Future looks bright in South Florida.

South Florida among top regions for new companies

When Matthew Kim, founder and CEO of Vigilant Biosciences in Fort Lauderdale started his company in 2011, he quickly found funding to be a serious challenge. Ultimately, he persuaded an out-of-state investor to help, but in his most recent financing round, he received support from venVelo, an early-stage angel fund in Orlando, the Florida Institute for Commercialization of Public Research, and some wealthy individuals in South Florida.

Funding a startup, he said, takes “constant networking, telling the story to anyone who will listen.” And now, his early detection product for the dental industry, which was inspired by his family’s history of oral and other cancers, is gaining traction. Vigilant Biosciences raised $5 million in 2016, pushing the total raised since the company’s founding to $12.5 million. Vigilant recently began shipping its first product, and by early 2017, will post revenues from operations.

With an encouraging year ahead of him, Kim said, “the future is bright for startups” in South Florida.

Companies such as Vigilant Biosciences are setting the tone for a startup community that is reaching new milestones. For the second year in a row, the Miami metro area ranked second among the 40 largest metropolitan regions in business creation in 2016, according to the Kaufman Index of Startup Activity. The region was second only to Austin, Texas, in startup activity.

As 2017 kicks in, entrepreneurial growth is gaining strength, say entrepreneurs, investors and mentors. More experienced business people are moving to South Florida, more investors are willing to invest in early-stage companies, and there are better networking opportunities for those in the industry to connect, launch startups and make deals.

“It’s a numbers game, a funnel. You have to have hundreds of thousands of startups to get thousands of early stage companies, in order to end up with hundreds to be venture-capital financed,” said Tim Cartwright, who started Tamiami Angel Funds, one of the largest angel groups in the state. In 2017, Cartwright will be raising money for his new Adrenaline Fund for “seed” investments, or capital used to start a business.

That’s a departure for the state, where seed capital and early stage investors have been hard to find, and big venture capital dollars have proven elusive.

The big dollars have not been elusive for Magic Leap, a Dania Beach-based startup that could soon dramatically lift South Florida’s prominence on the national tech sector map.

Magic Leap has raised $1.4 billion and is hiring hundreds of people for its offices in Dania Beach and Plantation, as well as worldwide. The company is developing technology described by founder Rony Abovitz as “a new mixed reality computing platform that will enable people to interact with the world in ways never before possible.”

Magic Leap has yet to launch its first product. Could 2017 be the year? New marketing chief Brenda Freeman recently told online publication Recode that Magic Leap is “very much on time” and is “racing to launch.” She declined to detail the company’s timeline.

“Magic Leap is going to do incredible things. Just look who the investors are — those are not dumb people who are investing half a billion dollars. They must have seen something,” observed Cartwright, who is not an investor in the company.

Bob Fitts, organizer of Fort Lauderdale startup expo SUP-X , said no matter how Magic Leap fares, the company is attracting new talent to South Florida, a trend that could result in new

entrepreneurs and startups in the region.

“I think Magic Leap has the potential to do to South Florida what Michael Dell did for Austin,” Fitts said.

He said the region’s “ecosystem” supporting startup activity is starting to mature, attracting more experienced business people to the region with higher quality ideas that draw more organized investing.

One local investor is Mark Volcheck, founder of Las Olas Venture Capital in Fort Lauderdale, which has invested in about 40 startups with partners. Now he’s turning his attention toward follow-up investment for startups by raising $50 million for Las Olas Venture I Fund. One target will be the health-tech sector.

“We see a lot of activity and opportunity in healthtech, particularly in Florida,” Volcheck said.

Las Olas Venture I Fund has invested $1 million in Fort Lauderdale-based CarePredict, a sensor system used to monitor the daily living activities of senior citizens in nursing homes. The fund was part of a $2.5 million round for CarePredict in 2016.

“The sector they’re in is very promising and a big problem for society — how do we improve health care and address the growing elderly population? These are important issues for us to solve,” Volcheck said.

Florida pales in entrepreneurial investment when compared with other highly populated states including California, Texas and New York. Even with Magic Leap’s $793.5 million round in February 2016, Florida ranked fourth in venture dollars, quickly falling to 13th in the second and third quarters of the year.