Miami startups: How they stack up
In a 2013 report, the World Economic Forum identified what it called the “eight pillars of an entrepreneurial ecosystem.” Following are the pillars and how Miami stacks up:
- ACCESSIBLE MARKETS: Successful startups need consumers, businesses and governments to buy their products and services, and the Miami-Fort Lauderdale metro area, with an estimated 6.2 million people, has the seventh-largest population in the U.S. — a big market in its own right. South Florida’s proximity to Europe and Latin America also makes it a good place to do business internationally.
- HUMAN CAPITAL: Even the best startup ideas can fail without the right management and workforce. Historically, South Florida has struggled to attract the type of talent that tech companies crave, but that’s changing, says Sadek Wahba, founder and managing partner of global infrastructure investment company I Squared Capital, which moved its headquarters from New York to Miami in 2018.
Wahba, a Harvard alum, recalls a recent conversation he had with a young Harvard graduate who now works for a global management consulting firm in Miami. “He chose to come to Miami because he thinks it’s an up-and-coming place,” Wahba says. “You need more people like that.”
- FUNDING AND FINANCE: Despite the rise of non-traditional tech hubs, Silicon Valley and New York still take the lion’s share of venture capital funding. Attorney Jaret Davis, co-managing shareholder of Greenberg Traurig’s Miami office, says there’s a critical need in South Florida for later stage startup funding.
“Ironically, we have a wonderful problem,” Davis says. “We have the deal flow and the pipeline of serious startups, but we need more venture capital funds and growth equity funds that are willing to write larger checks and do those series B and higher rounds. Thankfully, we’re going in that direction.”
- SUPPORT SYSTEM: Refresh Miami, a non-profit networking organization that connects technology workers and entrepreneurs, was founded in 2006 and has since grown to more than 10,000 members. Today, Miami’s startup scene also includes an annual global tech conference (eMerge Americas), angel investor groups and a robust network of accelerators and incubators, coding boot camps, mentoring programs and co-working space. According to data firm Yardi Matrix, co-working space accounts for 2.7% of Miami’s office stock — the largest percentage among major U.S. metros.
- REGULATORY FRAMEWORK AND INFRASTRUCTURE: Compared to high-cost, high-tax cities like New York, Chicago and San Francisco, Miami is an affordable place to do business, but it needs better public transit and more housing for young and middle-income workers, Wahba says. “In New York, you have the subway, buses and cabs, so there is a very flexible system. If you go to Chicago, it’s the same thing,” he says. “You need to be able to serve all needs, not just those with higher incomes.”
- EDUCATION AND TRAINING: Educational attainment remains a challenge for South Florida. About 20% of the region’s working-age population has a bachelor’s degree, and another 11% has an advanced college degree, according to Census data. That puts South Florida ninth in educational attainment among the 10 largest U.S. metros, ahead of only Phoenix.
- MAJOR UNIVERSITIES AS CATALYSTS: Major research universities — and the talent they produce — are key to any global tech hub. The University of Miami, Florida International University and Florida Atlantic University all have startup accelerators and engineering schools that churn out tech talent. This fall, FIU’s College of Engineering and Computing launched a master’s degree in the internet of things — the technology that goes into smart cars, household appliances, medical devices and transportation infrastructure. “Each of the major universities and colleges down here realizes that their engineering schools and computer science programs have to be responsive to the marketplace,” Davis says.
- CULTURAL SUPPORT: Immigrant-rich Miami boasts one of the highest rates of entrepreneurship and small-business ownership in the U.S. The Wynwood arts district is popular with startups and young tech workers, and the number of local success stories is growing. Miami-based financial tech startup Pipe recently completed a $250-million funding round and is now valued at $2 billion. Pipe co-founder Harry Hurst moved from Los Angeles to Miami last year, opening an office in Wynwood.
Read more in Florida Trend's September issue.
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