By Jordan DeTar
Y’ALL. When I moved to Nashville a few years ago, it was the y’all that made it clear. It wasn’t the hot August sun, nor was it the cowboy boots or the abundance of sweet tea. It was the y’all that greeted me with seemingly every wave that signaled I had entered the South.
Funny enough, I’m originally from Maryland, which is just as much a part of the South as Tennessee according to the U.S. Census Bureau. I remember sitting in my freshman year dorm at Vanderbilt amusing myself as I tried to convince my friends from Georgia, Texas, and Louisiana that I was from the South — I even lived below the Mason-Dixon line! ‘True’ Southerners themselves, they weren’t having it. “Do you say y’all?” Never. “Do you wear cowboy boots?” I still don’t own a pair. “Do you crave sweet tea in the summertime?” I’ve always been more of a lemonade kind of girl. In their eyes, I wasn’t Southern. In fact, I wasn’t even Southern in my own eyes. That’s where this gets complicated. Where is the Southeast anyway?
ModernCapital’s mission is to expand venture capital sources for Southeast-based startup founders by increasing connectivity between major venture capital hubs (such as San Francisco, Los Angeles, and New York City) and the Southeast. But when we say the Southeast, what do we mean?
The American Association of Geographers defines the southeastern United States as Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, and West Virginia. The OSBO uses the same states, but includes Arkansas and Louisiana (Southeastern United States). While we want to highlight which area of the country we are focused on, we aren’t concerned with specific geography as much as this generally intriguing region that is experiencing significant economic booms, yet currently gaining relatively little attention from venture capitalists.
What characterizes the Southeast? Apart from the humid climate and charming Southern twang, the Southeast’s unique culture makes it a place where startups can thrive. Southern hospitality lends to an important sense of camaraderie that cultivates a mutually supportive environment between founders and investors. Further, the strong public-private collaboration across multiple industries spanning from clean energy to ag-tech to healthcare and more provides startups with the necessary infrastructure to get going. The Southeast’s relatively lower cost of living doesn’t hurt either, as budgets can stretch further, capital is more efficiently utilized, and talent is more easily retained. With an overall business-friendly environment, the Southeast boasts an atmosphere that has stimulated economic activity for decades and has the potential to promote extraordinary growth in the future.
Since the late 1900s, the Southeast’s economy has revealed itself to be the fasted growing of all regions in the U.S., and it is home to quite a multicultural group of people, fostering an environment of creative thinking and innovation. In the past forty years, the Southeast has emerged as a center for the service economy, manufacturing industry, the financial sector, and most intriguing to us — high technology companies. Further, research is flourishing in the region as the Southeast boasts the two largest research parks in the nation: Research Triangle Park in North Carolina and Cummins Research Park in Alabama, as well as additional prominent research and development institutions including the Virginia BioTechnology Research Park and NASA’s Marshall Space Flight Center in Alabama, among others. BIP Capital’s 2017 The State of Startups in the Southeast identifies an increase in startups and venture capital funds in the region, while real estate firm Cushman & Wakefield includes five Southeastern cities in their list of America’s 25 Leading High-Tech Metro Areas. Despite this growth, we know that most venture capital money is concentrated in just a few major hubs. And we want to change that.
Our ultimate goal is to #BuildinSE (translation: build in the Southeast). We have identified a problem in the fact that venture investors are going to and coming from the same few cities when there is an abundance of talented entrepreneurs living in every state across the U.S.
We see particular potential in this area of the country because while there exists a vast pool of talent in the Southeast, it has been largely untapped. We also believe a natural byproduct of introducing new capital sources will be increased diversity and inclusion in tech. While we may be focusing today on the Southeastern states listed above by promoting #BuildinSE, we are laying the foundation to transform venture capital in the Southeast and beyond.
Stay tuned for more posts relating to #BuildinSE, and have a great day, y’all!