Supporting Entrepreneurial Communities in Appalachia
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Transcript of Supporting Entrepreneurial Communities in Appalachia
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Building Entrepreneurial Communities in
AppalachiaErik R. Pages
EntreWorks ConsultingAppalachian Funders Network
March 28, 2012
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Copyright 2012 EntreWorks Consulting
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Rural Entrepreneurs: Slow and Steady◦ What is Impeding Growth?
How can we help spur growth? What else is needed? Linkages to Leading Sectors and Clusters Questions??
March 28, 2012
Our Topics
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Copyright 2012 EntreWorks Consulting
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The Facts!!! Entrepreneurs are your future engines of prosperity.
You Have No Choice!! Can’t keep “waiting for Superman.”
Entrepreneurs are the backbone of rural America◦ At least 11% of US adults are trying to start a
business◦ Up to 1/3 of rural workers may be self-employed
by 2015
March 28, 2012
Why Rural Entrepreneurship?
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Rural start-ups are prevalent and do not look much different from start-ups located in other parts of the US.
Most firms – both urban and rural – start small and stay small.◦ Rural firms are more persistent. They tend to have
better survival rates than other firms. ◦ But, survival does not equal prosperity. These persistent
firms tend to grow slower, create fewer jobs, and generate less spin-off benefits than their urban counterparts.
Rural firms that do achieve fast growth tend to lose any distinctive characteristics.
March 28, 2012
What Do We Know About Rural Entrepreneurs?
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Slower rural growth rates seem to result from: ◦ A mix of natural competitive disadvantages
E.g., Smaller home markets◦ Concentration in lower growth sectors◦ More restricted access to business growth
services Sophisticated coaching/mentoring/consulting Diverse equity capital pools Diverse Peer Networks
March 28, 2012
What is Impeding Growth?
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From Incubation to Acceleration
What We Do Now: Incubate!
What We Should Do: Accelerate!
Typical Services:◦ Coach Start-Ups◦ Develop Biz Plans◦ Make Traditional Loans◦ Help Lower Costs
Incubators Tax Credits Training Subsidies
Growth Services:◦ Expand Markets (e.g.
exports)◦ Stimulate growth sectors
(e.g. clusters)◦ Link to Global Networks
(e.g. accelerators)◦ Coaching/Mentoring◦ Provide equity finance
(e.g. CDFIs, angels, etc.)◦ Business Model
Innovation
March 28, 2012
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Effective acceleration and growth efforts require similar investments in capacity building that:◦Grow More Ambitious Entrepreneurs◦Provide Linkages to Growth Opportunities◦Provide diverse sources of capital◦Develop more local talent—as entrepreneurs and as
employees.
But . . . .
March 28, 2012
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Build Stronger Peer Networks◦PIPELINE Entrepreneurial Immersion (KS/NE) www.pipelineentrepreneurs.com
◦Maine’s Top Gun http://www.topgunmaine.biz/
Some Potential Strategies to Consider . . .
March 28, 2012
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Engage Students◦ Startup Weekend (http://startupweekend.org/)◦ Awards and Competitions◦ Community Colleges (NACCE President’s
Commitments) www.nacce.com
Engage the 1099 Workforce
March 28, 2012
Embed Entrepreneurship in the Community. . .
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10October 24,2011
The Data: Job Growth in the 1099 Economy
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2011 EntreWorks Consulting December 7, 2011
Support the 1099 Economy
◦Coworking Spaces A New 3rd
Place?
◦ http://wiki.coworking.info/w/page/42355006/Rural%20Coworking
◦ www.loosecubes.com◦ www.opendesks.com
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Develop and exploit new tools for financing◦ Angel funds◦ CDFIs◦ Crowdfunding
Better use of underutilized capital pools◦ Revolving Loan Funds (EDA, USDA)◦ SBA 504 Loans
March 28, 2012
Rethink Local Capital Needs
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SBA 504 Distribution Summary
2008 data Urban Micro RuralTotal number of counties 1,100 688 1,359Counties with 504 loans 738 360 267% of all counties 67% 52.30% 19.70%# of firms in active counties (not # of loans) 4,795,270 406,573 134,720% of firms in active counties 93% 67% 40%Total 504 loan $ million $4,549.0 $441.4 $210.4 Average 504 loan/firm $949 $1,086 $1,562
Urban regions get a larger share of 504 loans; Rural areas have higher average loan per number of firms in the region
There are still capital deserts
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Copyright 2012 EntreWorks Consulting
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Potential Cluster Opportunities
30.20%
23.80%7.90%
7.90%
6.30%
4.80%
19.00%
2011 Southeast Angel Deals: HALO Report
Health Care
Internet
Software (Non-Internet/Mobile)
Mobile/Telecom
Industrial
Consumer Products/Services
Other
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Link current clusters to business opportunities with local anchors◦ Food, Energy, Health Care Services
Workforce Development as Priority Focus for Clusters
Think More Broadly about Sectors Build Rural to Urban Connections
◦ Kansas Opportunity Innovation Network (www.innovatekansas.org)
March 28, 2012
From Clusters to Anchor Institutions
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Entrepreneurs thrive within systems, networks, and interconnected webs◦ But, these systems don’t happen overnight◦ And they are regional, national, and global in
scope: THINK BIG!!
Capacity building begins at home◦ But, it can’t stop at home!
March 28, 2012
A Recap
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Thanks!!For More Information:
Erik R. PagesEntreWorks Consulting
www.entreworks.nethttp://www.entreworks.net/blog
Newsletter Sign-Up: http://www.entreworks.net/Newsletter.php