berea talk march 2012 2

Supporting Rural Entrepreneurs:

What Do We Know?Erik R. Pages

EntreWorks ConsultingAppalachian Funders Network

March 28, 2012

Copyright 2012 EntreWorks Consulting

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Entrepreneur Focused: Meeting entrepreneurs where they are; responsive to their demand

Pipeline Approach: Wide and deep mouth of the pipeline; Process for moving through the pipeline

Not Another Program: Holistic; interconnected• Collaboration among Resource Providers: Offers

“no wrong door” and leads to “hard referrals” Hub: Someone making Connections; “Network

Weaver” Regionally Asset-Based: Connected to

Community and Regional Assets(Source: Deborah Markley, RUPRI Center for Rural Entrepreneurship)

March 28, 2012

The Big Picture


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What are We Trying to Do?

START: Spur New E's

INFORM: Train

"Better" E's

GROW: Build "Better"

Businesses

PROSPER: Create

Wealth & Jobs


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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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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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Accelerators◦Tend to be for-profit◦Work via Boot Camp Model◦Start Fast, Fail Fast

Examples◦Tech Stars (www.techstars.com)◦Y Combinator (www.ycombinator.com)◦DreamIt Ventures (www.dreamitventures.com)

Growth Services Models: Accelerators

March 28, 2012

http://www.techstars.com/

http://www.ycombinator.com/

http://www.dreamitventures.com/


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The Business Innovation Factory Genome (www.businessinnovatonfactory.com)◦ COLLABORATE

Connect across sectors and disciplines◦ INSPIRE

Link entrepreneurs to new possibilities every day◦ TRANSFORM

Tweaks Won’t Do Experiment daily to create a wholly new vision

March 28, 2012

Business Model Development

http://www.businessinnovatonfactory.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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Often used to refer to general approach that focuses on nurturing “home-grown” businesses.

In reality, it refers to deployment of a targeted set of services focused on business growth. ◦ Focused on “Second Stage” Firms (those with 10-99

employees) These include:

◦ Information◦ Infrastructure◦ Connections

March 28, 2012

Growth Services: Economic Gardening