Austin has developed an ecosystem for entrepreneurship and innovation over the past few years – one that has steadily gained the interest of the venture capital community. In 2014 alone, over $1 billion in investment was raised by Austin-based businesses, and the city hasn’t slowed down since.
Yet numbers alone don’t capture the excitement of living and working in this developing innovation hub. What’s so special about Austin? A lot – and then some. Here are just five reasons why our southwestern city has it right when it comes to encouraging innovation and venture capital investment:
- Government incentives: There’s no doubt the State of Texas got it right when it introduced specific business incentives – a number set up to support companies setting up shop in the region or moving significant numbers of staff there. While we’ve seen many traditional companies using these incentives to establish back office support and customer response channels in Austin, others have used the incentives to establish entirely new businesses. Over time, the city has become a start-up hub for software and hardware companies, in addition to companies focused on biotech, health- tech, music and a wide variety of other industries.
- Low cost of living: There’s a lot that is special about being in the southwest, including the food, the climate and good weather. Compared to Silicon Valley, Austin’s cost of living is very low, while the state itself does not have corporate or personal income taxes. Many people who come to Austin never leave – which has had a big impact on innovation. Successful entrepreneurs who have led companies to big exits have continued to invest in other start- ps and innovative projects in the city.
- Community support for innovation and entrepreneurship: Austin has become a hub for smart people and savvy entrepreneurs. As a result, a number of accelerator and incubator programs have cropped up in the city to help new companies to grow. Innovate Austin – an organization focused on economic development related to technology and innovation – puts the number of start-up focused programs at 46. Entrepreneurs can learn from each other and from successful mentors who have been more than willing to give back to the community that supported their successes. The environment of collaboration and learning – from universities to community programs and corporate accelerators gives new innovators the confidence that if they need help, they will find it.
- Employees buying in to Austin: Austin’s start up community isn’t new anymore. In fact, many early employees in Austin’s start-up community are completely vested. Some companies even offering liquidity events to their employees – letting them leave with sufficient cash in their pockets to look at reinvesting in other opportunities or to consider starting something new themselves.
- Celebrating successes: Austin is a city that knows how to celebrate success and to market it to the world. Austin’s Chamber of Commerce in particular is a strong proponent of Austin’s rising star status when it comes to innovation and entrepreneurship. Recently, it announced in collaboration with South by Southwest Interactive the “A List” of Austin Start-ups, providing recognition for a wide range of start-up companies, including bitfusion.io – a company focused on speeding up technology applications, SpareFoot – an internet based company providing links to self-storage options, and Neogenis – a company focused on providing health products that maximize the use of dietary nitrates.