Each year, Inc. Magazine puts out its list of the 5,000 fastest growing companies in America. Think of it like the Forbes 500 (largest US companies) for startups. To be on this list is prestigious and it means your company is doing something right and growing at warp speed. In 2020, the #1 company on the list — the fastest growing company in America (OneTrust) — grew at an astonishing 48,377 percent over the last three years. Yeah, that’s hyper growth.
But how did local companies do? Where did Fort Worth-based companies come out on this list? How did we do as a county? As a Metroplex?
First, let’s explain what the Inc. 5000 list is and how it is calculated. Companies featured on the 2020 Inc. 5000 achieved an incredible three-year median growth rate of over 165 percent. As anyone who runs a company will tell you, that is very impressive growth.
Though many people think this list is all about startups, your company must be at least three years old to qualify for the list. So, these aren’t necessarily all startups. Inc. 5000 companies must be private companies and must submit financials to Inc. Magazine over the previous three year period. Those numbers are verified by the Inc. team and then they are ranked according to their growth over that period. Some that make the list are established companies that experience significant growth and some are new companies that grow at an exponential rate, like the second fastest growing company in 2018, Popsockets.
It is also important to note that companies need to apply to be on the list, as opposed to Inc. scouring the financials of hundreds of thousands of companies across the country. This is an important caveat because there are presumably many companies that could appear on the list but don’t because they simply didn’t apply. How many Fort Worth companies would that apply to?
The highest ranking Fort Worth-based company in 2020 was Circle L Solar that clocked in at #176 and grew at an astonishing 2,251 percent between 2016 – 2019.
This list is important because high growth companies create tons of jobs – 663,810 in 2020, according to Inc. Magazine, plus these companies tend to have similar characteristics such as being innovation-led and requiring large amounts of capital. They also represent localized wealth creation as dollars invested and wages are returned to the local economy through purchases by employees.
So how did our area stack up? We added up all of the Inc. 5000 companies from 2016-2019 and found that over this period, 49 Fort Worth companies were featured on the list. Austin had about seven times more companies on the list than Fort Worth did. Dallas had about five times more.
The chart below shows that over the same period, Fort Worth had only about 14 percent of all DFW companies on the Inc. 5000 list.
When the data is further segmented, the number of featured Fort Worth-based companies lags behind Dallas, Plano and Irving and is just ahead of Addison and Frisco, cities that have a much smaller population than Fort Worth.
Predictably, if we just look at Tarrant County from 2016-2019, Fort Worth has the most companies on the list, followed by Arlington, Grapevine, Southlake and Grand Prairie.
Fort Worth is fifth among the five largest Texas cities and even lags behind much smaller cities around the US when it comes to the number of Inc. 5000 companies that are being grown. Even if you consider that not all eligible Fort Worth companies applied, it still leaves us in a low ranking when you consider Fort Worth is the 13th largest city in the US. In a post-pandemic world, this will be an important statistic to monitor as all cities are striving for additional job growth to make up from the job losses coming out of the most recent economic downturn.
Here are a few simple suggestions for how Fort Worth could improve the number of companies on this prestigious list:
- Make improving Fort Worth’s showing a priority in our civic discourse. If we make this a goal, then we can all work together to hit it and improve our number of companies on the list.
- Run a public relations campaign that encourages founders, CEOs and business owners to sign up. Many companies don’t want their financial information shared with Inc. Magazine, but if we show its importance to our city, then perhaps companies will apply in greater numbers. You can’t win if you don’t play, right?
- Create an incentive(s) around the fastest growing company in Fort Worth for the top company on the list or the company who has made the list the most times. This could be a financial prize or it could be a magazine cover, an award at the annual State of the City event sponsored by the Fort Worth Chamber or some other special recognition. Attaching an incentive would make applying worth the effort.
Fort Worth’s lackluster representation on Inc. 5000 list is yet another metric by which our city is falling short. High growth companies are an important part of our economic growth strategy and their impact on our economy should be widely celebrated. These companies represent the employers and job creators of the future and it is important to know who these companies are in our city and how we can help them continue their high-growth trajectory.
Interested in seeing stats on the Fort Worth entrepreneurial ecosystem? Click here to view other data related posts.