A&K Ventures was established in Estonia in 2016. Since then, the company has been operating mainly in the EU. Along with its continuous expansion, we opened regional offices in Berlin and Warsaw. After Germany and Poland, we decided to set up a business in Phoenix, AZ. Why Phoenix seemed to be a perfect location for our HQ in the United States?

Some facts and figures…

Phoenix is the capital and most populous city of Arizona. With a population of more than 1.6 million people. Just to get a sense of it, the population of Warsaw and Berlin amounts to roughly 1.7 and 3.5 million respectively. Phoenix is the 5th city nationwide in terms of the population. Phoenix is the anchor of the so-called Valley of the Sun (a popular name for Phoenix metropolitan area). The population of the whole agglomeration is c.a. 4.3 million.

Nowadays, Phoenix is located in the heart of the fastest growing and most dynamic metropolitan area in the country with a population of over 4 million people. As it became a popular hub for many startups in the USA, the Valley of the Sun is more and more often compared to the Silicon Valley in California. Despite a very rapid growth, it is still an untapped market with numerous opportunities for everyone, especially tech companies. Not only downtown Phoenix is studded with tech startups. They pop up as well in all adjacent cities such as Scottsdale, Glendale, Goodyear, and Tempe. This created a unique market which appeared on the A&K Venture’s radar. “One we spotted the opportunity, we decided to set up a business in Phoenix right away” as per one of our Co-Founders.

Venture capitalists spotted opportunities in the Valley of the Sun as well.

According to the MoneyTree Report prepared by PricewaterhouseCoopers, venture capitalists invested over $44 million in companies based in the Valley of the Sun in the 4Q of 2016. The total annual volume of investments leveled off at c.a. $221 million. It constitutes a year-to-year growth at 34% when comparing investment volumes form 2016 and 2015. The best part is that the growth is expected to be even higher in 2017.

60% of tech startups in the Valley of the Sun decide to locate their offices in downtown Phoenix

60% of tech startups in the Valley of the Sun decide to locate their offices in downtown Phoenix

The Valley of the Sun – a perfect place to set up a business in the USA?

If you are thinking of establishing a startup which will be fully self-financed you should really consider Phoenix. Currently, this view is completely supported by our Co-Founders who were first convinced that the company’s American HQ must be located in Silicon Valley or Delaware. Silicon Vally seemed like a natural choice whereas Delaware was tempting with its tax exemptions. However, it turned out quickly enough that the Silicon Valley was too expensive for a start and Delaware was not a startup hub with young tech communities all around. After a thorough research, we decided to open a new office in Arizona. Phoenix was a perfect location to set up a business as it was a booming startup hub with a proper and developed supply network. Moreover, it was affordable for a young and self-financed company.

You can rent a "desk" in co-working spaces in downtown Phoenix for $100 per month, dedicated desks start at $300

You can rent a “desk” in co-working spaces in downtown Phoenix for $100 per month, dedicated desks start at $300

When you think of technology companies, you probably think of California as our Co-Founders did. Yet, we quickly became convinced of our choice. After a couple of networking events, we realized that it is a current trend here in the USA. More and more companies are leaving Silicon Valley for the Valley of the Sun as they are looking for savings and new opportunities which this new market offers. In the past 5 years, the annual growth of the number of startups amounted to 25%.

Many wrongly pigeonhole Phoenix as a city in the middle of a desert where nothing happens.

As it turned out, the city of Phoenix was exceptionally attractive to set up a business for A&K Ventures. We have found out it was also strikingly underrated. From today’s perspective, with the benefit of hindsight, we have a long list of reasons why Phoenix is the best place to set up a business and start your entrepreneurial career in the USA. The cost of living is much lower in Arizona in comparison with California (i.e. rent, gas, groceries, entertainment, etc.). Instead of paying your employees more in order to keep up with inflated housing expenses you may simply reinvest the surplus giving your business additional boost. And it is not just about the real estate, you can save up to 50% on all consumer goods, entertainment, leisure, gas, education, etc.

With a construction of light railway the nightlife in downtown Phoenix revived

With a construction of light railway, the nightlife in downtown Phoenix revived

You can feel the wind of change at every corner in the city.

With the increasing population and growing number of startups, the city is flourishing. It changes dynamically. Townies claim that there was literally nothing to do in the city center. Each month, another cafe, pub or restaurant opens up in downtown Phoenix. The city’s economy used to rely on retail and heavy production. Nowadays, it transforms and adjusts to the current market conditions. The retail and warehouses being replaced by new industries. The old produce warehouse was refurbished and is now home to almost 80 tech companies and a college that supplies them with talent.

New investments enlivened the city center of Phoenix

Experts from the Community and Economic Development claim that the current bonanza was possible due to some major investments in recent years such as the construction of the light railway, relocation of universities closer to the city center, improvement of transit/transport links and hubs in the Valley of the Sun. Office buildings in downtown Phoenix are filled with tech companies which are constantly looking for new hires. Many of those are millennials, who are attracted to the housing and nightlife that has improved significantly.

Companies like Uber, Quicken Loans, Infusionsoft, Parchment, PureChat or DoubleDutch, just to name few, have already spotted the opportunity on the horizon and moved their offices here. It all creates a unique environment, a startup hub where the people are really eager to share their knowledge and exchange views. There is a bunch of associations in the town that helps to get all entrepreneurs and communities together. So far, they have been very successful.

One of our Co-Founders promoting A&K Ventures at the "Small Business Expo" in Phoenix

One of our Co-Founders promoting A&K Ventures at the “Small Business Expo” in Phoenix


Networking events are regularly organised in downtown Phoenix

Networking events are regularly organized in downtown Phoenix

What other benefits can you expect when you decide to set up a business in Phoenix?
  • Lower cost of doing business in Phoenix.
  • Super welcome and friendly atmosphere as, in fact, there are not that many aboriginal citizens. The Valley of the Sun is a real melting pot of different cultures and people from around the country.
  • Perfect business climate. Having a press coverage in Europe, Silicon Valley or New York is almost impossible unless you have an unlimited marketing budget. New agencies and local business associations in Phoenix are very supportive and helpful. Everyone helps each other. Local people understand that a success of any company established here will bring prosperity and other success stories to the city. One positive event triggers another, a so-called chain reaction. When having a business in Phoenix, and in a need for a promo article or some link exchanges, simply attend networking events in your neighborhood and send a couple of emails. It will do.
  • In the Valley of the Sun, striking a work-life balance and having something outside of your job is nothing unusual.
  • Great outdoor activity possibilities. You can go hiking, fishing, cycling, fishing, tubing or rock climbing. Pristine and indigenous nature is all around, waiting for you.
  • Great international and national transport links which enable you convenient, fast, and affordable business trips. Efficient infrastructure which means a total lack of traffic.
  • Great opportunities and getting an access to big players that operate in Arizona’s native market. Companies from the aerospace, heavy production and furniture industries.
A&K Ventures at the "Cyber Threats" workshop organized by Galvanize (presenter: Special FBI Agent, Paul Shaaf)

A&K Ventures at the “Cyber Threats” workshop organized by Galvanize (presenter: Special FBI Agent, Paul Shaaf)


Pristine nature is just 30 miles away from Phoenix downtown

Pristine nature is just 30 miles away from Phoenix downtown

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Source: 12newsMoneyTree ReportPricewaterhouseCoopersWikipedia.