Editor’s note: This is a sidebar to the four-part series WRAL Techwire is running on the Charlotte startup and entrepreneurial scene. The first report to systematically examine the Charlotte’s entrepreneurial ecosystem surveyed 248 innovative, high growth ventures, but also identified a number of weaknesses for Queen City startups, ranging from a lack of funding to a fragmented support system.
CHARLOTTE—The 2015 Charlotte Entrepreneur Growth Report is the region’s first systematic evaluation of its high growth entrepreneurial scene and innovative ventures.It reveals both strengths and weaknesses the Queen City is attempting to address with a range of entrepreneurial focused organizations and activity this year.
New organizations such as StartCharlotte and HQ Charlotte, which is now managing the Packard Place co-working and meeting building uptown, are adressing many of these concerns, as is the Business, Innovation and Growth Council headed by Terry Cox, but it’s obvious the Queen City has some work to do in the entrepreneurial space.
Perhaps its most disturbing single metric is that new venture formation and job creation declined nationally and in Charlotte since 1980.
The four-part report surveyed 248 young, innovative metro Charlotte ventures and community residents to access “entrepreneurial support.”
It analyzed innovation and entrepreneurial metrics, comparing Charlotte to seven national benchmark markets and four other Carolina metros. Finally it profiled seven successful Charlotte area entrepreneurial companies.
Highlights from the report include:
- The survey of companies revealed substantial revenue and employment growth among ventures that compete effectively in national and global markets.
- Charlotte per capita overall startup activity is better than Kansas City and Nashville but worse than other benchmark metros (Atlanta, Austin, San Francisco, and Tampa).
- Investors are not attracted to Charlotte early stage ventures.
- Charlotte angels generally invest elsewhere due to lack of local quality deals. Charlotte Angel Fund Administrator Greg Brown said it has yet to invest in a Charlotte venture, but tells WRAL Techwire that may soon change.
- Charlotte’s visible angel investing is smaller scale than comparable activities in several nearby metros.
- Charlotte venture capital investment is shockingly low; on a per capita basis it is 1 percent of Austin results and less than 3 percent of Research Triangle investment.
- Charlotte’s innovation industries include 11 percent of total business establishments, pay compensation of $71,707 which is 48 percent above metro average and deliver 2013 employment growth of 7.5 percent which is over twice the overall growth.
- Companies founded in 2000-2015 (“young”) in innovation industries report rapid growth: 23 percent revenue growth in 2014, and expected 44 percent growth for 2015; 18 percent employment growth in 2014 and expected 23 percent growth for 2015.
- The 248 young innovative company survey respondents include many small firms but collectively are estimated to produce $1.3 billion 2015 revenue, similar to Piedmont Natural Gas or Coca Cola Bottling Consolidated.
- Charlotte’s innovation capacity substantially lags benchmark metros.
- Academic R&D funding of $40 million (FY2013) is a fraction of benchmark cities; at $17 per capital, it is about one-tenth of the lowest benchmark, Kansas City.
- When Austin’s Dell School of Medicine begins classes in 2016, Charlotte will be the only one of the seven national benchmark metros without a medical school.
- If Charlotte companies obtained venture capital at a rate similar to Atlanta, Charlotte metro companies would receive an additional $158 million of annual investment.
- The region’s non-profit entrepreneurial support organizations are small-scale and fragmented; 8 core organizations average 1.5 employees.
For part one of the Charlotte startup scene series see:
Part Two is here: https://wraltechwire.com/advice-to-charlotte-startups-go-after-mid-to-large-sized-companies/16129498/
Full Survey report