North Carolina is center stage today, not because we are an emerging economic powerhouse, but because the state legislature passed a law that prevents local governments from adding anti-discrimination protections for LGBT people or establishing a minimum wage beyond the state standard. We have already seen a significant impact on business, and regardless of your position on this thorny issue, that's something to care deeply about.
HB2 creates business friction for every growing company that chooses to call North Carolina home. Great leaders and great companies overcome business friction by making choices that place them in a position to succeed. Good government is supposed to support leaders in those decisions. The North Carolina legislature and Governor failed by adding instead of reducing business friction.
As a civic business leader, it's incumbent upon me to find areas where I can help remove business friction. At The Startup Factory (a seed investment business I operate with my partner Dave Neal), our mission is to create an environment where passionate and motivated founders can get started without many of the traditional obstacles that inhibit startup business growth.
Unfortunately, HB2 has made our job more difficult.
There are 2 constituents that make our business sing: entrepreneurs and investors. HB2 casts a shadow over both of these groups' decision to operate in North Carolina by fostering uncertainty.
TSF and North Carolina need the best entrepreneurs to operate in North Carolina. Over 40% of the entrepreneurs interested in working with us come from out of state and about 30% of our investments are companies that move here for our program..
Once our investments grow their business to a certain level they start to attract outside venture capital. This is critical to their development, and it is so important that we hired a full-time associate to help our founders secure funding from investors from Washington, DC, to New York City, to Silicon Valley.
Again, HB2 throws a wet blanket on investment opportunities and venture capital recruitment.
Lastly, a business grows through the addition of key hires. These new hires are the gas that makes the car run. RTP (Raleigh/Durham/Chapel Hill) is lucky and good enough to attract future employees from our local universities (UNC-Chapel Hill, NC State and Duke) and more experienced candidates who value the state's low cost of living, the progressive arts, food and music scene (represented by this week's Moogfest with a keynote from tech icon [& transperson] Martine Rothblatt), and the long-term business opportunities that our thriving ecosystem provides. Remove the feel-good upside, and the net yield for talented in-migration slows, compromising hiring activity across the full range of companies.
Let me quantify the kind of momentum HB2 is challenging. Downtown Durham hosts over 300 startup companies and 2,500 technology professionals and Raleigh is emerging and moving quickly toward the same footprint. The companies operating within the RTP region have collectively raised hundreds of millions of dollars in venture capital and seen over $1Billion in exits over the last few years.
This momentum here in RTP echoes across the state. Over the past year, The Startup Factory has expanded our scope to connect with hundreds of entrepreneurs throughout the state through our intensive startup boot camps. There are immediate and momentous opportunities outside of Silicon Valley to accelerate entrepreneurial economic development that embraces technology-oriented business. Our prediction, there will be no more than 3-5 metro clusters across the US that will position themselves in the top tier over the next 10 years.
I am an entrepreneur, investor, and community builder who operates in the RTP (Raleigh, Durham & Chapel Hill) metropolitan area of my adoptive home state of North Carolina for the last 11 years. I don't know much, but I know this much, North Carolina is a complicated place full of many contrasts. We are one part progressive and one part traditional, one part urban and one part rural, one part tomorrow and one part yesterday. But, tomorrow is here right now, and something's gotta give for North Carolina to fulfill its potential and be part of that top tier of entrepreneurial communities.