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Miami has always been known for its warm climate, beautiful beaches, diverse population, flavorful cuisine, coffee, and bubbling social scene. In recent years, startups from Miami are becoming one of the city’s biggest drawcards, with many even dubbing it the “new Silicon Valley” for its emerging tech hub status. In 2020, its tech startups garnered $1 billion in venture capital alone. It is also a major finance, commerce, culture, arts, and international trade center.
Miami has become the second most entrepreneurial city in the United States, registering the highest startup density found in the country at 247.6 startups per 100,000 people, and has continued to make giant strides in the startup space. The city is attracting investment at an unprecedented rate. In the second quarter of 2021 alone, Miami received $831 million in venture capital investments, representing a whopping 142% increase in its funding from pre-pandemic levels.
With these figures, it is evident that the city has departed from its previous status of merely a tourist or retirement destination and has now become one of the major hubs of ideas and businesses responsible for designing and delivering the future. In this article, we will be looking at the various factors responsible for this shift and what makes Miami a great destination for startup founders.
Why Miami Is Great For Startups
With 53 percent of Miami’s 2.7 million inhabitants being born abroad, Miami is one of the most international cities in the U.S. and has risen to true global city status. The population in Miami is also extremely diverse and representative of different races, making it easy for people to find groups with which they can identify. But not only is the population of Miami diverse, but the city’s tech scene is also one of the most ethnically and racially diverse, making it relatively easier for individuals from minority groups to access opportunities than they would in other cities.
In addition to the increased consciousness of social justice and the need for a moral approach towards business, organizations are also becoming more aware of the benefits of embracing diversity, which includes a broadened pool of perspectives, innovation, talent, experiences, and skills. This often translates into more unique and richer ideas. Diversity also makes it easier for companies to expand their market and reach by connecting with a larger global audience.
This factor has, therefore, made Miami more attractive to startup founders, investors, and different types of business incubators and accelerators.
The approach towards work that romanticized the neglect of personal life and pride in the title “workaholic” is becoming increasingly unattractive to people, including talents, startup founders, and business leaders. People are increasingly prioritizing offers and conditions that enable them to balance work and other parts of their lives they consider important.
Cities have been proven to be key in determining the amount of work-life balance a person would have. If the culture around a city is one that is heavy on working and does not value relaxation and leisure, workers might struggle with having a work-life balance. For example, it is relatively more difficult to achieve work-life balance in cities like San Francisco, Washington, and New York, which are considered “hard-working” cities in the U.S. In cities like Miami, however, where there is an abundance of places to destress and have fun, and a culture of relaxation, achieving a work-life balance is easier.
The city has also been reported to afford local founders, investors, executives, and local leaders the opportunity to meet, collaborate and network while having fun and relaxing. It is no wonder why the city is an ideal living and working destination for many.
Relatively Affordable Real Estate
Real estate in Miami is highly coveted for the quality of life in the city and its exciting party and vacation spots. The city is also famed for being on the list of the American cities to invest in real estate. It would be expected that these factors would make real estate expensive to acquire and own – and they do. But when compared to other large cities that serve as commercial hubs in the U.S., Miami is more affordable. Real estate in other large cities like New York, Los Angeles, Oakland, and San Francisco are significantly more expensive.
Miami has an unconventional tax structure that many individuals and corporate organizations find favorable. There are no local person or corporate taxes in Miami. Sales and property taxes are also low.
On the state level, there are no personal income taxes. Florida also has a low corporate income tax rate of 5.5 percent and offers several sales tax exemptions.
Top City For Small Businesses
Miami has constantly ranked highly on the Biz2Credit annual rankings on small cities for small business growth. “Small businesses” include companies having less than 250 employees or less than $10 million in annual revenues.
In 2019, Miami was ranked first, knocking off New York City from the top spot. The selection criteria include annual revenue, credit score, age of business, cash flow, debt-to-income ratio, taxes, and other data.
Since most startups fall within the definition of “small businesses” as earlier defined, it’s no wonder why many of them consider Miami a good place to set up and build.