Helping Start-Ups With Local Support and National Networks

/// Helping Start-Ups With Local Support and National Networks

February 8, 2013  |  Blog

When Will Fuentes planned an extended business trip to Seattle last year, he tapped into the local chapter of a national networking group there. Within hours, Mr. Fuentes, who founded the Arlington, Va., software company Lemur Retail, had secured a work space, introductions and even restaurant recommendations via the group, the Startup America Partnership.“Before I flew out there, I already had five or six meetings set up with potential clients and other key contacts, as well as one potential acquirer,” Mr. Fuentes said.

A couple of years ago, entrepreneurs would have needed several trips to make similar connections outside their own cities. Even in this era of social networks and venture conferences, start-ups are still surprisingly disconnected on a national level.

“Each region has its ties, but in many cases, entrepreneurs are operating in silos,” said Carolynn Duncan, the chief executive of Portland Ten, a mentoring program for early-stage companies, mainly in Oregon. “An entrepreneur in Oregon doesn’t have an easy way to network with entrepreneurs in Washington D.C.”

Startup America, a nonprofit organization with an all-star cast of deep-pocketed backers, is trying to bridge the gap. The organization, which was started in January 2011 as the brainchild of AOL’s co-founder, Steve Case, and the Ewing Marion Kauffman Foundation, wanted to bring a private-sector support to start-ups — without financial strings attached.

“Supporting start-ups throughout the country is the only way to make sure the American economy is firing on all cylinders,” said Mr. Case, who is the chairman of the partnership.

Start-ups are a crucial driver for job creation in the United States. From March 1994 to March 2010, businesses less than one year old created 3.9 million jobs a year on average, according to the Bureau of Labor Statistics, though that number has declined during the recent economic weakness.

The Small Business Administration and United States Chamber of Commerce have long been a resource for start-ups, but these government agencies have a broad mandate. There is a “growing recognition,” said Mr. Case, that high-growth start-ups — those with the potential to be national or international companies — have different needs and requirements than traditional small businesses.

Startup America’s initial focus was to provide support to start-ups through deals on goods and services, like 40 percent off FedEx shipping and free flights on American Airlines. But the group quickly realized that start-ups needed more practical help, like sharing best practices and networking.

Soon after the partnership’s start, entrepreneurs around the country starting contacting Startup America, asking how they could create their own networks and reach out to counterparts in other states. “Most of these regions were already coming up with their own initiatives or thinking about them,” said the organization’s chief executive, Scott Case, a founder and former chief technology officer of Priceline.com (and no relation to Steve Case). “We’re helping to stitch together all these parts.”

Taking cues from the entrepreneurs, Startup America has turned its attention to building such a network. Nearly 12,000 members are now affiliated with local Startup America initiatives in 30 states. The partnership expects to add another 10 states this year.

Each Startup America region is spearheaded by local “champions” who come together several times a year at national conferences, communicate via Google groups and have access to an online “idea center” where they can brainstorm about, say, bringing in outside capital or hosting a start-up conference. These envoys are all “founder types” at different stages of their careers, Scott Case said. “Some have exited companies and are looking to continue to feed that creative drive. Others understand that if they can strengthen their community, they can strengthen their own company.”

Brooks Bell, founder of an eponymous 22-employee digital consulting business based in Raleigh, N.C., became involved with the partnership in 2011 after realizing that many potential clients considered her area a backwater. “I realized that was impacting my company’s brand, too,” she said.

Mrs. Bell pointed out that other national groups, like Entrepreneurs’ Organizations, offer resources for high-growth companies. Yet, their emphasis is typically on supporting individuals rather than elevating the region and networking nationally. “They also tend to focus on early-stage companies,” she said. Until Startup America, she added, “there weren’t a lot of opportunities for early-stage companies to interact with funded companies.”

Though Startup America regions work off the same blueprint, each takes a slightly different approach. In Maryland, the staff and champions volunteer virtually. Startup Tennessee partnered with the Entrepreneur Center in Nashville, which runs a nonprofit incubator program. Startup Colorado works out of Silicon Flatirons, a center for law, technology and entrepreneurship at the University of Colorado Law School, and finds partners to finance specific projects.

Although the regional chapters operate independently, they benefit from the credibility of a national organization. “It’s helping elevate our start-ups nationally and get them in front of audiences we never would have,” said Andy Stoll, an entrepreneur in the Iowa City, Iowa, area, where rebuilding from the floods in 2008 has helped generate a boom in start-up activity.

“To have the opportunity to sit in a room with their board and have Steve Case ask me, ‘What are the three things that those of us at this table can do to really help support the Indiana community?’ is amazing and a humbling experience,” said Michael Coffey, a partner at DeveloperTown, an Indianapolis design and development firm that works with companies of all sizes.

In the end, it’s all about business.

Aaron Schwartz, a co-founder of the San Francisco-based Modify Watches, initially joined Startup America for the discounts. Now, he’s also tapping into the partnership to network, including finding corporate clients who order custom watches and vendors. “I now have a contact in Tennessee who has offered to look into manufacturing our watches there,” he said

Mr. Fuentes of Lemur Retail found two potential clients, both national chains, through his connections in Seattle last year; he’s currently in talks with those companies. He’s also helping his Northwest counterparts make inroads in the Washington area. He likens the experience to a fraternity or alumni organization of entrepreneurs.

“When people contact me from my high school or college, I pick up the phone,” he said. “This is no different.”

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