Over the past 10 years, we have invested in seed, traction and growth-stage companies while participating in the maturation of the region’s startup ecosystem. Given this background and history, we saw an opportunity to consolidate our learnings in a way that could benefit the entire region.
When we set out to create our inaugural The State of Startups™ in the Southeast report—which delivers a comprehensive overview of the venture capital and startup ecosystem in nine states in this region of the country—we kept an open mind, not making assumptions about what we thought we would find. The report, which takes an in-depth look at startup activity from January 1, 2012, to August 31, 2017, reveals some things we thought were fairly obvious, for sure. But it also uncovered some surprising trends.
Importantly, the analysis confirms what many of us already knew: The amount of investment dollars in southeastern cities is rising.
The State of Startups™ in the Southeast goes into detail on our findings on a state-by-state basis, but I want to highlight some of the most notable observations that our research revealed:
- There is a definite maturation of the startup ecosystem in the Southeast, particularly in Georgia.
- Atlanta, Miami, Nashville, Northern Virginia and Research Triangle are emerging as market-leading tech innovation hubs.
- Florida, North Carolina and Georgia lead southeastern states with respect to deal activity and total investment dollars.
On a state-by-state basis, some notable trends and observations that came out of our research:
- Florida continues to be a southeastern powerhouse in startup funding.
- The number of deals funded in Georgia has decreased in recent years, as has the amount of dollars invested. Investors seem to be pulling back a little while at the same time investing in more mature businesses, rather than early stage ones.
- 2017 is on track to be one of North Carolina’s best years yet in terms of dollars invested in innovation. Most of these dollars are going into the Biotech and Pharma sectors.
- On the contrary, 2017 is on track to come in quite a bit lower for Tennessee, in terms of deal activity and total dollars invested.
Utilizing gathered intelligence and taking investment trends—both individually and aggregate—into account, we were able to make some educated assumptions regarding what to expect to see in the coming months and years. Based on the analysis of historical data and interviews with various market participants, the investment and startup community in the southeast likely can expect:
- The continued democratization of the venture capital asset class as retail investors increase their allocations to private market investment opportunities.
- The increasing role of artificial intelligence, big data and technologies that improve workflow as the U.S. Healthcare sector continues to deconstruct and rebuild.
- National recognition of Atlanta as a market-leading innovation hub.
We invite you to read The State of Startups™ in the Southeast eBook in its entirety here, to dig deeper into the numbers and read more about notable trends. Additionally, we welcome your feedback regarding what you might like to see in future versions. We hope this report, which we plan to issue annually, will further educate investors in the venture capital space on the emerging trends to watch as well as highlight the area’s growth
and future opportunities. The Southeast holds great value for investors looking for access to great ideas and opportunities. It’s not just all about San Francisco and Boston anymore and we want to be sure everyone knows that.