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What does Amazon’s move mean for Maryland startups?

George Davis, the CEO of TEDCO. (File)

George Davis, the CEO of TEDCO. (File)

Amazon’s move to Arlington will drive a demand for talent and help bring more venture capital into a region that has been slowly improving in that area. The possibilities have excited George Davis, who as CEO of TEDCO, could see a lot of the benefits.

“We were exchanging emails, the guys in the ecosystem late the other night,” he said. “I think it will generate an opportunity for the ability to, I think, really attract much more talent to the area, and there will be more competition for talent in the area, which I think is healthy.”

Venture-backed companies in Maryland in 2018 have had one of their best fundraising years ever, raising more than $1 billion over the past four quarters, according to PricewaterhouseCoopers and CB Insights quarterly MoneyTree Report.

But investors care less about political boundaries and think more regionally. More money and acknowledgment of Virginia and Washington could lead to the same in Maryland.

“Venture capitalists don’t travel real well. They like to sleep in their own beds,” Davis said. “I think you will see more influx of (capital) coming here knowing that there is more opportunity here.”

TEDCO, short for the Maryland Technology Development Corporation, seeks to provide resources and connections that early-stage technology and life sciences companies need to thrive in Maryland.

Much of the region, like Maryland on its own, has seen fluctuation over the past couple of years, with the number of deals and the amount of money raised changing quarter-to-quarter and year-to-year. Through the first three quarters this year, the region, which also includes West Virginia, has raised nearly $1.7 billion for venture-backed companies. That tops last year’s full-year total of nearly $1.2 billion.

Amazon could help stabilize and grow those areas for the region just by bringing significant talent to the area. The firm is expected to bring around 25,000 jobs to the Arlington headquarters, most expected to be high-paying jobs.

The move will accelerate existing competition for talent, especially computer engineering and computer science talent, in the area and could bring more people with those skills into the area. That is a good thing for venture capital, Davis said.

“Venture capital loves talent to invest in,” he said. “Money chases people as much as it does anything else.”

That talent — those people whom Amazon hires and the peripheral companies that pop up around Amazon — could be the creators of the next big firms in the area.

Amazon’s move into Arlington could also balance out how talent is currently developed. Most of the region’s talent comes through the federal government and local universities and hospitals. Many of these institutions are also known for moving at the speed of government: not very fast and with low risk avoidance.

Having a company known for innovating, for disrupting, for moving swiftly, for adding new products and for changing industries could provide a counterweight to those more staid institutions.

“In the government sector, there is a mindset that’s a little more risk avoidance. In the commercial sector there’s a little more risk-taking,” Davis said. “This balances that really well.”


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