Miami's Tech Entrepreneurship Ecosystem 2012 to 2022
EXECUTIVE SUMMARY
Throughout 2021, Miami1 made headlines for cryptocurrency, blockchain and the efforts of Mayor Francis Suarez to attract Silicon Valley to Miami. To some, it may have appeared that the city was an overnight success. However, for at least ten years, many had been setting the table so that as this moment arrived, and Miami was ready. Knight Foundation, a longtime investor in Miami's tech entrepreneurship ecosystem, commissioned the Center for American Entrepreneurship (CAE) to investigate how Miami's tech entrepreneurship community has evolved over the past decade, the role the foundation's grantees played in that evolution and what investment is needed for future success.
Over the past decade, Miami has matured into a unique tech entrepreneurship ecosystem on a growth trajectory. South Florida is a destination for those seeking to build and create (53% foreign-born2), and its quality of life is regularly cited as a key draw. As a city of makers, Miami is leveraging the strengths that residents and newcomers bring into a distinctive tech community. Most notably, we see that:
Key benchmarks like venture capital, exits and software employment are on the rise. Miami has seen rapid increases in the number of local workers employed at software jobs, as well as consistent, positive growth in the amount of capital that is invested in local technology companies. Perhaps most importantly, the number of exits valued at over $100 million has also increased in recent years along with the number of privately held "unicorns. "3
Attitudes about Miami's potential have changed both locally and among outsiders. Local entrepreneurs and investors have a positive view of the sector's past and its future. In addition, Miami is attracting founders and venture capitalists who are excited about the local momentum.
Founders have support. A large number of organizations have launched in the region during the past decade to support founders. Where there was only a handful of these organizations in 2012, there is now a full network.
Miami's distinctive approach to supporting the growth of local tech entrepreneurship, led in large part by Knight Foundation and its grantees, has contributed to the community's evolution. Since 2012, Knight has funded more than 150 grants, program-related investments and endowments that total more than $60 million to building a tech entrepreneurship hub in Miami. The foundation is unique among philanthropies for making tech entrepreneurship an investing priority and for focusing its giving on organizations with a plausible path toward financial viability beyond grant funding.
We believe there are clear links between the work of Knight grantees and the local tech sector's growth described in the previous section. Our interviews and analyses suggest that the greatest impact likely came from four areas:
Changing the narrative. Grantees have been very active in working to reshape national and local perceptions of the tech sector to be better aligned with current realities.
Increasing access to capital. Grantees who work in investor education, angel investing groups and the attraction of venture capital have helped activate the dramatic increases in the supply of local angel and venture capital seen in recent years.
Fostering effective entrepreneurship support organizations. Several grantee organizations have supported some of the most successful local tech companies of the last decade, which have produced large numbers of local jobs and economic value.
Improving local quality of life. When asked about Miami's advantages as a tech hub, local entrepreneurs and investors were very likely to mention things like "quality of life," "lifestyle" and "cultural activities" directly connected to the foundation's longtime efforts to support local arts and culture.
It is possible to draw a number of initial conclusions from the work of the foundation and its grantees that could be relevant to foundations and leaders in communities outside Miami. Those interested in fostering tech entrepreneurship communities should recognize it takes a significant amount of time. Knight and its grantee partners have also seen firsthand the importance of continually engaging with and listening to the broader community to inform local strategies. Miami's experience also suggests that just a few entrepreneur support organizations can have an outsized impact in terms of job creation and capital raised.
The continued success for Miami's tech ecosystem will require enduring investment in a few key areas. The recent exits and acquisitions of entrepreneurial tech companies in the region will continue to be very important for demonstrating credibility and for building a self-sustaining ecosystem in which the wealth generated by founders is invested back into the ecosystem. There are three areas the authors of this report recommend for consideration as priorities for future local funding based on our analyses and project interviews with local entrepreneurs and technology investors.
Continue fostering a more inclusive community by gender, race and local geography.
Grow technical talent to meet community demand for careers in technology and address local technology company's need for workers.
Work to address broader threats to the local tech entrepreneurship community, such as the quality of local transportation infrastructure, the housing supply and the existential threats of climate change and sea-level rise.
Source: Knight Foundation