by Lucy Morris
It goes without saying that with successful startups comes the creation of new jobs and an improved economy. Take, for instance, the classics. Silicon Valley and New York. Known as tech hotspots, these cities have accounted for some of the biggest business launches in recent years, from social-networking giants Facebook and Twitter, to newer favorites like streaming service Netflix, online doctor appointment platform ZocDoc, and meal kit company Blue Apron, which was valued at $2 billion at the time of its initial public offering (IPO) in June.
The economic impact of these titan startups is staggering. Silicon Valley reports a 4.3% increase in the number of jobs created in just a year’s time, and a total of 19.6% since 2010, and New York has reportedly added 985,100 private sector jobs since 2011. Blue Apron alone employs 4,500 individuals, Netflix 4,700, and Facebook? More than 17,000.
However, with this kind of monstrous growth comes setbacks. Today, costs, competition, and barriers to entry in these larger cities are at an all-time high. More companies are fighting for the same resources, the same locations, not to mention – the same investment dollars.
As a result, new markets have been picking up steam as epicenters for startups. Call it the “goldilocks effect,” entrepreneurs have begun flocking to midsized cities for their low cost of living, their access to resources like incubators and advisors, and their affordable office space. But the biggest draw of these new markets? The availability of equity financing.
Named one of the best cities for startups by Forbes, over the last 30 years, Chattanooga has developed a strong, locally-focused financing ecosystem comprised of funding options for every stage of a company: seed and angel investing for the initial stages of a startup, venture capital (VC) for companies with scalable potential, and private equity and mezzanine capital for mature companies looking for further growth or acquisitions. Here’s what many of these local groups do, what they look for, and how our city benefits.