Why You Should Start a Company in... New Orleans

Business & Economy, Recovery, Technology & Science

March 8th, 2010

FastCompany
by Laura Rich

It used to be, if you were serious about starting a tech company, you went to Silicon Valley. But emerging entrepreneurial hubs around the country are giving startup aspirants options. In this series, we talk to leading figures in those communities about what makes them tick. Here, part eight in our series.

What do entrepreneurs do? They find an itch that needs to be scratched and go at it. After the devastating hurricane of 2005, New Orleans definitely had a lot of itches.

Years of effort to attract entrepreneurs and encourage locals to start something as an alternative to the corporate jobs that were lost are paying off. The city now boasts entrepreneurial enclaves like Entrepreneur’s Row, Idea Village and Entergy Innovation Center, all of which is basically real estate housing startup efforts. And the Big Easy also counts several groups and events that have sparked a vibrant community, such as Net2NO, BarCamp, Social Media Club, Startup School, WordCamp, and TribeCon. Though New Orleans lacks an abundance of local capital, the state helps out with a 25% tax break for digital media companies, plus 10% on human capital costs.

It’s still early days for this nascent hub, but one startup may put it on the map: Receivables Exchange. Started by a transplanted New Yorker, the company’s product is a market for companies’ receivable accounts. It recently closed a $17 million Series C round from Bain Capital, Redpoint Ventures, and Prism Ventureworks.

Chris Schultz, president of Internet firm Voodoo Ventures, spoke with Fastcompany.com about what makes New Orleans’ startup scene unique.

What makes New Orleans a great place for startups?
Well, I think New Orleans is a fantastic place for startups, and the city as you know has reinvented itself post Katrina, but some incredible things have happened and that starts with the people that have moved to New Orleans since Katrina. We have this incredible influx of young people, energetic people, people that wanted to be here and want to kind of be part of the recovery. And a lot of folks realized that the best way to do that was through creating jobs by starting companies, so a lot of interesting entrepreneurs moved down. The community in general I think became a lot more open.
More specifically, I’d say the bullet points would be it’s the type of place that I think is right for our times right now from a cultural standpoint. It’s an incredibly creative and historic city with a rich quality of life.

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