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Youngkin: Va. spawned 10,000+ startups in 2022-23

More than 10,000 high-growth and high-wage startup companies were created in Virginia during 2022 and 2023, according to research conducted by Richmond’s Chmura Economics & Analytics for the Virginia Innovation Partnership Corp. 

On Thursday, Gov. Glenn Youngkin announced this achievement at an event at Zebox America, an Arlington County-based startup accelerator and innovation hub run by shipping giant CMA CGM Group. Representatives from Chmura and VIPC, a state-affiliated nonprofit that provides strategic commercialization and funding support to Virginia-based tech startups, were able to show the work behind that 10,000 startups number Friday afternoon. 

To be considered a startup by Chmura Economics analysts, a company had to offer above-average wages for Virginia and had to have an above-average forecasted employment growth rate. Using that criteria, the firm found 10,337 Virginia-based startup companies that launched in 2022 and 2023. 

“At the beginning of my administration, I pledged to reinvigorate job growth and foster an environment for 10,000 new startups in Virginia, and we’ve achieved it in record time,” Youngkin stated in a Thursday news release. In that release, the governor’s office claimed that the administration had “achieved this 10,000 new startup milestone faster than any previous Virginia governor’s administration in the last 15 years.”  

VIPC and Chmura Economics representatives provided a chart to Virginia Business listing the number of startups launched in Virginia in the first two years of the tenure of each Virginia governor since 2010. In 2010 and 2011 under Gov. Bob McDonnell, Virginia created 5,802 startup companies meeting the criteria. In 2014 and 2015 under Gov. Terry McAuliffe, Virginia created 6,684 startups. In 2018 and 2019, under Gov. Ralph Northam, 6,149 eligible startups were created. 

Creating 10,337 new startups in 2022 and 2023 is a rate 66% higher than the historical average of those figures, according to VIPC CEO Joe Benevento. 

VIPC plans to distribute more information about the research during the week of Aug. 5. 

For 2022 and 2023, nearly 500 more startups were created on average each quarter in Virginia than were created during the 2012-2021 quarterly average, according to VIPC and Chmura. 

“The other thing that was really nice to see from the data that Chmura crunched … was [that] this increase was really broad, based across all the regions of the commonwealth,” Benevento said. 

All regions of Virginia saw an increase in the average quarterly number of startups created in 2022 and 2023 over the average quarterly number of startups created during the 2012-2021 period, according to Chmura’s data. The average quarterly number of startups during these two years was an increase compared to the average quarterly number of startups created between 2012-2021, according to the data. 

GO Virginia, the state economic development initiative to foster job creation, divides the state into nine regions. Go Virginia Region 1 in Southwest Virginia saw the smallest increase, at 5%. Go Virginia Region 3 in Southern Virginia saw the greatest increase at 41%, according to the data provided by Chmura Economics. 

Youngkin also noted in Thursday’s release that Virginia ranked No. 8 in the country for highest venture capital investment activity during 2023 and was ranked 13th in 2022, according to data assembled by Chmura Economics from the National Venture Capital Association.  

“We’ve reached this incredible milestone by driving innovation, fostering entrepreneurship, bolstering our talent pipeline, providing needed tax relief and truly creating an environment where startups and businesses can thrive,” Youngkin stated Thursday. 

In May, VIPC announced a program called Virginia Invests, with VIPC partnering with seven venture capital fund managers to invest $100 million in 100 Virginia-based high-growth startups.

“VIPC’s most recent new statewide initiative for example, Virginia Invests, is going to attract and catalyze over $250 million of outside venture capital from private market investment partners that will be invested directly in Virginia startups and help support the next wave of 10,000 new startups in Virginia,” Benevento said in statement sent Friday. 

In July, Virginia ranked as CNBC’s Top State for Business, marking the record sixth time the business news network has rated Virginia No. 1 in the nation.

VIPC partners with VC funds to invest $100 million in 100 startups

The Virginia Innovation Partnership Corp. is partnering with seven venture capital fund managers to invest $100 million in 100 Virginia-based startups.

Through the partnership, announced May 20 by Gov. Glenn Youngkin and named Virginia Invests, VIPC will commit $40 million to the seven funds using previously awarded funding from the U.S. Treasury Department’s State Small Business Credit Initiative. In December 2022, Youngkin’s office announced that Virginia had been approved for up to $230 million from the SSBCI program, with about $173 million of that going to VIPC.

“The lifeline of a high-growth entrepreneurial ecosystem is the ability to tap into capital,” Youngkin said, “and that’s exactly what Virginia Invests is all about. How do we accelerate growth? How do we amplify good ideas? How do we unleash opportunity by bringing together people who want to invest in all of this and people who need the money to make it go?”

The funding firms have committed an additional $60 million, and they will select the 100 high-growth startups to invest in during the next three to five years. By contract, firms not headquartered in Virginia will have to provide 1.5 times the funding they receive, while firms headquartered in the state will make a 1:1 match, Youngkin told reporters.

“One of, I think, the really important steps was to recognize that picking companies is not something that we should do,” he said. “We should invest in funds that are picking companies, and that also allows us to have the ability, if companies are doing well and more capital is being put to work well, then potentially, we could invest some more. But the resources and the expertise that are represented by these seven funds in particular deep sectors is unique.”

The seven fund managers focus on founders who are typically underserved. They are Washington, D.C.-based 100KM Ventures; New York-based AIN Ventures; Houston-based The Artemis Fund; Portland, Oregon-based The BFM Fund; Chapel Hill, North Carolina-based Idea Fund Partners; Atlanta-based Valor Ventures; and Tysons-based Veteran Ventures Capital, which recently moved its headquarters from Tennessee to Virginia.

“This is the first round of [funding] commitments. There’ll be more,” Youngkin said.

The nonprofit operations arm of the Virginia Innovation Partnership Authority, VIPC provides strategic commercialization and funding support to Virginia-based tech startups.  

Top Five July 2024

1   |   39 Virginia companies make the 2024 Fortune 1000

Thirty-nine companies headquartered in Virginia are on Fortune magazine’s 70th annual Fortune 1000 list, with 24 Virginia companies again making the elite Fortune 500. (June 4)

2   |  VDOT buys Owens & Minor’s Hanover headquarters for $33.5 million

The Virginia Department of Transportation plans to move the state agency’s central office into the Mechanicsville building in summer 2025. (May 13)

3   |  VIPC launches $100 million fund partnership for Virginia startups

The Virginia Innovation Partnership Corp. is partnering with seven venture capital fund managers to invest $100 million in 100 Virginia-based startups. (For more on this story, see Page 12.) (May 20)

VIPC CEO Joe Benevento speaks at May 20 event with Gov. Glenn Youngkin in background. Photo courtesy Virginia Innovative Partnership Corp.

4   |  Capital One, Walmart end credit card agreement

McLean-based Capital One Financial is no longer the exclusive issuer of Walmart consumer credit cards. (May 24)

5   |  Hampden-Sydney College receives $20 million pledge

Richmond-based Endeavour Legacy Foundation pledged $20 million to Hampden-Sydney College, the second largest gift in the college’s history. (May 14)

VIPC launches $100M fund partnership for Va. startups

The Virginia Innovation Partnership Corp. is partnering with seven venture capital fund managers to invest $100 million in 100 Virginia-based startups.

Through the partnership, announced Monday by Gov. Glenn Youngkin and named Virginia Invests, VIPC will commit $40 million to the seven funds using previously awarded funding from the U.S. Treasury Department’s State Small Business Credit Initiative. In December 2022, Youngkin’s office announced that Virginia had been approved for up to $230 million from the SSBCI program, with about $173 million of that going to VIPC.

“The lifeline of a high-growth, entrepreneurial ecosystem is the ability to tap into capital,” Youngkin said. “And that’s exactly what Virginia Invests is all about. How do we accelerate growth? How do we amplify good ideas? How do we unleash opportunity by bringing together people who want to invest in all of this and people who need the money to make it go?”

The funding firms have committed an additional $60 million, and they will select the 100 high-growth startups to invest in during the next three to five years. By contract, firms not headquartered in Virginia will have to provide 1.5 times the funding they receive, while firms headquartered in the state will make a 1:1 match, Youngkin told reporters.

“One of, I think, the really important steps was to recognize that picking companies is not something that we should do,” he said. “We should invest in funds that are picking companies, and that also allows us to have the ability, if companies are doing well and more capital is being put to work well, then potentially, we could invest some more. But the resources and the expertise that are represented by these seven funds, in particular deep sectors, is unique.”

The seven fund managers focus on founders who are typically underserved. They are 100KM Ventures, AIN Ventures, The Artemis Fund, The BFM Fund, Idea Fund Partners, Valor Ventures and Veteran Ventures Capital.

Washington, D.C.-based 100KM Ventures provides pre-seed through Series A funding, focusing on early-stage companies working in the future of work or women’s health. 100KM Ventures plans to partner with Virginia’s historically Black colleges and universities, said founder and Managing Partner Shalanda Armstrong.

New York-based AIN Ventures is a pre-seed and seed-stage fund that invests in veteran-led companies and in companies “at the intersection of deep technology and dual-use,” co-founder and General Partner Emily McMahan said. “We are particularly excited about Virginia because of the emerging life sciences research ecosystem, as well as software development,” McMahan said.

Startup founders will also have access to AIN Ventures’ Academy Investor Network, a syndicate of graduates from the five U.S. military service academies that invest alongside AIN and help with deal-sourcing, vetting and providing post-investment support.

The Artemis Fund leads seed rounds for female tech founders whose companies are in financial technology, commerce and care. One of the Virginia-based companies in the fund’s portfolio is Naborforce, a Richmond-based tech company that connects older adults to a network of people who can provide help around the home or around town and socialization. The Artemis Fund also plans to hire venture fellows from Virginia colleges and universities, said Stephanie Campbell, a co-founder and general partner.

The BFM Fund is an industry-agnostic seed-stage venture fund focused on founders who are Black, Indigenous and people of color. The firm is based in Portland, Oregon.

Chapel Hill, North Carolina-based Idea Fund Partners provides pre-seed and seed capital to technology companies in overlooked geographies or with overlooked entrepreneurs, said Managing Partner Lister Delgado.

“We are very excited to be working with South, Southwest Virginia and the Shenandoah Valley, and we are looking to develop strategies and develop entrepreneurial community,” he said. The firm is opening an office in Richmond.

Valor Ventures, an Atlanta-based seed-stage lead firm, is focused on B2B software and AI startups in the southern U.S. The firm has a podcast with more than 50,000 listeners, said investor William Leonard, and will be extending it to Virginia, focusing on founders, ecosystem builders and investors. Valor Ventures also plans to bring its VC Day, a private, investor-centric conference focused on bringing $5 billion of capital to Virginia.

Veteran Ventures Capital focuses on investments from the late seed through series A and B funding rounds in veteran-led companies creating dual-use technologies that have military and commercial applications. The firm relocated its corporate headquarters from Tennessee to Tysons, said Josh Weed, a general partner at Veteran Ventures Capital.

“This is the first round of [funding] commitments. There’ll be more,” Youngkin said.

VIPC is the nonprofit operations arm of the Virginia Innovation Partnership Authority. It provides strategic commercialization and funding support to Virginia-based tech startups.

VIPC taps Benevento as permanent president and CEO

Joe Benevento will remain as the Virginia Innovation Partnership Corp.’s president and CEO permanently after serving in the role on an interim basis since September 2023, VIPC announced Wednesday.

Benevento took over as interim CEO when Bob Stolle announced he was stepping down. A not-for-profit corporation created in 1985 by the General Assembly as an economic development organization for the tech sector, VIPC provides strategic commercialization and funding support to Virginia-based tech startups.

“Joe Benevento brings tremendous leadership talent and investment experience that will greatly serve the Commonwealth of Virginia,” Gov. Glenn Youngkin said in a statement. “A robust innovation-driven economy that accelerates R&D commercialization, catalyzes private investment capital and spurs entrepreneur startup growth will unleash opportunity throughout the entire Commonwealth. I know Joe will hit the ground running as CEO of VIPC and I look forward to working closely together to achieve a ‘Day 1 Goal’ of my administration to create 10,000 new high-growth startups in Virginia.”

Benevento previously served as deputy secretary of commerce and trade since 2022, helping to develop Virginia’s “Compete to Win” and “Innovative Framework” strategies for driving economic growth across the commonwealth, according to a VIPC news release . He also oversaw a state commerce portfolio of industries including technology, life sciences, aerospace and defense, semiconductors, advanced manufacturing, cybersecurity, unmanned systems and other sectors.

“VIPC is well-positioned to lead Virginia in developing, attracting and retaining talent, capital and innovation which expands investment, growth and opportunity across the entire commonwealth,” Benevento said in a statement. “I look forward to collaborating broadly and inclusively with the governor’s administration, General Assembly, entrepreneurs and startups, university research leaders, venture capital investors, entrepreneur support organizations, regional ecosystem leaders, industry corporate partners and other valued stakeholders. I am honored to serve the Commonwealth of Virginia and excited to lead VIPC into an ambitious future.”

Benevento has 20 years of business strategy and investment management experience across direct equity investing, business operations growth and executive board advisory positions spanning early-stage startups, small and midsized businesses and Fortune 500 companies. He began his career at New York-based investment banking company Goldman Sachs and Boston-based private equity firm THL Partners.

Before he joined state government, he was managing director of a Richmond-based investment firm. He has advised, invested, managed or monitored more than $10 billion in enterprise value and contributed to raises of newly-closed investment funds ranging from $250 million to $20 billion, according to VIPC.

He earned a bachelor’s degree in economics and management from Cornell University and his MBA from Harvard Business School.

Benevento serves on the boards of several regional technology and entrepreneurship organizations including the Northern Virginia Technology Council; Verge (the Roanoke-Blacksburg Innovation Alliance); Virginia Biosciences Health Research Corp.; Virginia Alliance for Semiconductor Technology; and the Virginia Space Grant Consortium.

Va. joins collaborative to launch air taxi industry

Virginia has joined seven other states in forming a collaborative to support the growth of the advanced air mobility industry.

The Advanced Air Mobility Multistate Collaborative represents all aviation modes, including small uncrewed aircraft systems (sUAS) and electric vertical takeoff and landing vehicles (eVTOL), which are both often referred to as air taxis, as well as traditional aviation and airports. The collaborative is meant to act as a forum for exchanging industry ideas around technology, economic and infrastructure development, and commerce and trade, as well as to identify and harmonize governance and regulatory mechanisms in each state to ensure continuity of operations. It will also study the development of guidance for state authorities to connect with and complement the Federal Aviation Administration’s airspace jurisdiction.

“While the Federal Aviation Administration regulates AAM operations in the national airspace, state governments can support AAM by shaping the state and local laws and regulations, infrastructure and funding that complement the FAA policy and advance the AAM industry,” Virginia Department of Aviation Director Greg Campbell said in a statement.

The collaborative, which held its first meeting in Herndon on Nov. 14 and Nov. 15, is largely comprised of aviation directors from states including Alaska, Ohio, Oklahoma, Oregon, Pennsylvania, Texas and Utah as well as the National Association of State Aviation Officials, though it is expected to grow, said Tracy Tynan, director of the Virginia Unmanned Systems Center, a part of the Virginia Innovation Partnership Corp.

The group plans to add members from other states and to serve as a resource to develop a national AAM ecosystem. It plans to seek input from industry to help with additional analysis and establish goals to enable policy. Its next meeting is planned for Ohio in February 2024 and is expected to cover topics including the role of the states in AAM, lessons learned, harmonizing policy, minimum service levels for physical and digital infrastructure, and financial models for initial funding and how to sustain the building of infrastructure.

An economic impact study released in January showed that air taxis in Virginia could generate up to $16 billion in new businesses and carry as many as 66 million passengers by 2045.

 

VIPC leader to step down

Virginia Innovation Partnership Corp. President and CEO Robert “Bob” Stolle will step down from his role in September after 13 years with the not-for-profit state corporation and its predecessor.

Stolle became CEO of VIPC’s predecessor, the Center for Innovative Technology, in 2020. Before that, he was the economic development organization’s senior vice president for operations. Joseph Benevento, Virginia’s deputy secretary of commerce and trade, will become VIPC’s interim CEO in September, and Stolle will stay on as an adviser during the transition through at least the end of October.

“I think that VIPC is at a really good position now to transition to new leadership. We’ve been through such a period of change over the last three years,” including rebranding in 2021, getting a new board and gaining funding and programs, Stolle said. He’s also proud of the organization’s role in increasing early-stage investments in Virginia-based startups and in helping universities recruit researchers for commercialization programs by assisting them with lab and equipment costs.

“But as I look at it, I recognize that … they need leadership that can look into the next decade, and I wouldn’t be here for 10 more years,” he added, “and I think the organization would greatly benefit from somebody coming in and bringing that vision.”

Stolle, who served as state secretary of commerce and trade under Gov. George Allen, doesn’t plan to retire but does not have his next step lined up, he said.

Looking forward, Stolle said he thinks “the first thing we need to do is make sure that we continue to have that exploratory role, that we’re looking for: ‘What are the new industries? What are the new opportunities?’”

As an example, VIPC identified unmanned aerial systems as an emerging industry sector that had opportunities for Virginia to take advantage of, Stolle said, and the corporation is exploring the potential for growth in new technologies like quantum computing.

“It’s all about workforce,” he said. “Companies will come in if we’ve got the workers, and so we want to make sure that we continue to grow the skill sets  — and right now, that’s information technology and cybersecurity and others — that will help to attract the attention of the nation to Virginia for continued leadership in the workforce.”

VIPC is a not-for-profit corporation created in 1985 by the General Assembly as an economic development organization for the technology sector. VIPC provides strategic commercialization and funding support to Virginia-based tech startups.