Birmingham Ecosystem

2025 Annual Assessment Of The Birmingham Entrepreneurial Community (and Summary of the New Year’s Playoff Games)

Scores of New Year’s Bowl Games: 

Peach Bowl: Ole Miss 37-31 Georgia
Fiesta Bowl: Miami 45-38 Ohio State
Rose Bowl: Indiana 38-3 Alabama
Sugar Bowl: Oregon 52-42 Texas Tech

Ohio State and Texas Tech—the richest in  NIL money—lost.
Alabama—the richest in tradition—lost.
Georgia—with the head coach who’s won the most national championships—lost.

Score for the Birmingham Entrepreneurial System:

66 funded startups

The number of funded startups has decreased significantly from last year, but, like the NCAA, we are changing the rules for this list: we are no longer counting SBIR funding, and we created this list using publicly available information only. In 2025, several Covid-era pop-up-and-done startups rolled off the list, as they hadn’t received funding in the past three years. Therefore, this may not be a great year for comparisons. However, if you believe that roughly half of the teams in the college football FBS league do not have the money to compete at the championship level, then 66 is roughly equivalent to the same number of impoverished football teams. These 66 companies, then, are Birmingham’s equivalents to the FBS “Group of Five.” 

So what can the entrepreneurial ecosystem in Birmingham and Alabama learn from the complex world of college football playoffs in the portal and NIL era? Wealth and experience alone do not secure success. Ohio State, Texas Tech, Alabama, and Georgia are the Silicon Valley, Austin, New York, and Boston of tech hubs. And on New Year’s Eve and Day, it did not matter. Indiana, Ole Miss, Miami, and Oregon—a nobody, a mid-tier, a rebuild, and a perennial runner-up—advanced. Birmingham can learn from and embrace this. Money alone does not equate to success. 

We bemoan our lack of capital, and that is a very real and prevalent force in the ecosystem. The lack of institutional VC funding can and does negatively impact Birmingham, but it does not preclude such funding. In our state, Acclinate, ARCHimedes Vascular, VeroSkills, QuantHub, Alveolus Bio, HData, and Yuva Bio have all raised money from out-of-state capital institutions. There are more institutional rounds in the pipeline, closed, or at the term sheet stage. It can be done.

We bemoan our lack of talent, but these companies and others prove otherwise as well. Zoom has given startups an unbelievable advantage. Startups can now obtain the right remote talent at the right time. It doesn’t matter where employees or consultants live; they just need to provide you and your company with the right answers. Just because you are based here does not mean everyone needs to be based here. 

And not to draw too deeply on the college football playoff analogy, but I think it is telling that the one thing all of the playoff competitors had in common is a link to Nick Saban. One of Nick Saban’s greatest strengths is that he continuously relearned and rethought the game as the game itself evolved. Again, the entrepreneurial ecosystem can learn from this. As startup capital evolves, getting ahead of the game, relearning the rules, and positioning yourself accordingly allows you to leapfrog over others. Even if we are uncertain about our greatness, we can be Texas Tech, Indiana, Tulane, or James Madison coming in from the left-behind conferences. 

The capital markets are creating just such an opportunity, and we cannot ignore the larger market reality. The equity capital markets are rapidly evolving toward greater efficiency. Founders must dedicate time to understanding the capital markets and the specific requirements of different types of equity, as well as to planning their financing accordingly. VC is not a single path; VC is an array of funding options with many sub-categories. Founders must understand the requirements of firms focused on funding companies in their industries.

Thus, a business plan is not enough: a detailed financing plan is essential. Unless your goal is to grow exclusively through the reinvestment of profits—which is a wonderful but uncommon path—you must have a clear understanding of how your business will be funded over the next five to ten years. The more they understand current and future funding, the better founders can point their startup in the right direction. We have seen some founders who are already doing this, but we’ve also seen many who are not.  

A good financial plan has multiple alternatives, given that a founder cannot control the capital markets. Securing financing is quickly becoming the most significant risk ahead of typical business risk. Birmingham companies must actively mitigate this risk to reach their next stage of growth. To do this, we need to act big. The capital markets want to fund big ideas, and our mantra should be to lean into doing big things. Let us not be scared of the unicorn. Billion-dollar early-growth companies do exist, and if we are not chasing that, then we are in the wrong business.

The Birmingham ecosystem, as a whole, would benefit from analyzing the gaps and looking at this as well. We have a history of doing huge things in business but being quiet about it, and that is fine, as long as we find the capital to support our endeavors.  Encouraging founders who do big things should be top of mind for all of our incubators, angel investors, accelerators, and ecosystem builders.  

If we do that, I think we can build large, sustainable companies that will backfill our current large companies, which, over the next decade, will inevitably turn over, sell out, tread water, or explode (for better or worse). That is why it’s important that we lean into the ecosystem, and I think continuing to do so is essential for long-term success in Birmingham and Alabama.