Chattanooga among top cities for startups

Chattanooga among top cities for startups

April 28th, 2015 by Mitra Malek in Business Around the Region

Entrepreneurs at Gig Tank make proposals that incorporate the city's fiber optic network.

Entrepreneurs at Gig Tank make proposals that incorporate...

Photo by Angela Lewis Foster /Times Free Press.

Chattanooga ranks among the five best cities in the nation to start a business, according to WalletHub, a personal-finance social network.

Gig City ranks No. 4, to be exact, behind Shreveport, La.; Tulsa, Okla.; and Springfield, Mo.

"Chattanooga was an entrepreneurial wasteland seven years ago," said Charlie Brock, president and CEO of Launch Tennessee, a public-private partnership that supports development of high-growth companies in the state. "It's been a wonderful confluence of events, activities and people that have come together to make this one of the best places to start and grow a business."

Top 10

WalletHub analyzed the relative startup opportunities that exist in the 150 most populated U.S. cities. The top rated communities are:
1. Shreveport, La.
2. Tulsa, Okla.
3. Springfield, Mo.
4. Chattanooga
5. Jackson, Miss.
6. Sioux Falls, S.D.
7. Memphis
8. Augusta, Ga.
9. Greensboro, N.C.
10. Columbus, Ga.

Charlie Brock

Charlie Brock

Photo by Contributed Photo /Times Free Press.

Sharyn Moreland, director of Chattanooga State Community College's Small Business Development Center, is photographed in their offices at the Tennessee Small Business Development Center on Cherokee Boulevard.

Sharyn Moreland, director of Chattanooga State Community College's...

Photo by John Rawlston /Times Free Press.

The Volunteer State's Memphis came in at No. 7, and Nashville came in at No. 20.

"It's incredible that two Tennessee cities rank in the overall top 10," Brock said.

WalletHub crunched numbers related to about a dozen factors in the 150 most populated U.S. cities. It got data from government sources such as the U.S. Census Bureau and U.S. Bureau of Labor Statistics, as well as from resources such as Indeed.com and Thumbtack.

More specifically, it split its analysis into two buckets: "access to resources" and "general business environment."

Chattanooga ranked No. 2 for "access to resources." The four factors that led to that: access to financing, office space affordability, employee availability and median annual income.

"It is not surprising that Chattanooga ranks high," said Sharyn Moreland, managing director of the Tennessee Small Business Development Center. "There are many start-up and existing business support organizations that are very willing to help support small businesses."

Indeed, Chattanooga has a business incubator that houses about 70 startups and is home to The Company Lab business accelerator.

Several angel and venture funding groups are in the city too, including the Lamp Post Group, Swift- Wing Ventures and the Chattanooga Renaissance Fund, among others.

Many of those organizations and groups work together.

For example, Chattanooga Renaissance Fund last year gave six startups that graduated from Co.Lab's GigTank $15,000 each in seed money. During GigTank's first two years it also committed to help fund startups and did that by partnering with other investors.

Chattanooga Renaissance Fund saw "the makings of this entrepreneurial evolution happening" years ago, said fund partner David Belitz.

It formed in 2009 and started raising capital in 2010. It has $10.6 million of committed capital, though only part of that total has been invested so far, Belitz said.

The idea behind forming the fund, Belitz said, was to help Chattanooga's startup community grow, and that seemed more likely with an angel investor network.

Then there are the offerings that help startups day-to-day, Moreland pointed out.

"A number of small businesses have Web, digital marketing, HR, bookkeeping and other services that provide critical services for entrepreneurs," Moreland said.

Gigabit-speed Internet service became widely available in 2010, which has helped, too.

"One of the main factors is to have a lot of support mechanisms and a lot of mentoring and a lot of camaraderie," said Richard Becherer, the Clarence E. Harris Chair of Excellence in Business and Entrepreneurship at the University of Chattanooga.

UTC's business school offers entrepreneurship as both a major and minor for its bachelor's degree.

The Scenic City didn't rank quite as high specific to "general business environment," coming in at 65. For this, WalletHub considered nine factors including: five-year survival rate of businesses, length of average workday, corporate taxes, workforce education level and cost of living.

Contact staff writer Mitra Malek at mmalek@timesfreepress.com or 423-757-6406. Follow her on Twitter@MitraMalek.


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