Cities around the U.S. have strived to become the next new hub for entrepreneurs and tech startups, and most have failed. What makes St. Louis different?

For decades, the American startup scene has bloomed primarily within the sprawl of Silicon Valley and the skyscraping high rises of New York. But as these two hubs become more expensive and less accessible to entrepreneurs vying for their big break, startups have begun to set their sights on alternative, budding tech metropolises that are working to provide inviting incentives to entrepreneurs.

Just ask us at L&T — we recently opened a new sales office in St. Louis, a city whose unique business opportunities have opened new doors for our company. As our COO Remy Bernstein says, “we were drawn to St. Louis because it uniquely combines the communal ethos of a smaller metro area with the economic infrastructure of a major U.S. hub. The sense of community is especially noticeable, as we’ve been welcomed with open arms to the local startup ecosystem.” So the question is: should your company meet us in St. Louis?

Enter St. Louis

The U.S. has been experiencing a concerning phenomenon in recent years: the national startup rate has been falling (down to 8% in 2014), and the rate at which Americans are starting new businesses has been in decline for over three decades. This statistic is of particular concern to local and national leaders, who understand the important role new businesses play in job creation and economic growth.

St. Louis is a city that, by all appearances, is quite similar to countless others in the U.S. It’s certainly had its share of problems: corporations that called the city home for decades and have been a major source of revenue have recently begun to move overseas (think Anheuser-Busch, which was sold to a Belgian conglomerate in 2008). This has contributed to a decades-long entrepreneurial slump, and so far, St. Louis has faced stumbling blocks in its attempts to encourage new businesses to plant their roots there.

But there are forces at work in St. Louis that have made it increasingly attractive to innovators looking for a new home. For starters, it’s cheaper than New York and Silicon Valley; and as Bernstein attested, the city has recently made concerted efforts to encourage commercial growth. These efforts have paid off: between 2009 and 2014, the startup rate rose in about a third of U.S. metro areas and in 12 states. Missouri led the way in this rise, boasting three of the five most improved cities, including St. Louis. By 2014, 9.7% of businesses in St. Louis were startups less than a year old — a marked 3% increase from 2009.

The Startup Spirit of St. Louis

An informal cohort of local business leaders, ambitious young professionals, and investors with deep pockets have helped to spark an entrepreneurial revival in St. Louis. This group has demonstrated their commitment to the city’s commercial growth through investment in local ventures, the creation of entrepreneurship clubs at local universities, and the flip of a withering downtown office building into a welcoming startup hub.

These informal efforts, in combination with aggressive public sector initiatives to promote entrepreneurship, have helped make St. Louis, and the rest of Missouri, attractive to new businesses. The state’s investment fund, the Missouri Technology Corporation, invests in local companies and entrepreneurs, while nonprofits such as The Kauffman Foundation promote entrepreneurship throughout the state.

The Arch Grants, of which L&T was a recipient, work to advance economic development through entrepreneurship and philanthropy, further helping to draw new, unique startups to the St. Louis metro area. Although somewhat difficult to measure, these combined efforts have made a world of difference to the startup scene in St. Louis, which has successfully redefined itself as a new tech frontier.

Looking to the Future

Our recent article on the 7 Defining Characteristics of the “Startup-Friendly City” identified several key qualities: innovation-oriented, investment-friendly, affordable; possessing a flourishing ecosystem, a skilled workforce, and simply the right ‘vibes.’ St. Louis has proven itself in all of these categories. Through various grants, nonprofits, and investment initiatives that support tech startups, the grassroots efforts of local business leaders and investors, and the growth of a highly skilled labor force, St. Louis’s future for new businesses sure looks promising.

L&T has certainly found a welcoming, supportive home base for our brand journalism services. We are excited to continue growing in St. Louis, and are confident that many other tech startups will find the same success in this burgeoning city.

Author Carrie Olsen

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