Small-Town Incentives Entrepreneurs Should Consider Before Moving to a Big City

Everyone tells aspiring entrepreneurs — especially those in tech — that San Francisco is the only place they can be successful. After building a company in North Dakota and finding all the talent and funding I needed there, I’d like to offer an alternative perspective.

When it comes to small towns, it can be easy to think that the grass is greener somewhere else. There are small-town myths like you can’t find the right talent or you can’t raise funding away from the coasts. There is also a shortage of belief in success in small towns. But common startup concerns aren’t fixed by moving somewhere with more of everything.

In fact, with everyone crammed in the same place, startup necessities from money to quality hires to community support and more are in short supply and high demand.

The following are four benefits of launching a small-town startup business, plus tips on how other small-town entrepreneurs can use the lessons I learned on my journey:

1. You Are the Hottest Employer in Town

Great talent is hard to find anywhere, but big cities make it more difficult for startups to stand out. As a little fish in a pond full of established and eagerly anticipated competitors, you might not be many employees’ first choice of work.

In a small town, however, you are automatically a big fish in a small pond. If you offer a unique opportunity, talent in the area and the greater region will flock to your business. Recruiting the best and brightest suddenly becomes much easier.

When we started our company, we were the only people in North Dakota making enterprise SaaS software. We became experts at pitching our unique situation to people around the area, landing top talent from multiple states including Oregon, Washington, and Colorado.

To follow a similar path, be mindful of the talent war within the area. Evaluate other companies in the region, consider the types of work they offer, and give candidates something new.

2. Fundraising Will Find You

Instead of begging VCs to listen to pitches, small-town startups enjoy having potential funders come to them. Rising numbers of midwestern VCs, including Arthur Ventures in Fargo, North Dakota, and High Alpha in Indianapolis, seek companies outside of Silicon Valley to back. Even some Bay Area investors, such as Steve Case, look for new opportunities between the coasts.

Further, the states themselves are eager to fund entrepreneurs. My company received more than $1.25 million from North Dakota’s Department of Commerce, and we regularly receive financial rewards for being a tech-based company in the area — including funding for training and hiring.

North Dakota has fewer than 1 million people, so state organizations do what they can to keep talent local. It’s an amazing tool for success right in our backyard.

Other government benefits include grants, tax breaks, and low-interest loans through state-owned banks. Check state programs to learn about available funding options you can utilize.

3. Budgeting Is Easy

From staffing to overhead to daily living, small towns ask less of their residents than big cities. Our reduced costs allow us to carry a larger staff than most Silicon Valley startups, giving us an advantage in a globally competitive market.

For our case in North Dakota, both Fargo and Bismark are actively working to improve their downtown areas. That includes tax breaks and incentives to rent, which makes operating an office much cheaper than it would be in a major metropolis. This program is called “The Renaissance Zone,” a model followed by many other small towns.

You, too, can take this money-saving initiative. Before paying an arm and a leg for cramped spaces, evaluate small-town incentives to rent in areas of revitalization.

4. The Community Loves You

In smaller towns, communities advocate for their own. Small-town communities rally behind local companies, which builds momentum, provides mentorship opportunities, and keeps the entrepreneurial crowd inspired.

Our local 1 Million Cups event, where entrepreneurs pitch products and take questions, is one of the best attended in the world. At Google Demo Day, we noticed that all the companies present came from outside of Silicon Valley.

Events like this, specifically geared toward entrepreneurs in smaller towns, show just how powerful small-town support can be. It’s much easier to compete against a couple dozen startups for exposure than it is to compete against thousands.

To become truly local, don’t be insulated. Participate in local events, sponsor local teams, and support local causes.

Entrepreneurs found companies to solve problems. No matter where those companies begin, the obstacles are almost always the same.

By saying “no” to San Francisco or New York City and looking toward smaller communities, you can give your company a chance to shine bright without the need of big city lights.