In order for cities to provide hospitable environments for businesses to grow, they need an array of benefits and resources for entrepreneurs.
Thanks to affordable fees, low corporate taxes, strong local university talent and a large network of CEOs and innovators, the city of Atlanta is becoming more and more competitive with other U.S. cities to be the best startup ecosystem it can be.
As a result, it recently was ranked the fifth-best city in the U.S. in which to launch a startup, according to a report by online data analysis platform Real Estate Witch. The city was behind Las Vegas, Salt Lake City, Orlando and Miami.
The list was based on criteria including business applications per 100,000 people in the last five years, employment growth in the last year, average annual income, LLC filing fees, incorporation filing fees, corporate tax rates, chief executives per 1,000 people, google trends and patents filed per 1,000 people in the last five years.
Atlanta’s LLC filing fees were $54 lower than the national average, its corporation filing fees were $35 lower than the national average and its marginal corporate tax rate was slightly lower than the national average of 7.04% at 6.39%.
The report also showed that over the last five years, Atlanta has had the second most business applications filed per 100,000 residents for an American city at 10,853. That puts it behind only Miami in that metric, which had 14,058 applications per 100,000 residents.
Atlanta also had employment growth of 5% last year compared to the national average of 3.9%, the fourth highest google rate of the search term “starting a business” and access to a network of CEOs and other innovators with 1.45 CEOs per 1,000 residents (2.1% higher than the national average).
Atlanta's tech industry has seen much of the benefits.
Following the opening of the Atlanta Tech Village along with the Venture Atlanta conference, which connects companies to capital throughout the Southeast, Atlanta has become one of the fastest-growing tech hubs in the nation.
Last year, Atlanta saw a record-breaking year for investment in its startup companies with 11 raising “mega deals” of over $80 million, and five reaching unicorn status, or valuations of over $1 billion.
“We’ve gone from having no seed funds to founders in our ecosystem having options,” said Michael Cohn, Managing Partner at Overline. “The seed-stage institutional funding gap that existed for a very long time has largely been closed.”
The city also gains an advantage for entrepreneurial talent from local universities including Emory University, Georgia State University and the Georgia Institute of Technology. Historically Black colleges such as Morehouse College and Spelman College give the city a pipeline for black-owned businesses from students who reinvest in the community after graduation.
Georgia Tech is also home to the business incubator Advanced Technology Development Center, which has launched over 190 startups since 1980. Successful graduates of ATDC include Salesloft and Playon! Sports.
Investment and business leaders in the area also point to Atlanta’s diversity as one of the city’s key assets that attract startup growth. For Lisa Calhoun, founding general partner at Valor Ventures, Atlanta’s diversity allows her firm to look more like America.
"Atlanta is one of the only cities where you can start a company with inclusion on the inside. In venture capital, it's legendary how few women and people of color are in the business,” said Calhoun. “Atlanta's business-forward culture makes [racial and gender workplace diversity] possible."
