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While Silicon Valley and New York City might sound like the perfect places to base your startup, exorbitant rental and living costs are putting off many first time entrepreneurs. Now a handful of new tech hubs have popped up across the country, and they’re offering incentives to entice startups.

Buffalo, New Orleans, Nashville, and Pittsburgh have all transformed themselves into tech hubs, and they’ve shown they have what it takes to push startups forward, too. So what incentives are these cities offering startups to draw them in? And why may they be good places for your startup to call home?

Buffalo: A tech competition with the world’s largest cash prize

How does a midsized city put itself on the map as a destination for startups? By offering startups a lot of money, mentors, and resources – like Buffalo has done.

Buffalo hosts the world’s largest business idea competition, 43North. In total, the competition awards businesses with $5 million in prizes–the top prize is $1 million. Startups also receive mentorship and access to incubator space but must stay to run their businesses in Buffalo for one year. And since Buffalo is in NY, winning startups also get to take advantage of Start-up NY. It’s a program that offers expanding businesses the chance to run tax-free in the state for 10 years. The competition and support for entrepreneurship arose out of the Buffalo Billion, a $1 billion investment Governor Andrew Cuomo committed to the Buffalo area in 2012 to push forward economic development.

Buffalo has come a long way out of economic downturn, and residents are excited about the newfound growth as a startup hub. They want to see the city succeed, and collaborate to do it. In April, local leaders from economic development agencies and large companies sent senior level representatives to the Collision conference in New Orleans to support entrepreneurs from Buffalo pitching in the national competition. Altogether the Buffalo contingency numbered about 40 people and helped to make a statement about how the city is committed to growing its entrepreneurial ecosystem.

Pittsburgh: Access to top talent

The Pittsburgh area is home to about 40 colleges and universities, but there are two that really stand out in regards to tech talent: The University of Pittsburgh, and Carnegie Mellon University. University of Pittsburgh is known for its biological and health sciences programs, as well as its programs in engineering and nanoscience. Carnegie Mellon University, on the other hand, boasts a leading School of Computer Science — it’s currently tied with MIT, Stanford, and University of California, Berkeley for the number one spot.

Right now, Apple occupies 12,000 feet of space on the university’s campus, but it leased out further space in another area of the city to expand its presence. Google, Disney, Dell, Intel, and Uber all have situated themselves in Pittsburgh too, with an aim to access the city’s talent.

To support the talent emerging from the universities, there are a few government initiatives in place. The Ben Franklin Technology Partners is a state-program that started in the 1980s and provides early-stage and more advanced companies with funding, expertise, and access to networks and resources. Keystone Innovation Zone is another state initiative; it provides companies that are less than eight years old with tax credits and has a pool of $25 million in credits available.

Nashville: A center for music and healthcare

Nashville’s economy is driven by music and healthcare. The music industry has an impact of $10 billion on the city each year, and the healthcare industry quadruples that at $38 billion. So effectively, Nashville is a good place for healthcare and music startups to call home.

A huge resource for startups in Nashville is the Nashville Entrepreneur Center. This nonprofit aims to help new businesses thrive in the city and is one of only nine Google for Entrepreneurs Tech Hubs in the country.

One initiative out of the center is Project Healthcare. Launched this year, the program provides year-round support for healthcare entrepreneurs by giving them access to coaches, connecting them with the community, and providing capital resources. The programs caps off with a 14-week accelerator. Project Music offers similar resources to music startups but includes a three-month accelerator program to immerse startups in the music industry.

The Nashville Entrepreneur Center is partially funded by Launch Tennessee (LaunchTN), a public-private partnership focused on helping entrepreneurs throughout Tennessee to grow their businesses. LaunchTN oversees nine accelerators across the state but also manages the INCITE Co-Investment Fund, which matches a portion of investments for companies in Tennessee. So entrepreneurs in Tennessee, and particularly Nashville, receive their fair share of government support.

What’s more, in 2016 Nashville was named the top city for new tech grads, citing its networking opportunities and more collaborative nature. There are dozens of tech meetup groups within the city, such as NashJS, Nashville Mobile Development User Group, and Python. Most boast high membership numbers, proving that Nashville has no lack for tech talent.

New Orleans: A revived entrepreneurial spirit

Hurricane Katrina devastated New Orleans’ tech scene, as it did all industries in the city. But residents of New Orleans have certainly built back entrepreneurial momentum. In fact, the number of startups per capita in New Orleans is 54 percent higher than the national average.

And there’s proof that the New Orleans tech scene is growing even further. In 2015, New Orleans Entrepreneur week saw over 10,000 founders and investors in attendance, the most it has ever had. New Orleans also hosts Collision, a conference launched by the team that created Web Summit. After just two years, the conference has 7,500 attendees.

In terms of resources, the city offers its entrepreneurs a few. There’s the New Orleans Startup Fund, a nonprofit focused on accelerating early-stage companies looking for capital in the Greater New Orleans region.

There’s also Propeller, which offers an incubator, an accelerator, and host events for startups launching social ventures in the city, which a decade after Katrina is certainly still important: 39 percent of children live in poverty, far above the national average.

New Orleans is a city on the mend, but also on the rise. Just ask General Electric: It opened the GE Capital Technology Center in 2012 and has since brought about 300 IT positions to the city, furthering New Orleans’ reputation as a tech hub.

It makes sense that entrepreneurs want to base their companies in Silicon Valley or New York City because of the infrastructure and resources they offer startups. But now smaller startup hubs are beginning to offer these things too. They provide startups a solid testing ground with access to outside resources and networks, with financial incentives, and with a lower cost of living. It all means that if you choose to leave Silicon Valley, you’re not headed out into the cold.

Patrick Finan is the founder of Loupe, an app that gets you perks at local restaurants. Loupe is headquartered in Buffalo, NY.


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