NEW ORLEANS (AP) When Derrius Quarles was looking for a new headquarters for his Chicago-based startup, New Orleans wasn't the only city on his list.

Quarles, cofounder of Million Dollar Scholar, also considered New York, Philadelphia and Atlanta as places to grow the online platform he created to help college students secure financial aid.

His participation in an entrepreneurship program sponsored by PowerMoves.Nola, a group focused on attracting minority-owned businesses to the city, helped settle the issue. Quarles moved his one-and-a-half year old company to New Orleans earlier this month, aided in part by a five-figure investment from PowerMoves.

"It became very clear this city is very ripe for innovation, and education is one of the sectors receiving a great deal of attention and resources," Quarles said. "We just thought we were a really good fit."

A burgeoning entrepreneurial community eager to provide support, along with a variety of economic incentives and lower business costs, are prompting early-stage companies to move to New Orleans, according to their owners.

Economic development leaders say more financial investment and workforce are needed to keep them here.

From 2010 to 2012, the rate of business startups was 56 percent higher in metro New Orleans than the national average, according to The Data Center.

Four businesses are moving to the city from other states this summer and fall, spurred in part by PowerMoves' recruiting push. Officials there and with the New Orleans Business Alliance say at least five other viable candidates are seriously considering relocation plans.

Luke Cooper said he's planning to move the Baltimore, Maryland, headquarters of Asurvest, an online marketplace for insurance products, in October. Cooper, who participated in a PowerMoves.Nola boot camp and received $50,000 from the group, said the move is "primarily opportunity-driven."

"We wanted to be in an environment where we have access to talent and also some level of support from the city and level of interest in our business. We saw that at PowerMoves," he said.

PowerMoves.Nola this year has spent $200,000 on a half dozen early-stage companies that started in the city or have moved here. It has awarded additional money in scholarships and pitch competitions.

Other startups say state incentives and local support helped them make the move. At least three of those relocated from the East Coast into the New Orleans BioInnovation Center, including Crutcher Reiss and his wife Sarah, owners of myMix Nutrition, a dietary and supplement e-commerce platform.

Reiss, who grew up in New Orleans, said he was lured from New York City by incentives such as a tax credit that gives cash rebates to startups that create new jobs or spend capital in certain areas.

His company operates at a lower cost in the BioInnovation Center, and a BioFund loan program offers him lower rates on financing administrative expenses, equipment, refurbishments and general inventory.

Instead of paying $3,600 per month to work and live in a 450-square-foot New York City apartment, the couple spends $1,900 monthly for a wet lab and office space in New Orleans that are almost double the size. They also plan to attend an accelerator program this fall sponsored by The Idea Village, one of several local organizations that offer help to early-stage companies.

"With the incubator-style facility we are in, the accelerator program and the state tax credit environment .. that trifecta was more robust than we saw in a city anywhere else," Reiss said.

Aaron Walker's nonprofit fellowship program for early-stage social entrepreneurs, Camelback Ventures, didn't qualify for incentives when it moved from New York last month. But he said "the general entrepreneurial energy" that he saw while working with 4.0 Schools and participating in New Orleans Entrepreneur Week steered him to New Orleans.

"When you're trying to accomplish really big things, local commitment is important," Walker said. "Knowing there's political will around the issue is an important factor in tipping the factor toward New Orleans."

The city's popularity presents some challenges, though, including how to raise enough money to retain the new businesses. When it comes to early stage investment, Louisiana ranks 41st in the U.S., according to a 2010 PricewaterhouseCoopers/National Venture Capital Association MoneyTree Report.

"Some companies are being born here but moving somewhere else into adulthood," said Michael Hecht, CEO of the economic development organization Greater New Orleans Inc. "We have to continue to attract more institutional funding in Louisiana."

Finding enough workers can also be difficult, particularly in technology sectors, he said. And although the city has recently topped some favorable lists, its perception as a party town remains a problem, Hecht said.

"We spend a lot of our time trying to explain that this is a place you can come for not only a long weekend but also a long company," he said. "That is a challenge that we have, from startups all the way up to Fortune 500 companies."

Besides raising money, connecting early-stage companies to resources and people who will help them is paramount, said Leslie Jacobs, founder of PowerMoves.Nola and CEO of the New Orleans Startup Fund.


Information from: New Orleans CityBusiness,