Forecasting Charleston Area Technology Growth
Charleston is fast becoming a leading hub of technology companies and such growth is attracting investors throughout the country. The best is yet to come — below are five key factors making the Lowcountry a hotbed of opportunity for entrepreneurs, venture capitalists, private equity funds and strategic partners.
#1. Charleston’s Rising Tech Shoreline. With successful technology companies like Blackbaud and BenefitFocus, along with growth companies like BoomTown and PhishLabs, Charleston has proven it has the platform to foster fast-growing tech companies — from startup to IPO. Charleston is home to a large portfolio of technology companies that include publicly-traded businesses, venture-backed enterprises, emerging startups looking to grow and, importantly, a network of industry players invested in the growth of the Charleston technology community. The success of established companies, the energy of the start-ups and the confidence of industry veterans establishes the base to attract top technology entrepreneurs to the Lowcountry.
#2. From Tourism to Tech — and Beyond! Charleston has emerged over the past decade as a top travel destination combining history, culture, natural beauty and an internationally recognized culinary scene. In addition to tourists, the city is now attracting “snowbird” venture capitalists and angel investors moving south to enjoy the city’s Southern charm and desirable climate. With them comes their capital to invest in local startups along with their time to counsel entrepreneurs and serve on boards.
#3. Boeing Beachhead for Talent. Long before the competition to attract Amazon’s second headquarters, there was the battle for Boeing and Charleston won. At the very moment that Boeing announced its decision, and continuing through the development and operation of the facilities, Charleston is on the business map. No longer is Charleston seen only as a top tourist destination; it now has a vibrant business community with a base of talent to serve the needs of the world’s largest corporations. Importantly, the beachhead created by Boeing’s presence in Charleston can spawn entrepreneurial talent as well as experienced executive advisors for startups.
#4. Funding Frenzy Fever. It’s no secret the Southeast has a shortage of serial seed capital and series A investors. Venture funds in other sections of the country have noted the same shortage. While Boston and Silicon Valley venture funds are unlikely to open branches in Charleston, they are now on notice that Charleston has a depth of talent and entrepreneurs capable of making big waves. Investors also know that Charleston is relatively untapped by their competitors, so opportunity abounds to fund tech companies that may have been overlooked by others.
#5. Business-Friendly Environment. Charleston wants to grow and it is reflected through the actions of its government and business leaders, both statewide and in the Lowcountry. South Carolina has some of the lowest state income tax rates in the nation, especially for corporate income. At a flat 5 percent (almost half the corporate income tax rate in California), only one state in the nation has a lower corporate tax rate. On the personal income side, South Carolina’s highest marginal tax rate is 7 percent, again essentially half the highest marginal tax rate in California. What this means for entrepreneurs is the ability to plow more of their resources back to work growing South Carolina companies.
Charleston is coming of age as a burgeoning tech center, and it is time for the city to promote the qualities making it attractive to entrepreneurs and investors throughout the country. Events like DIG South are pivotal to highlighting Charleston as a tech-friendly city for fast-growing businesses — and to attracting capital from Silicon Valley and northeastern venture funds. This year should be the year for Charleston to claim a spot on the national map as the leading up-and-coming tech player in the U.S.
Larkin Ellzey is a native of South Carolina and a graduate of the University of South Carolina and the University of South Carolina School of Law. He is an attorney in the Corporate Technology Group of Morris, Manning & Martin, LLP (www.mmmlaw.com) concentrating on mergers and acquisitions, private equity, venture capital, strategic investments, franchise relationships and corporate matters for tech companies. Mr. Ellzey advises founders, entrepreneurs, investors and funds in a range of corporate and transactional matters related to technology based enterprises across the country.
This article is presented for educational purposes and is not intended to constitute legal advice. Opinions expressed are those of the author.