Supporting Entrepreneurial Communities in Appalachia
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Building Entrepreneurial Communities in Appalachia Erik R. Pages EntreWorks Consulting Appalachian Funders Network March 28, 2012
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Transcript of Supporting Entrepreneurial Communities in Appalachia
Building Entrepreneurial Communities in
AppalachiaErik R. Pages
EntreWorks ConsultingAppalachian Funders Network
March 28, 2012
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
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?
Copyright 2012 EntreWorks Consulting
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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?
Copyright 2012 EntreWorks Consulting
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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?
Copyright 2012 EntreWorks Consulting
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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
Copyright 2012 EntreWorks Consulting
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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
Copyright 2012 EntreWorks Consulting
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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
Copyright 2012 EntreWorks Consulting
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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. . .
10October 24,2011
The Data: Job Growth in the 1099 Economy
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
Copyright 2012 EntreWorks Consulting
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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
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
Copyright 2012 EntreWorks Consulting
16March 28, 2012
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
Copyright 2012 EntreWorks Consulting
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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
Copyright 2012 EntreWorks Consulting
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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
Thanks!!For More Information:
Erik R. PagesEntreWorks Consulting
www.entreworks.nethttp://www.entreworks.net/blog
Newsletter Sign-Up: http://www.entreworks.net/Newsletter.php
