Why Inc. Magazine Says Startups Are Flocking to Arlington

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Editor’s Note: Sponsored by Monday Properties and written by ARLnow.com, Startup Monday is a weekly column that profiles Arlington-based startups and their founders, plus other local technology happenings. The Ground Floor, Monday’s office space for young companies in Rosslyn, is now open. The Metro-accessible space features a 5,000-square-foot common area that includes a kitchen, lounge area, collaborative meeting spaces, and a stage for formal presentations.

It’s no secret that Arlington is home to dozens of startups and more than a few incubators.

Inc., a magazine covering business and entrepreneurship, recently identified three reasons as to why Arlington is attracting so many startups to the area: location, talent pool and access to government resources.

Arlington’s location gives startups the big city feel without many of the traffic hassles. It also gives better access to the Dept. of Defense, which is among the largest of potential customers, Anna Hensel writes.

The proximity to the federal government is one of the top reasons Arlington is attractive to defense and technology startups, said Geoff Orazem, the founder of incubator Eastern Foundry in Crystal City.

Startups backed by Eastern Foundry are often looking for federal grants or contracts, and having the access to the Pentagon or other areas of the federal government makes it easier to secure funding, Orazem said.

“Working in the federal government requires a lot of relationships,” he said.

Arlington and startup incubators in the county provide various ways for companies to network, said Cara O’Donnell, spokeswoman for Arlington Economic Development.

“The networking opportunity is excellent here as well — this is where startups can meet the individuals that can give them their big break, whether it’s through initiatives like TandemNSI, pitch competitions or workshops through our BizLaunch program,” she said.

Being so close to D.C. also means access to mass transit and to three different airports. Startup founders and employees can easily hop on the Metro to travel to and from D.C. and the proximity to Reagan National Airport, as well as Dulles Airport and Baltimore Washington International, is helpful for companies requiring travel.

When startups are first starting, the public transit can help cut down living costs. But for the most part, being able to go car-free or having access to an airport are added bonuses and not necessary for a startup’s growth, Orazem said.

There are some Arlington startups that need the access to the airport, which makes the county’s location a prime destination. Ingo and mProve Health, two companies in Arlington credit the access to airports as one of the reasons the companies set up shop here. Both require travel as they both have multiple international clients.

Arlington is located in area with numerous colleges. Although Arlington is only home to one university — Marymount — there are several key satellite campuses here.

“In Arlington startups also have access to unprecedented university research and opportunities to connect with federal defense and research agencies — the very agencies that seek high-tech businesses to build on top secret technology,” O’Donnell said.

D.C., Maryland and Virginia universities also provide a rich pool of talent for whom Arlington is an attractive first post-college home. Inc. noted that 71 percent of Arlington residents ages 25 and up held a bachelor’s degree. A strong talent pool is important for startups, Orazem said, adding that to build a startup, entrepreneurs need a good team, a good idea and capital.

In addition to the graduates fresh out of college, Arlington also offers startups the chance to draw from the pool of talent coming from Capitol Hill. After doing public service, some choose to go into business, Orazem said.

“So you have this constant churn of really smart, young people,” he said.

Arlington provides an attractive lifestyle, Orazem said, noting the wide range of property values as well as an active social scene.

“It’s a young city, [and] there’s a lot of energy,” he said. “There’s a good food scene. There’s a good nightlife scene.”

Beyond helping to provide a desirable lifestyle, the county offers a supportive environment for new businesses to thrive, Hensel wrote in the article. The county is currently offering a competition with a prize of three free months of office and living space. It also partnered with a Chinese incubator to host a global pitch competition.

“Everything from the [Business Improvement Districts] to the county has really put their money where there mouth is in making Arlington an attractive place for startups,” Orazem said.

The county and state provide tax incentives for small businesses, and the county can be a good resource for young companies, Orazem said.

“You feel like you can go to the Arlington Economic Development center and you feel like you can get one touch answers to any question a small business owner might have,” he said.

The one thing that Arlington lacks is access to large venture capital firms, an important part to having a successful company, Orazem and Henselsaid.

“I think the one thing that’s missing, is there isn’t a great venture capital community here,” he said.

The lack of venture capital hurts the growth of Arlington as a startup community, Orazem said, adding that besides that funding gap, the county is a good place for new companies.

“Arlington is just a really fantastic place to start up shop,” he said.