News Analysis: How U.S. county becomes new hot spot for tech startups

Talking about cutting-edge startups people usually think about Silicon Valley, while Arlington, a county in North Virginia within the Washington metropolitan area has also become a hot spot for tech startups.

There are several hundred startups in Arlington right now focusing on areas from clean energy, big data, and cyber security to education technology and medical technology, according to Arlington Economic Development (AED), an agency to promote local business development.

TALENT POOL

"I think every startup needs access to talent...this is the first key," Mason Chenn, business development director of MicroBenefits, a three-year old startup that makes mobile applications for smartphones, told Xinhua.

Some startups want to find engineers and some are looking for sales people or both, said Chenn, and Arlington can "fulfill both of the requirements."

Chenn's optimism comes from the local talent pool. According to the data from the U.S. census bureau, 72 percent of all residents over 25 in Arlington hold a bachelor's degree or higher, which is among the highest in the United States.

"There is quite a lot of talent living and working in Arlington," Victor Hoskins, director of the AED told Xinhua, because Arlington is quite near to Washington D.C. and the Pentagon, and several federal scientific institutes are based here.

Many companies and incubators have also opened their offices in Arlington in recent years which give entrepreneurs more support to start and grow their own businesses.

California-based tech company TechShop opened its office in Arlington two years ago. It trains entrepreneurs to make their products using current cutting-edge equipment and computer design software.

TechShop member John Mcbarthy told Xinhua that by using the company's laser cutter, he started his own wood engraving business.

1776, an incubator based in Washington D.C. co-founded by Donna Harris and Evan Burfield, two well-known U.S. entrepreneurs, also opened an office in Arlington in 2015.

"At 1776 we provided about 45 hours of one-and-one mentoring sessions for our entrepreneurs every week," Noelle London, campus manager of 1776 told Xinhua.

1776's mentor will give entrepreneurs advice on anything from public relations strategies, marketing and taxes to fund-raising, said London.

London said 1776 will also help startups to establish more connections with potential customers and investors and build a solid community for startups to share ideas in a comfortable and flexible working space.

MicroBenefits joined in 1776 in March this year, Chenn said. His company is able to use 1776's expertise and network to train sales and marketing teams and introduce its products in the U.S. market.

EARLY-STAGE CAPITAL

Capital is "the second key" for startups to grow their business, said Chenn, adding that "you have a very healthy ecosystem for early stage and angle investors here in the Washington D.C. area."

In recent years more and more early-stage funds and angel funds have come here to help start-ups expand.

1776 itself has set up a seed fund of 12.5 million U.S. dollars to support its members and one of its services is helping its members establish connections with potential investors, said London.

In 2014 the Arlington County launched a public-private partnership fund of 700,000 dollars to help tech startup within the county.

Arlington's tech startups have also aroused the attention of international early-stage funds.

Some startups here or on the east coast of the United States have the right technology and costs are cheaper than in the Silicon Valley, Zhang Tao, chief executive of Dao Ventures told Xinhua.

"There are some real chances here and Chinese investors should pay more attention to them," said Zhang, an investor who wants to bridge U.S. high tech startups with the Chinese market.

GOVERNMENT SUPPORT

In addition to a healthy commercial environment, government has also played a vital role in the development of startups in Arlington.

First, government is one of the biggest customers to help startups grow. Hoskins said part of his job is to match the government demand with local startups.

In December 2014, a new startup incubator Eastern Foundry was launched in Arlington. Its main role is to help startups become a government contractor.

Second, Arlington County has taken several steps to help startups grow like cutting taxes to attract more incubators.

If a tech startup can increase its employment by 25 percent in a year and keep it for the same period, it will enjoy a 50 percent-cut in the local business tax, Sindy Yeh, director of international investment at AED told Xinhua.

Arlington County also shares part of the costs and changed several rules for incubators that set up shop here to offer training to local entrepreneurs who want to start their own business.

AED started a pilot project for WeWork, a startup incubator with a feature that people can work and live in a same building, which is not allowed in Arlington, said Hoskins.

London also said one of the important reasons that 1776 decided to come to Arlington is support by the local government. Endi