Angel View: Four Reasons Why Start-ups Should Consider Cincinnati
One does not have to look very far or search very hard to find news about why Cincinnati is a great place to start a business. Reporters and writers from national publications are touting the great resources in the city while start-up founders attracted to local accelerators and incubators in the city craft blogs with an almost incredulous tone about everything from the cost of rent to the availability of funding. It’s almost as if they have discovered something that they are unsure whether they are allowed to say anything or not. What they are discovering is a city and a community that are really excited about ideas and innovations, and wants to be perceived as not only the home of P&G, Macy’s and GE Aviation, but also a place for the next big thing in consumer products and analytics software. There is a general understanding that if businesses are successful here than the entire region benefits.
A year ago, Rodrigo Galindez brought his start-up Keego from New York to Cincinnati to join The Brandery. On his Medium page, he crafted a blog titled, "Why Cincinnati Matters for Startups." In it, he wrote,
"Building a startup is one of the hardest things you will do in your life, but these folks make things easier. You are not alone here, and everybody will make sure you are part of the family from day one."1
This is reason number one to select Cincinnati, a Midwest mindset.
Simply put, in the Midwest, we think a little bit differently than the coasts. We don’t see a start-up as one of thousands. We are welcoming, and we want entrepreneurs to be successful. Afterall, Cincinnati is listed among America’s most livable cities, best city to relocate to, best cities in U.S. for post-grads and best cities to raise a family. We want you here, and everyone is working to make it a great place to live and work. It’s not really a secret, but it may be a surprise.
Alex Bowman, co-founder of Casamatic wrote in a July 2014 blog about why he moved back to the city, "There is a growing startup scene that supports each other. I am constantly amazed at the support that startup receive in Cincinnati, from investors, resources, events and other startups."ii
This brings me to reason number two, a growing start-up infrastructure.
Queen City Angels, CincyTech, Cintrifuse, The Brandery, Bad Girl Ventures… these are just a few of the resources eager to assist entrepreneurs in their start-up journey. Sean Grace, a marketing professional in Cincinnati called it an “Entrepreneur-Friendly Environment” in a Techli blog.iii
"Entrepreneurial activity is quickly becoming a defining feature of Cincinnati. This is due to many different pieces all working together to create a cohesive set of advantages."
Cincinnati is home to 10 Fortune 500 companies, and while those same businesses have defined this region for decades, they are the same organizations rallying behind the entrepreneur movement, supporting the accelerator programs, providing executive leadership and mentoring, and investing money.
Capital is reason number three why entrepreneurs should consider Cincinnati.
Most articles and blog posts about Cincinnati’s capital resources, or any Midwest city for that matter, start off by comparing it the money available to businesses in Silicon Valley, Boston or New York. It’s not a fair or appropriate comparison. For one, Cincinnati is not trying to be like San Francisco or Chicago. We don’t have to be. It doesn’t cost as much to live here or build a business, and there are significant capital resources available to young companies.
A January 2015 Huffington Post article stated, "Cincinnati lays claim to a growing and vibrant startup ecosystem. Much of this success is due to what we are seeing across the United States with fewer barriers to entry, but the main part of Cincinnati’s success is due in large part to the venture funding access in the city."iv
Since launching in 2001, Queen City Angels has invested $50 million in nearly 80 portfolio companies, initiating more than $400 million in follow-on capital. CincyTech has invested $25 million in 54 portfolio companies resulting in $435 million in follow-on capital. The Brandery has helped raise $78 million for 45 companies, and Cintrifuse has a venture fund with more than $50 million to invest. River Cities Capital Fund has nearly $500 million under management and has made more than 100 investments, and since 1990, Blue Chip Venture Company has invested approximately $1 billion in more than 500 financing rounds of 170 portfolio companies.
These aren’t all the capital resources available, but it provides a partial view of what is available from seed stage to venture stage investments. Hundreds of local companies have benefited from the dollars, as well as the business guidance from executives and investors who know what it takes to start and build a successful business.
This brings me to reason number four… a growing list of successful start-ups. Whether it’s receiving capital to take the business to the next level or growing the business to the point of an exit, Cincinnati has a growing list of companies that are proving why Cincinnati is a great place to start a business.
AssureRx, ChoreMonster, The Business Backer, DotLoop, Everything But The House, Lisnr, iSqft, Ecolibrium Solar… these are just a few of the businesses with foundations in Cincinnati that have received local and national attention for their funding, acquisitions and/or growth. Cincinnati played a role in each of their success stories, and the list will continue to grow driven by a city and community that has rallied around the startup scene; an emerging startup infrastructure with people and organizations that are eager to help; and angels and venture capital investors that provide support beyond the capital resources.
Obviously, there are more reasons to come to Cincinnati, from a successful urban renewal plan, and creative talent, to top-notch universities and an emerging art and restaurant scene. Honestly, our entrepreneur environment is relatively young, and we have a lot of room to grow. But if there is something we are good at in the Midwest, it’s building stuff, and we are off to a pretty good start.