Fostering Innovation: The Southern Startup Scene's Growth

With the startup landscape evolving rapidly, attention is increasingly turning towards the South, where a rising entrepreneurial ecosystem is reshaping the region's economic landscape. As noted in a recent article on Carta's blog, the Southern startup scene is experiencing unprecedented growth, fueled by a convergence of factors ranging from access to talent and supportive business environments to favorable economic conditions. This surge in startup activity is not only attracting attention from investors but also positioning cities like Atlanta, Nashville, and Austin as dynamic hubs for innovation and entrepreneurship.

The South presents an enticing opportunity for startups looking to establish or expand their operations.

With the largest and fastest-growing population among the four U.S. regions, the South offers a broad customer base and talent pool fueled by continuous migration.

The region's economic potential is on the rise, with its contribution to the U.S. GDP now surpassing that of the Northeast. Despite this growth, the South still receives a smaller share of venture capital compared to coastal regions, presenting an untapped opportunity for startups to access funding in a less saturated market.

In 2008, despite its unexpectedness, Lynne Laube and her co-founders recognized Atlanta's promise for their startup. They were drawn to the city's proximity to tech talent and its appealing cost of living, leading them to choose Atlanta as the ideal location for their fintech venture, Cardlytics.

“There’s as much talent in the South as anywhere else,” Lynne Laube of Cardlytics says. “There’s just a lot less money.” 

“I know we created a lot of wealthy people in Atlanta. Many of them are now working for local startups, some of them are working for funds, and some of them are coaching local startups like I am doing,” Laube says. “Money follows talent. And that’s what we’re seeing happen.”

The Southern startup markets, though unique, are part of a larger ecosystem characterized by cooperation and regional innovation. Lisa Calhoun is the founding managing partner of Valor Ventures, where Laube now works. Calhoun emphasizes this collaborative spirit, which distinguishes the South's approach to entrepreneurship. As the ecosystem evolves, the need for early-stage funding grows, historically lacking in the South. However, with more companies achieving exits, the region is seeing a rise in potential angel investors, signaling promising opportunities for startups. 

The wealth of talent emanating from esteemed universities, varied industries, and a thriving entrepreneurial culture bolsters the argument for startups to explore opportunities in the South. Add to this the lower cost of living compared to tech hubs like Silicon Valley and the supportive ecosystems provided by organizations like Atlanta Tech Village and the Nashville Entrepreneur Center, and it becomes clear why the South is becoming an increasingly attractive destination for startups seeking growth and success.