The Southeast’s startup ecosystem continues to mature, and the BIP Ventures 2025 State of StartupsSM in the Southeast report year’s data proves it. Across the region, founders are being challenged to build higher-performing businesses on strong fundamentals, investors are deploying capital more selectively, and AI has become the baseline for innovation.
Each year since 2017, BIP Ventures has released its annual State of Startups report, the most comprehensive look at the Southeast’s Innovation Economy. The report is one of the only sources of custom data about startup and funding activity, and the implications for founders and investors building value across the Southeast. The 2025 report highlights a region that continues to mature and influence the U.S. venture ecosystem by trading hype cycles and mega deals for a focus on building sustainable businesses.
We talked with Mark Flickinger, Venture Atlanta board member and General Partner and Chief Operating Officer of BIP Capital, about the annual report and what to expect from Southeast tech startups and private market investors heading into 2026.
What the 2025 State of Startups Report Reveals
Since 2017, BIP Ventures has tracked the evolution of the region’s entrepreneurial economy. This year’s State of Startups draws from PitchBook data across nine Southeastern states to show how venture capital in the Southeast continues to advance steadily, returning to pre-pandemic deal and funding trends after a period of turbulence.
“We’re seeing a return to growth, back on track in terms of steady, consistent growth from a Southeast perspective.”
— Mark Flickinger, General Partner and COO, BIP Capital
The steady pace of investment and the quality of the businesses capturing that funding reflect a healthier market cycle than we have seen in the past five years. Instead of spreading capital thin across early, high-risk bets, investors in the Southeast are concentrating funding into resilient, proven companies that have demonstrated traction and capital efficiency. In many cases, these companies are already growing within venture portfolios. The result is a stable, sustainable foundation for long-term economic growth across the region.
The Southeast Venture Market is Balancing Out
One of the key takeaways from the 2025 venture capital report is that the Southeast venture ecosystem has found its rhythm. Deal counts have leveled off since the surge from 2020 to 2022 to closer to the kind of activity seen before the pandemic, but the average size of the checks funding those deals has increased by more than 45% since 2018. This trajectory signals a market that is confident, disciplined, and focused on growing companies with real traction and staying power.
“Fundamentals never went out of style—unit economics, real problems, rational solutions, and traction.”
— Mark Flickinger, General Partner & COO at BIP Ventures
For founders, the deal compression and focus on maturity mean that opportunity still exists, but competition for funding and the performance bar are both high. Investors are looking for growth-ready startups willing to build in the Southeast and demonstrate continued proof of growth, traction, and a market.
AI and Startups 2026: Table Stakes, Not a Differentiator
One of the biggest themes in the 2024 State of Startups was that AI had moved from novelty to necessity – from toolbox to tool. That trend has only become more real in 2025. The most successful Southeast tech startups are not using AI as a headline; they are embedding it into products, workflows, and operations to gain efficiency and defensibility.
“AI is table stakes… either in the solution or to run the business more efficiently.”
— Mark Flickinger, General Partner & COO at BIP Ventures
This aligns with national startup investment trends, but in the Southeast, we’re seeing it paired with the region’s trademarked practicality. Founders who treat AI as an operational advantage, not a marketing tactic, are positioning themselves for sustained success. Those who do not integrate AI are sitting on the sidelines.
Sectors Leading the Southeast Innovation Economy
According to the report, three industries continue to dominate capital inflows across the region:
- Information Technology (B2B SaaS)
- Healthcare Tech
- B2B Services
These sectors reflect historical Southeastern industry strengths, which are fortified by repeat founders, enterprise buyers, and a deep bench of operator talent.
“Success begets success—experienced founders and investors compound advantages here.”
— Mark Flickinger, General Partner & COO at BIP Ventures
It’s not surprising that many Southeast tech startups are leveraging these regional, capital, and institutional strengths to scale efficiently.
For founders hoping to attract investor attention, success starts with clarity and storytelling. Want to attract investors to your company? Learn what makes a great pitch.
Why the Southeast Model Works
Beyond capital and sectors, the 2025 State of Startups shows that the region’s measured, tranche-based funding style gives entrepreneurs time to prove traction and grow at a healthy pace without overextending themselves with unreasonable valuations.
“The Southeast’s disciplined model raises success probabilities and preserves founder ownership.”
— Mark Flickinger, General Partner & COO at BIP Ventures
This approach is supported by a unique ecosystem: Fortune 500 customers headquartered locally, world-class universities fueling the talent pipeline, and a cost of living that keeps burn rates in check. It’s no wonder more investors are turning their attention to venture capital in the Southeast for long-term, rational growth.
Founder Takeaways for the State of Startups
The 2025 State of Startups report is clear: success in today’s market comes down to diligence, metrics, and adaptability.
“Don’t chase 2020–2021 valuations. Focus on fundamentals and align with today’s market.”
— Mark Flickinger, General Partner & COO at BIP Ventures
For founders, that might mean raising smaller, milestone-based rounds and putting the measurements in place to demonstrate ongoing traction. For investors, it means leaning into funding models that can weather shifts in the market and putting more follow-on capital into proven operators.
The Southeast’s steady hand and data-backed rigor are proving that sustainable growth does not have to mean slow growth. It simply means smart growth.
BIP Ventures and Venture Atlanta: Partners in Growth
BIP Ventures’ connection to Venture Atlanta runs deep. As a long-time sponsor and investor in several VA pitch companies, the firm has helped shape the conference’s continued relevance to both founders and investors.
“Venture Atlanta is the can’t-miss Southeast conference, efficient for meeting founders, investors, and partners.”
— Mark Flickinger, General Partner & COO at BIP Ventures
Mark Flickinger also serves on Venture Atlanta’s Board of Directors, contributing to programming that evolves with the region’s startup ecosystem.
Together, we share the same mission: to elevate the Southeast as a national innovation hub.
If you’re a founder or investor building in the region, explore Atlanta’s growing startup ecosystem to see why the Southeast is thriving. Now, let’s get into the report’s exciting finds!
Download the Full 2025 State of Startups Report
The BIP Ventures report offers a detailed look at states in the Southeast, with VC funding insights starting in Q3-Q4 of 2024 through Q1-Q2 2025. It’s a must-read for investors, founders, and anyone tracking Southeast venture capital trends!
You can explore the complete findings and data visualizations in the full BIP Ventures State of Startups report.
