Startup support program off to a Quick Start for Entrepreneurs
08-28-2011
Beginning in September, some northeast Indiana entrepreneurs could receive assistance through a program called Quick Start that will precede an even larger startup support effort to be rolled out next year.
JumpStart Inc., a Cleveland-based nonprofit, has been working for the past year on creating entrepreneurial action plans across northern Indiana. The organization, which helps entrepreneurs with their business plans, invests in companies and matches them with other investors, received a total of $2.5 million in foundation and federal grant funding in 2010 to develop action plans for northeast and northwest Indiana and other Midwest areas that had been affected by the downtown in the automotive industry. It also has been
contracted by the Indiana Economic Development Corp. to establish an action plan for north-central Indiana.
JumpStart has conducted research and met with business representatives from the 10 counties that make up the Northeast Indiana Regional Partnership. Steve Berger, a senior adviser with JumpStart Community Advisors, said the action plan for northeast Indiana is nearly finished. Its completion will kick off a fundraising phase so it can be enacted — possibly as soon as next summer.
In the interim, the Quick Start program will provide assistance to entrepreneurs as the larger program is being put together.
“You can think of Quick Start as being a small version of what we ultimately want to do,” Berger said. “It’s going to start right away and will help us transition into the bigger program over time.”
Quick Start is supported by Elevate Ventures Inc., a nonprofit formed this year to help advance Indiana’s entrepreneurial climate and manage the state-supported 21st Century Research and Technology Fund. Elevate Ventures itself is an outgrowth of JumpStart’s advice to the IEDC on what can be done to support startups across the state.
One of the main features of the Quick Start program, which will be in place across northern Indiana, is its use of entrepreneurs-in-residence. They will advise and assist those looking to start their own ventures, which most likely will be technology-related startups. There will be one entrepreneur-in-residence each for northeast, north-central and northwest Indiana, while a fourth will be devoted to the medical device industry, Berger said. Locally, the entrepreneur-in-residence will be based at the Northeast Indiana Regional Partnership.
Berger said each of the entrepreneurs-in-residence will screen ideas for potential new businesses and perform due diligence. If a particular proposal is deemed viable, the person will work with the entrepreneur to create a plan to attract funding, which could come from the 21st Century Fund or other sources. The entrepreneur-in-residence for northeast Indiana has not yet been selected.
Another focus of Quick Start is “economic gardening,” which provides support to early stage companies looking to advance to the next level.
“With economic gardening you’re looking to find usually smaller companies, perhaps less than $5 million a year in sales, typically younger companies, maybe less than five years of age, who have a really great idea, a good product and a lot of capability, but have not been about to bust out,” Berger said. “And so economic gardening wants to identify those
companies, evaluate what it would take to have them make that next big step and then help them get that.”
He said Quick Start would implement a pilot economic gardening program that would identify about 35 companies in northeast Indiana and evaluate them “to see which ones can take off.”
Karen Goldner, president of the Main Street Venture Fund, which is managed by the Fort Wayne private-equity firm Ruffolo Benson LLC, is working with Berger to craft the entrepreneurial action plan. She said economic gardening is important because it has the greatest potential to benefit the region.
“One of the things that became very clear in the research, due-diligence process (for the action plan) … was we have a lot more opportunities in economic gardening in the immediate term than we do with technology startups,” she said.
The third major function of Quick Start will be to bring angel investors together so they’re exposed to a greater number of funding opportunities and provide resources so they can make more informed decisions about startups in which they might invest.
“It would be nice to be able to have a broader group of angels to be able to provide greater size capital while still spreading the risk among each person. So I think that will be a real plus,” Goldner said.
Berger said a business plan competition might be held to help raise awareness of Quick Start. In addition, the Northeast Indiana Chamber Coalition will promote JumpStart’s IdeaCrossing.org website to chamber of commerce members throughout the region. The site matches startups with resources and potential investors.
Berger and Goldner, meanwhile, will continue work on finalizing the entrepreneurial action plan for northeast Indiana. When completed, it will be used along with the plans for north-central and northwest Indiana to attract national funding for the larger startup support program, which will represent about half of the money needed, Berger said. Elevate Ventures has committed to providing one-third of the funding, with the remainder coming from local sources.
“If you take those three regions and put them together, the scale is a lot more attractive in terms of the number of opportunities to support the resources that are required,” Berger said. “Although northeast Indiana will have its own identity in this, it will get the advantage of working collaboratively, both financially and also in terms of operational resources, across northern Indiana.”