Atlanta: The "New South" Powerhouse for Entrepreneurship
Long gone are the times when only major cities - such as New York City and San Francisco – were considered the perfect places for entrepreneurs to start new businesses. In fact, over recent years, some smaller cities have been able to compete with larger areas when it comes to a plethora of business-boosting aspects. These include Atlanta, whose startup community is extraordinarily thriving with countless successful new businesses across a variety of sectors - fintech, healthcare, digital security and entertainment, to name just a few.
Ranked as the #1 U.S. city for startups that is not New York or San Francisco by FitSmallBusiness(dot)com and one of the Top Rising Cities for Start-Ups by Forbes, Georgia's capital and the largest city boasts several advantages that aspiring entrepreneurs should consider and leverage as they work to bring their dreams to reality. But, which specific unique "DNAs" does Atlanta have over other cities for rising entrepreneurs? What makes the business climate in Atlanta so attractive and vibrant? Let's read on to uncover!
#1. Undisputed Hub for Nurturing High-Growth Unicorns & Talented Entrepreneurs
There come various times when Atlanta has seen the unicorn – such a fabled creature of lore has been undeniably sighted most often in Silicon Valley, yet Atlanta has nurtured several companies with exits valued at $1 billion+. Covered by a massive canopy of trees, this "forest" city has been home for a large number of high-growth unicorns, including Kabbage, Rubicon, Zeevex, GreenSky, and AirWatch.
Undoubtedly, the city is where a plethora of startup success stories began. Within the email marketing fame, MailChimp staggeringly bootstrapped their way to $400+ million by simplifying the process of email distribution. Besides, Scoutmob, a rare B2C Atlanta success story, rose to prominence as a deals app that eliminated the cost for consumers, legitimately competing with long-established sites such as Groupon and LivingSocial.
Besides, as the city claims the nation's third-largest concentration of Fortune 500 companies, Atlanta also hosts the global headquarters of corporations, especially The Coca-Cola Company, The Home Depot, Delta Air Lines, AT&T Mobility, Chick-fil-A, and UPS. Particularly, over 70% of Fortune 1000 companies conduct business operations in the city's metro area, and the region does host offices of more than 1,250 multinational corporations.
What should be noted is that successful Atlanta-based entrepreneurs have started, scaled, and sold their own companies to invest back into the Atlanta community and nurture the next generations of startup founders. Amongst these ground-breaking and dedicated entrepreneurs is David Cummings, who founded Atlanta Tech Village in 2012 after the acquisition of his bootstrapped marketing automation company, Pardot. After the $95 million exit, Cummings arrived at the investment decision in Atlanta Tech Village, a 103,000 square foot hub for entrepreneurs, which stands as is the largest tech hub in the Southeast as well as the 4th largest in the United States.
Housing about 300 companies by 2018, the Village puts strong emphasis on creating partnerships with larger corporations like Turner, Google, Amazon, Microsoft and Coca-Cola to form relationships between startups and larger establishments – with more than 400 entrepreneur-focused events on the annual basis.
"This opened the door so that people know that they don't have to leave Atlanta to build a startup," stated Karen Haughton, Vice President of Atlanta Tech Village.
Another set of groundbreakers is Dr. Paul Judge and Allen Nance who started the leading seed-stage venture fund TechSquare Labs after their stunning success as serial entrepreneurs. As an eminent inventor with nearly 30 patents to his name, Dr. Paul Judge is the co-founder of Pindrop Security while also being the founder of the wi-fi router company Luma. In the year of 2003, Judge was also named on the MIT Technology Review list of Top 100 young innovators worldwide. As regards Allen Nance, he is the founder of WhatCounts, which he established from a rented room and grew into an international firm with targeted messages in more than 35 languages. In addition to WhatCounts, the talented entrepreneur is also the co-founder of the e-commerce company Springbot.
Serving as an incubator, co-working space, and seed to early-stage fund, TechSquare Labs prides itself on its inclusiveness and ability to "build something from nothing," as its motto states. This "Google" for Entrepreneurs hub is a 25,000-square-foot space housed in a former Office Depot, a sign of the founders' ability to disrupt a corporate entity with innovative ideas while building something from essentially nothing, a previously empty space.
"We take the companies that we invest in and constantly mentor, weekly or more in helping to create their businesses. We really want to strive to make sure they succeed," presented Daniel Sabio, TechSquare Labs's Community Manager, whose portfolio includes Ionic Security, Storj, Stackfolio, Fraudscope, and Insight Pool.
Another business powerhouse is Michael Tavani, the lone B2C ranger of the group, yet being a visionary in regards to the nascent B2C movement in Atlanta. Once yielding meteoric success with the digital deals site and app Scoutmob, Tavani did launch the renovated Switchyards Downtown Club which he founded along with fellow serial entrepreneur David Payne. Given its a 19,000-square-foot facility with an espresso bar, a 250-seat theater, 12 conference rooms, and one ping-pong table, Switchyards' concept was borne of coffee shop talks with other local startup founders. "The original idea was if we could do a coffee shop where everyone was working on B2C startups so people could talk about brand or design," stated Tavani. The 19,000-square-foot space caters to B2C companies and houses designers, developers, founders, "all of the ingredients to produce really strong brands."
#2. Favorable Business Climate
Low Cost of Living
Beyond any doubt, this factor is of utmost importance for new businesses, especially when it comes to ones operating on a shoe-string financial resource and/or are in their early stages. Compared to larger metropolitan areas, Atlanta is a relatively inexpensive city, where you don't have to generate as much money to experience a similar lifestyle as those living in larger cities.
Indeed, as more and more companies rely on technology to grow and expand their businesses, it's become less important where the business actually is, as long as you're able to access all of the resources you normally would if you were living in a bigger city. "It's become so much cheaper to start a business, especially here," shared Gail Margolies Reid, a business consultant and author of the book "The Complete Idiot's Guide to Low-Cost Startups."
He further explained, "Atlanta has a lot of free classes for entrepreneurs and it's really easy to find people to help and advise you. There are a lot of opportunities for innovation here because Atlanta is still not as innovative as Chicago, New York, or Los Angeles," so there's a lot of room for movement and growth.
There goes without saying that convenient transportation is really a big plus for conducting business activities. In fact, the world's busiest airport — Hartsfield-Jackson International — is located in Atlanta, which means that business travel is easy and more affordable, should you be already living near the city. Entrepreneurs are all allowed to meet with international clients and transport goods much more easily, in and out of the city.
What's more, MARTA — the city's bus and railway system — has been long regarded as the "key to attracting tech employees" in the area. David Dabbiere, CEO of Airwatch, particularly deems Atlanta's transportation system the "secret weapon" for his tech and security firm.
Supportive Local Initiatives
The state of Georgia in general and the city of Atlanta, in particular, do present lots of support for entrepreneurship. Particularly, Atlanta and the state of Georgia offer a variety of incentives for businesses to relocate, including assistance with site selection, as well as bonds, loans, and other incentives such as grants, conduit loans, and state tax credits.
One initiative exclusive to Georgia is the Centers for Innovation, which performs the role of connecting companies to partnerships and research to compete globally across such key industries as information technology, energy technology, and aerospace.
As stated by Ryan Waldrep, current President of the Dublin-Laurens County Development Authority, and the former Regional Director of the Georgia Department of Economic Development, "We work with local communities and local community leaders to develop the entrepreneurial ecosystem."
Furthermore, the Women's Entrepreneurship Initiative, a 15-month incubator for women entrepreneurs, was introduced by Kasim Reed - the 59th Mayor of Atlanta. While on the campaign trail, he had chances to meet a number of women entrepreneurs with home-based businesses, which motivated the former Mayor to launch this initiative in support of these women.
According to Theia Smith, the Founding Executive Director of the Women's Entrepreneurship Initiative, "When you have a local leader committed to that, the message that sends to entrepreneurs is that stewards of service are investing in what they're doing. To have that level of commitment on a local level is not something that you see happen often."
The community is truly welcoming, which is agreed upon by several entrepreneurs, including Rob Frohwein, co-founder of Kabbage. "I've found a lot of other places are friendly, but not necessarily inviting. Atlanta is inviting. That's a super important vibe for an entrepreneur."
#3. Entrepreneurial Culture Embracing Diversity
"Atlanta is really leading the world in terms of inclusive innovation."- Rodney Sampson, Executive Chairman & CEO at Opportunity Hub, OHUB
Atlanta is a city with many layers of built-in diversity that makes for a multifaceted community of diverse entrepreneurs. In terms of race, the presence of minority-owned businesses is truly felt, seen, and heard in this city with companies such as Techturized, founded by four black women engineers and graduates of Georgia Institute of Technology. Through the app Myavana, Techturized addresses the hair care needs of women of color.
There also exist a handful of organizations, especially TechLatino, with 15 chapters and 6,000 members across the United States and internationally, whose primary aim is to develop tech professionals within the Hispanic community. In addition to TechLatino, Atlanta is also home to The Big Innovation Center, a 12-week accelerator for black and Latina female startup founders. Another notable inclusion-fostering organization is Bantunium Labs, a non-profit accelerator focused on pre-revenue black-owned startups. Goodie Nation is a social impact pre-accelerator leveraging an innovative process to help service underserved communities globally. Furthermore, the VC firm Valor Ventures and young professionals club The Gathering Spot, together, host Startup Runway, which serves as a pitch series for minority founders.
As fore-mentioned, Atlanta is dedicated to designing and implementing a plethora of programs and initiatives focused primarily on women, who account for only 4% of the nation's business revenues (a share that has remained steady for 20 years).
Besides the given Women's Entrepreneurship Initiative, there present other well-known programs such as LaunchPad 2X, one founded by former military and corporate professional Bernie Dixon that works with women CEOs to offer the essential tools to ignite success as business leaders. Particularly, "we take them from everything from accounting to IP to learning about different business strategies such as negotiating," says Sheyda Mehrara, former Executive Director of LaunchPad2X and of the angel investing organization Atlanta Technology Angels. Ellevate Network is yet another invaluable resource; such a prestigious international network of women aims to bring more women into the economic fold.
Additionally, growing companies are attracted to Atlanta for the diverse economic climate and the strong array of industries ranging from life sciences and financial technology to health care and manufacturing. Lee Echols, Vice President of Marketing and Communications at Northside Hospital in Atlanta, stated, "Atlanta's diversity of industries is a significant advantage. While we feel economic effects like any other area, Atlanta's broad range of businesses somewhat protects us when a single industry dip."
All things considered, this fantastic city undoubtedly emerges as a melting pot of individuals from different races, ethnicities, cultures, and backgrounds, which tremendously strives to foster the economic impact of women within the entrepreneurship scene.
#4. Atlanta's Venture Capital Landscape
Traditionally, venture capital funding in Atlanta was, to some extent, conservative, with a focus on later-stage ventures or ideas that were considered immediate wins. Besides, smaller industries - like life sciences - lack established funds altogether. As regards Atlanta's venture capital sphere, Sig Mosley, the Managing Partner of Atlanta-based Mosley Ventures - The Godfather of Angel Investing – once commented, "A great idea will get funded. A good idea might not get funded."
Despite such a wanting landscape, over the recent years, Atlanta has started to "dance to a new beat" since new waves of entrepreneurs, who have established successful companies, are investing their money where the groundbreaking and avant-garde ideas are.
"You're seeing these pockets of people that have been successful and have been Atlanta-based. They want to make their returns, and they see that it's here. Fast-forward a year, and we're going to see this unfold as more and more companies getting funded," shared Lauren Weiniger, Co-Founder and CEO of The Safe Group, and also Founder of Growth City Partners, a partnership model whose mission is to connect Atlanta entrepreneurs, investors, and influencers. These funds can be listed, such as TechSquare Capital of TechSquare Labs and Judge Ventures developed by serial entrepreneur Paul Judge, or Switchyards Downtown Club by Michael Tavani.
Besides these two given exemplars, Valor Ventures, started by Lisa Calhoun after the flying success with her Atlanta-based marketing agency Write2Market, stands as another role model of an entrepreneur giving back to the Atlanta community. Entrepreneur David Cummings – founder of Atlanta Tech Village – is also an investor in this VC firm. Other power players within the Atlanta-based venture capital landscape do include CTW Venture Partners, Fulcrum Equity Partners, Atlanta Technology Angels, Tech Operators, Noro-Moseley Partners, and the Georgia Research Alliance, for research-based entrepreneurship.
"We invest in the seed to Series A stage," stated Raj Palaniswamy, Founder and Managing Partner of CTW Venture Partners, an early-stage venture capital fund that invests in and assists seed and early-stage entrepreneurs in all industries in Atlanta and the South Eastern United States. "We like to be the first investor in the company and partner with the technologist."
To take a deeper look, one of the highlights of the venture capital space in this city is Venture Atlanta, an annual conference where limited chosen companies from thousands of submissions are selected to pitch to investors. "They receive marketing, PR support, and invaluable coaching from CEOs and investors to help them refine their pitch and value proposition. Also, at the conference, we help facilitate one-on-one meetings between companies and investors," shared Allyson Eman, Executive Director of Venture Atlanta.
Having earned a reputation as a game-changing event, Venture Atlanta has helped to launch more than 350 companies and secure over $4.3 billion in funding by September 2019. "Venture Atlanta is the place where Southeast tech entrepreneurs gather to discover, connect, inspire and grow," said Dave Payne, managing director of Techstars Atlanta and Venture Atlanta board member. "The most powerful collective group of industry leaders, investors and founders, Venture Atlanta has become the main showcase for game-changing innovation and technologies poised for massive growth."
After all, such events as Venture Atlanta and the emergence of Atlanta-based entrepreneurial success stories are making a contribution to disrupt and turn the tide of the landscape of venture capital funding, which was traditionally deemed as more risk-averse relative to major entrepreneurial hubs.
The Bottom Line
As noted by Aaron Hillegass, CEO of Big Nerd Ranch, Atlanta-based app development and design consultancy and training company, "Silicon Valley does not have a monopoly on money or talent. Sustainable entrepreneurship requires people with a deep understanding of real problems, enough education to create a solution to that problem, and enough money to get that solution to market. Atlanta has all these things, while also offering a low cost of living and diversity in terms of race, income, and education."
A perfect storm of favorable business climate with a diverse, inclusive and supportive entrepreneurial culture is forming over Georgia's capital and largest city, Atlanta. As more momentum builds in the "heart of the southeast," there exist thousands of sound reasons, for you, as a passionate entrepreneur, to consider calling Atlanta home.
SUBSCRIBE FOR THREE TIPS
Three tips or links to improve small business presence every week.
P.S.: This is your “University” to solve small business challenges.