech approaches to banking and insurance.blog comments powered by Disqus