2 days ago
The next generation of startup funding
Venture capital fuels the world of startups. But for founders located outside major startup hubs such as San Francisco, New York, and Los Angeles, capital often remains just out of reach—no matter how promising the idea.
At this year's conference in Birmingham, Fast Company and Innovate Alabama —the first public-private partnership in Alabama focused on growing the innovation economy in the state—hosted a panel on how to bridge that regional funding gap. The conversation explored how smart state policy and public-private partnerships can level the playing field and help launch thriving entrepreneurship ecosystems in smaller markets. Experts in capital access and company-building shared insights on what it takes to attract investment and grow new ventures in overlooked markets. Here are three takeaways from the conversation. (Some comments have been edited for length and clarity; scroll to the bottom to watch the entire panel discussion.)
1. To attract venture capital, start from the bottom up.
Building a company from concept to thriving enterprise requires the right mix of technological infrastructure, adequate funding, qualified employees, and energetic collaborators. 'One thing that we think a lot about at Innovate Alabama is supporting founders across the entire innovation continuum, from that ideation stage to incubation, acceleration, commercialization, and stabilization,' said Mary Beth Grant, program director of the Innovate Alabama Capital Access Initiative. 'We're making sure that we're creating programming connections and an ecosystem that can carry [a company] all the way through.'
In June 2025, Innovate Alabama launched the Venture Studio and Fund in partnership with Harmony Venture Labs, a Birmingham-based company that supports new enterprises. The Venture Studio is designed to help build high-growth, venture-backed startups from the ground up. Founders located at the studio site in Birmingham and remotely across the state build, test, and launch their ideas with mentoring, support, and collaborative partnerships.
'We really want to make sure that we're looking at this holistically to grow new companies here in Alabama,' Grant said. 'We're working to fill in the gaps and help them commercialize their ideas and stabilize their businesses.'
The initiative builds on existing programs that provide tax incentives, matching grants, business incubator sites and acceleration. Innovate Alabama also helps young companies partner with industry players to test concepts and adapt their ideas through in-market experimentation.
This multifaceted approach is focused on increasing venture capital flow into Alabama and helping innovative young businesses thrive. Several successful companies already have benefited from this suite of programs, including Accelerate Wind, which builds and installs wind turbines on commercial roofs, and Shipshape AgWorks, which creates AI -enabled modular vertical farm systems.
2. Create a steady flow of funding opportunities.
Venture capital tends to focus on areas where the pool of potential deals is relatively deep. Investors are looking for a high concentration of well-managed companies that can generate returns, said Shegun Otulana, founder and CEO of Harmony Venture Labs. Historically, Alabama hasn't had a strong enough deal flow to capture the attention of VC investors, but that reality is shifting. The key? 'You have to create your own gravity,' Otulana said.
Harmony Venture Labs is accomplishing this, in part, by leveraging Alabama's strengths. The organization has partnered with the state's cornerstone industries—including logistics, medical technology, financial services, industrial systems, and agricultural technology—to identify unmet needs and inefficiencies within their operations. 'We roll up our sleeves to do a lot of discovery work and research,' Otulana said. 'We then pair those problems with interesting founders who are also interested in that space and with capital, all with the goal of increasing momentum here in Alabama.'
3. Strike a balance between public mandates and business needs.
Venture capital firms are used to moving quickly and doing whatever it takes to make a deal happen, Otulana said. But in public-private partnerships like the Venture Studio and Fund, a balance must be struck between making decisions that benefit the public good and decisions that will succeed in the business world. 'The most important thing is to make sure that everybody's in alignment,' he said.
Clear communication plays a big role in ensuring this happens. 'We're communicating with the community about the programs we're doing, [being] transparent, getting public buy-in, and making sure that what we're creating is going to impact the state as a whole,' Grant said.
Though the Venture Studio kicked off only in March 2025, this already appears to be a winning combination with positive feedback from the community and several corporate partners already onboard. 'It's been really validating to see that interest in utilizing the new programs,' Grant said.
Watch the full panel:
