The Real Deal

The Southeast: untapped capital of top performing entrepreneurs

By June 27, 2016 No Comments

Lots of people quote the 57% increase in the growth of $10-million-plus firms founded by women in the last 10 years, from a recent American Express study. This growth rate outpaces $10-million-plus firms founded by men by 47%.  Kauffman recently pointed out there’s a 35% higher return on investment by women-led privately held tech companies. Echoing that finding, First Round found last year that tech startups with female founders returned 63% greater value in a 10 year early-stage fund study. 

With numbers like that, investors are starting to pay close attention to how their own portfolios are balanced and if they have sufficient diversity in the portfolio.

The Southeast leads in women entrepreneurs & startups

According to US Census data, states with the fastest growth in the number of women-owned and minority firms over the past 17 years include:

+118% Georgia (#1 in the country)

+98%   Texas

+91%    North Carolina

+81%    Mississippi

Meanwhile, we are have some of the lowest rates in the country for venture capital investment and venture funds invested in diverse and minority entrepreneurs. Atlanta doesn’t even rank in the Top 20 metros for venture investment.

San Diego, Washington, Phoenix, and even Philly outrank us. There are 3,000 active VC firms in the U.S. Only 30 are here. Understandably with that layout, 97% of the funding for startups in Georgia comes from outside the region. That’s partly because only 1% of venture capital firms in the U.S. are here, and we get about 1% of the venture capital in the U.S.

One thing is clear: the Southeast and Southeastern investors are presented with a big opportunity. Helping navigate that is part of Valor’s mission and purpose.