Florida's reputation as a top destination typically stems from its beaches, theme parks, and picturesque retirement communities attached to golf courses. In recent years, the state also has become a draw for entrepreneurs seeking a different type of getaway--escape from competitive startup environments, high housing costs, and income taxes.
Among those entrepreneurs was Erik Maltais, the co-founder of Immertec. While he built his virtual reality surgical training company in Tampa, he traveled to San Francisco in 2017 with the hopes of fundraising within the Silicon Valley tech community. Investors were keen to work with him in California, but they told him he'd have to set up shop there. He started to reconsider his home state and assess how Florida's lower cost of living might actually help his company thrive.
"We decided to come back because of how much further we could get with even less money," Maltais says.
Here's what you need to know about starting up in or relocating a business to Florida.
1. Talent shortages remain a constant struggle.
Although Florida's population grew 14.2 percent, about 2.67 million people, between April 2010 and July 2019, according to the U.S. Census Bureau, local founders say filling senior or more experienced roles can be difficult, depending on the industry. That forces many founders to recruit from out of state, says Suneera Madhani, founder of Orlando-based payment processing technology provider Fattmerchant (ranked No. 217 on the 2019 Inc. 5000). The company has hired about 20 employees from out of state.
2. Your money goes further.
One of the key benefits of Florida is its lack of income tax. That can serve as an incentive for would-be founders, as well as a point of leverage when trying to recruit out-of-state talent. Additionally, housing prices remain far lower than in other startup hubs. The median home value in Miami--one of the most expensive cities in Florida--is $366,519, about $1 million less than the median home value in San Francisco, according to online real estate database Zillow.
3. Major funding rounds and exits offer credibility.
Newly minted unicorns like Miami-based parking management platform ParkJockey, which was valued at more than $1 billion after a fundraising round in 2018 and has since changed its name to REEF Technology, show that Florida-grown startups can attract major resources. Area startups lassoed $2.8 billion in venture funding last year, up from $1.8 billion a year earlier, according to data and research company PitchBook.
Notable exits are also encouraging investors and building the state's credibility as an ecosystem: Dania Beach-based pet retailer Chewy was acquired by PetSmart for $3.3 billion in 2017; Miami's HR and payroll software firm Ultimate Software sold to a private equity group for $11 billion in 2019; and Tampa's pharmacy benefits management company myMatrixx was acquired by Express Scripts Holding Company for $250 million in 2017. The hope is that founders will put resources back into the local environment, either by investing in other startups or founding new startups themselves.
4. Resources are pouring into the local economy.
Growing interest from high-profile entrepreneurs like Steve Case has boosted Florida's visibility. In 2019, the AOL co-founder and CEO of the Washington, D.C.-based venture capital firm Revolution took his Rise of the Rest road trip through the state. Rise of the Rest is a competition dedicated to funding startups in emerging U.S. markets. Maltais of Immertec was one of the program's 2019 honorees. Meanwhile, Tampa Bay Lightning owner Jeff Vinik announced in 2017 that, alongside Bill Gates's Cascade Investment, he would build a $3.5 billion development project in downtown Tampa. The project will include nine million square feet of new commercial, retail, hospitality, entertainment, and cultural spaces.
Clarification: This story was updated to reflect ParkJockey's new name, REEF Technology.