A look at the assets offered by USA startup ecosystem for young startups

USA has been a dominant startup ecosystem for decades. With 64.7% billion dollar startups share, it is the leading startup ecosystem of globe. The country has around 23,444 startups and according to the Global Ecosystem Report by Startup Genome, six out of the top 10 global ecosystems are from the USA alone. Silicon Valley is numbered as the leading startup ecosystem across the globe and  New York City, Boston, Los Angeles and Seattle are also among the top 10 global startup ecosystems. But what makes the USA startup ecosystem the right ground for startups? Let’s find out!

When it comes to a startup ecosystem, it is never an individual entity. It consists of people involved, the various startups in different stages and also the many types of organizations in a place (both physical and virtual) that interact together as a system to creating and scaling new startups. And the case is the same for the USA as well. The country of 50 states nourishes the startups with the right seeds, sunlight and water to grow as the huge trees of remarkable brands.

There are many factors that make the USA secure the foremost position in the startup ecosystem. These are the  venture capitals, incubators, startup pitch competitions, government schemes and a lot many other minor yet important ones like the cost, workforce etc. Let us take a look into a few of major factors that contribute to the USA startup ecosystem:

Venture Capitals in USA

When it comes to starting a new business, it needs not just an idea to get started; you need funding and the right strategy that can keep you growing. A venture capital provides committed and long term share capital for helping the companies succeed. According to the National Venture Capital Association, around 1000 venture capitals are operating in the USA. Here are few of the top VCs in USA contributing to USA startup ecosystem:

The business incubators in USA

A startup incubator is designed to help the businesses by supplying them with workspace, mentoring, training and seed funding and is essential element of USA startup ecosystem. According to the Business Innovation Association, there are around 1,000 business incubators operating in the USA. Some of the major incubators of USA are:

Startup Pitch Competitions in USA to aim for

A Startup Pitch Competition may be the only way for your business to land where it’s supposed to. And when it comes to delivering a suitable startup ecosystem, these are as essential as any other motivating element like funding and USA startup ecosystem is again active for this. With a startup pitch competition, you can pitch many investors, gain valuable exposures and get valuable feedback. Building partnerships is a primary factor, but more importantly you can get an opportunity to fuel your business and secure funding. Here are a few startup pitch competitions, startups can aim in USA:

1. Code Launch 2020

CodeLaunch was founded by Code Authority in 2012 for accelerating the finest startups by providing them seed services vendors — from various allocated product development teams and get coaching by business professionals.

Location: Frisco, Texas, USA

Date: 

• Date of application for Code Launch VIII: March 1st and May 31st. 
• CodeLaunch Startup Expo: August (the five finalists will pitch their startup idea in front of judges and investors)

Cost: Free of Cost

Focused Industry: Software tech

Amount to win: Seed services worth more than US$ 67k.

2. MIT $100K 2020

This startup is for the MIT students who have an amazing idea. The three-fold MIT $100K Entrepreneurship Competition will provide you the chance to prove your idea in front of an influential crowd and to get access to a powerhouse of network and resources. The three stages are pitch, accelerate and Launch. 

Location: Cambridge, Massachusetts, USA

Date: Yet to be determined. 

• Pitch stage takes place in October. For the Accelerate stage, the applications are open till 13^th January as the event will be held 12^th February.

Cost: Free of Cost but it is open for just MIT students and the ones working with them

Industry focus: Technology but with broad domain

Amount to win:  PITCH stage: US$5,000, Accelerate stage: US$10,000, Final Launch stage: US$100,000

3. Startup World Cup 2020

The Startup World Cup (SWC) startup pitch competition powered by Fenox Venture Capital consists of more than 40 regional events which contribute to the main Grand Finale event that is organized in Silicon Valley. The finalists can win one million US$ investment and they event attendees can network with top and experienced industry players. 

Location: San Francisco, California, USA

Date: 17^th May

Cost: The regional events are free to apply, the tickets to attend the competition is between US$ 80 to US$ 399.

Industry focus:  Improving lives and transforming domains, like healthcare, AI, robotics, transportation, Fintech, IoT and augmented reality.

Amount to win: €1,000,000 investment

4. Arch Grants Competition

The Arch Grants is aimed for innovating the St. Louis region with economic development and entrepreneurship. The participants have a chance to fetch everything they need for relocating their business to St. Louis.

Location: St. Louis, Missouri, USA

Date: The interested people can apply from 1^st February to 15^th April. The final Pitch Day is organized in August

Cost: Free of cost — but the business should be willing to be relocated to St. Louis 

Industry focus: Broad domain, but with main focus to support the economy of St. Louis.

Amount to win: US$50,000 equity-free cash grant 

5. U.Pitch 2020

This is an elevator pitch competition aimed particularly for college students. To attend this competition, you need to be currently enrolled as a student or have to be graduated within the past six months. 

Location: Chicago, Illinois, USA.

Date: Yet to be announced, the applications are open in autumn 

Cost: Free of cost

Industry focus: Broad domain

Amount to win:  US$10,000

The government initiatives for startups in USA

There are several government supported loans and funding schemes supported by USA government for the businesses that fuel the USA startup ecosystem. There are three options for the same:

Small Business Financing

The government loan services provide financial support for the new businesses or those who intend to scale their business. The following government assets and services can help startups find a loan to suit the business needs of enterprise: 

No federal grants for the startups

The federal government does not provide any grants for supporting, starting or growing a business. It only offers grants for nonprofit and educational organizations. These organizations should be mainly focused on medicine, technological development, and a few other fields. 

Some of the state programs and local ones offer company grants. They usually need to match the funds. Or, can expect you to merge the grant with some other financing form like loan. 

Other options to fund your business in USA

There are two federal and state programs available that can help your business secure investment:

Small Business Investment Company or the SBIC – The SBA establishes partnerships with other private financing funds as Small Business Investment Company and provides growth capital for SMEs. 

Small Business Innovation Research or the SBIR and Small Business Technology Transfer or the STTR Programs – These are award based and competitive based programs. This is to encourage federal R&D projects. 

You can also read Understanding taxation for startups in US to know aspects of taxation for startups in the US. 

Emerging startup ecosystems in USA

In the earlier times, Silicon Valley was the only significant startup ecosystem that the USA had but with time and development this picture is changed. There are many metro areas that provide growing infrastructure and skilled workforces to support tech startups. Increasingly, these areas are regularly having their positions of best cities in the USA for startups and entrepreneurs. The best part about here is that these new centers are better in terms of affordability than East Coast or Silicon Valley. 

These six mid sized cities of USA are growing into future startup hubs and have shown great potential to be the right startup ecosystem:

Springfield (MA) 

The small businesses within the capital city of Illinois have evolved with its inception, and the place is recognized to be one of the best places to start a small business or startup. The startups launched in Springfield (MA) make sales in the global markets at an astonishingly good rate. 

The history of Springfield in SMEs comes from humble initiation in fur business, comprehensive industrial development advanced with harnessing the Connecticut River and global skills in metal fabrication.

Albuquerque 

Albuquerque gets great supportive local cultures. Manageable rents, glutted markets, and investors seeking real-world profitability are bringing startups to startup-friendly cities like Albuquerque. With startup space growth, comes SME sector growth in general and this has made the world see the potential that Albuquerque has to be the budding startup ecosystem.

Besides, other factors that contribute to the startup friendly environment of the city are its affordability, business benefits from international support, and its coworking and innovation places. 

New Orleans 

The city of New Orleans has both culture and affordability to offer to the startups. The city was also named recently in the hottest startup hubs of America, and this is for a reason. One of the crucial factors responsible to foster the growth of any new startup is an incubator ecosystem and resource-rich space that aids the ventures to get started.

New Orleans is striking for new companies as the labor costs in the city are way lesser than in prime cities like New York or Los Angeles. It also offers considerable tax relaxations, like 25% to 35% incentive for all the digital media companies.  

Reno 

Reno is also among one of the cities identified for having the potential to be a startup ecosystem. One third of the startup founders in Reno are female. Every year a good number of engineers graduate from University of Nevada, Reno that provides the workforce for local startups. The out of state hires who want a flexible ecosystem and affordable housing add in to Reno’s growth. 14% of the startups in Reno are moved from other cities, which will majorly die to lower the cost of operating business. 

Fresno 

Fresno has all the requirements for developing a strong startup ecosystem. There are some prime reasons for it, like the city welcomes outsiders and around one third entrepreneurs are from the other places, the city also has the average collision score higher than the global average. Other than this other feasible reasons to make Fresno a startup ecosystem are invested experts and the place to grow. 

Hartford 

Hartford is attracting startups from all over the world. Several startup initiatives, events and resources are available for the startups that they can engage with. The city ranks fourth in the country for the number of female entrepreneurs. As the city claims itself to be “Insurance Capital of the World,” many international insurance technology companies also showed their interest for its workspace. The place has a potential and need for the ecosystems as they are growing as they grow in the domain.

The startup ecosystems are essential not just for the business aspects like improved investment opportunities, business growth, better sales, profit etc. but also for the economic growth of the region as well. And the USA is rightly the leading startup ecosystem in all of these aspects.

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