Mar 16, 2016 - Things to Do

To compete, Charlotte venture capitalists are going to have to put their money where the startups are

The smell of entrepreneurship is alive and well in the Queen City. Evidenced by the growth of tech companies, co-working spaces, and the plethora of pitch competitions popping up, there’s no debating that the entrepreneurial community is growing.

Despite the apparent increase in startup talent and over 100 venture capital firms operating out of the state, why aren’t these firms spending money on startups in Charlotte? Comparatively, Raleigh, Atlanta, and Austin boast thriving markets with supportive venture capital dollars boosting local entrepreneurship.

Last year, several scathing reports and articles called out Charlotte for lagging behind in attracting venture capital dollars to the entrepreneurship community. To put this issue into perspective, a study commissioned in part by the City of Charlotte noted that from 2011-2015, only four Charlotte-based companies received venture capital funding annually for a total of $8 million or the equivalent of $3 per capita. Those are small potatoes compared to neighboring Atlanta which completed 55 deals for $391 million or $70 per capita; or Austin’s $312 per resident.


So what gives? Why aren’t local firms heavily investing in Charlotte’s current pool of startups?

For starters, despite the city being home to one of the largest banking hubs in America, the majority of the state’s top venture capital firms are concentrated in the Raleigh-Durham region, making funding for startups of all stages elusive in Charlotte. This matter of geography presents a challenge in Charlotte for retaining both talent and potential economic growth opportunities. Venture capital firms and startup tech companies are seeking out talented students funneling through the ranks of schools like Duke, North Carolina State University and Chapel Hill.

With Charlotte’s smaller student population and less prestigious engineering and computer science programs, the competition for talent against the Research Triangle is bleak.

Attracting additional resources and talent to Charlotte could also come down to the visibility of more success stories coming out of the city. BrewPublik, which received funding from new venture firm Sierra Maya 360, made headlines when the craft brewery delivery business was selected to sharpen their chops in San Francisco as a participant in 500 Startups — one of the top accelerator programs in the country. Businesses that graduate from that program typically go on to raise $1 million or more in Series A funding.


In their efforts to keep up with the pace of innovation, the City of Charlotte and our local institutions are not remiss in their efforts to help turn things around.

The University of North Carolina at Charlotte and Davidson College have committed resources to spurring investment through a series of venture challenges and business competitions, respectively. In 2013 the City of Charlotte committed $500,000 in matched funds to help spur high-growth entrepreneurial activity, eliminate gaps in the entrepreneurship ecosystem, and facilitate venture capital deal flow as well.

Community-based leadership has also taken root. Several local accelerators like City Startup Labs, Queen City Forward and QC Fintech serve as a launching pad for early-stage founders, equipping them with access to both business mentorship and seed funding.


With the evidence of investment being made in local entrepreneurship from both a community and city perspective, the pressure must be applied to existing and new venture capital firms. If Charlotte plans to compete in the tech and startup economy, VCs must tap into these verticles and put their money into funding and growing the talent that’s being nurtured right here at home.


Get more local stories in your inbox with Axios Charlotte.


Support local journalism by becoming a member.

Learn more

More Charlotte stories

No stories could be found


Get a free daily digest of the most important news in your backyard with Axios Charlotte.


Support local journalism by becoming a member.

Learn more