Growing Pains: How Miami's Startup Community Will Scale

 

Miami is a teenager with a mustache. Anyone who’s been in a meeting with me knows how I feel about metaphors, and talking about our city is no exception. By this particular one, I mean that we are still an adolescent – with all of the awkward growth spurts and opportunities that entails – looking to show up at the bar, order a drink, and be taken seriously. In other words, we as a city have to grow into our shoes.

 

The Kauffman Index of Entrepreneurial Activity has consistently ranked Miami in the list of top cities for startup creation. At the same time, Florida ranked 34th out of 50 in The Bloomberg U.S. Innovation Index just last year. Endeavor Miami often cites the fact that Miami leads the country in number of micro-businesses per capita, but consistently drop in the rankings when it comes to topics such as scaling and funding businesses. These are the contradictions inherent in adolescence.

 

On the former of these topics, we often end up with a classic chicken-or-egg paradigm. We need more investments in our startup companies in order to drive the ecosystem forward, but we need a robust ecosystem to attract eager investment funds. As in most things, success begets success, so investors from elsewhere in the country are looking for our local investors to set the tone, show the traction, and put their money behind companies they trust. This is even more relevant when one considers that investors are generally more likely – although certainly not restricted – to invest within their geographic proximity. Bay area venture capitalists are infamous for quipping that they prefer to invest in companies they can drive to for lunch.

 

All of this dovetails to the conclusion that local investors – their presence and their engagement, not just their money – matters to the narrative of our city’s growth.

 

Currently, being a startup investor in Miami is a bit like being the chess champion in middle school, a tiny bit lonely. Although the community has grown in recent years and with increasing momentum, we can still count the number of active angel investment groups with one set of hands. Similarly, although Richard Florida has continuously cited that South Florida (no relation) has one of the highest ratios of wealth per capita in the country, we know those funds are infrequently deployed towards startup investment. Often, they are not invested at all, invested in more traditional high-yield projects such as real estate, or, ironically, invested in startups outside of the state.

 

Out of this sequence of logic, Aminta Ventures was born.

 

We understand that the size and dynamism of our local investment community is crucial in driving the growth of our own companies as well as attracting investments from elsewhere. We also realize that we live in a region where assets remain untapped for early stage and more high-risk deployment, so we set out to solve this puzzle.

 

In this context, women seemed like a forgotten segment. When looking at lists of angel investors in Miami, you have to scroll pretty far to find a woman. (Go ahead, try it.) It is interesting, because women are thriving and leading in every sector of our city’s universe, growing into leadership roles and establishing their own businesses at admirable rates. We wondered, where’s the disconnect, and why are these women not showing up on the other side of the investment table?

 

Similarly, philanthropists and community activists about angel investment felt like a gap worth bridging. At its core, angel investing is not just about generating profit, it is also community-focused. Indisputably, it comes with a higher risk, but this is in part balanced by the reward of fomenting and increasing the churn of entrepreneurial activity, business ownership, and company growth in a given city. And so we also asked, where’s the disconnect, and why aren’t philanthropists considering angel investing as a diversification of their community impact portfolio?

 

These are the questions motivating us. As we look out at Miami’s rapidly changing entrepreneurship landscape, we look forward to testing our hypotheses and creating more pathways for investor engagement and growth in our city.

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April 25, 2017

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Miami, FL 33136

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