Heading into 2020, the startup scene never seemed more vibrant in places outside of the coastal investment hubs of Silicon Valley, New
Heading into 2020, the startup scene never seemed more vibrant in places outside of the coastal investment hubs of Silicon Valley, New York City, and Boston. Colorado, for instance, attracted $2.5 billion in funding in 2019. Then the wheels came off the startup bus because of the pandemic, as businesses everywhere struggled to adjust.
For Rise of the Rest (ROTR), the middle-of-America seed stage investment fund created by AOL co-founder Steve Case, there was an actual bus involved. Since 2014, ROTR, part of Case’s Revolution investment company, has conducted annual bus tours to cities such as Des Moines, Omaha, and Kansas City as it looks for companies to fund and spreads the message that the middle matters. In 2020, ROTR had to park the bus and go virtual like everyone else.
But that doesn’t mean the movement stalled out. In its newly published 2021 Ecosystem Playbook, ROTR offers entrepreneurs and cities best practices in using available resources in a local community to deal with the challenges of operating–indeed, staying whole–during the pandemic. The case studies included in the guide are designed to help local ecosystems develop programs that continue to support their own startup communities.
The playbook broadly outlines three essential components of survival: founder support, funding, and navigation. As they differ in availability from city to city, the advice is to take advantage of whatever you can get in whatever amounts you can get.
In Miami, for instance (one of Inc.‘s 2020 Surge Cities), the community responded with an abundance of founder support in the form of SWOT305–as in Strengths, Weaknesses, Opportunities, and Threats, a mentorship and expert advice platform. It’s the brainchild of Melissa Krinzman of Krillion Ventures and Jamie Nacht Farrell, an entrepreneur with three successful exits. The program is funded in part by the Knight Foundation, which has long had an interest in cities. (The Knight family once published the Miami Herald, among other newspapers.) The program was sorely needed. Some 3,000 small businesses in Miami had closed down by last summer.
SWOT305 was a six-month pop-up that offered entrepreneurs one-on-one coaching as well as a weekly SWOT Swap Meet “where participants could all meet one another virtually, give a five-minute pitch about their company, and make an ask of the group.” The ask could be anything from product feedback to sharing job openings. Minneapolis has tried a similar approach with a program called Fix It Fridays.
When it comes to funding, the JobsOhio Innovation Fund cut right to the chase. Using money from the state’s liquor monopoly, it put up $50 million to get money to early-stage companies so they could survive. These were loans of $250,000 to $3 million. The catch? The money was available only as a dollar-for-dollar match with equity investment. Everyone has skin in the game.
The third prong, navigation, is embodied by the city of Tulsa, which has recently marketed itself as a haven for remote workers. Created last year by an intern at Atento Capital–yeah, that’s why we have them–TulsaResponds was initially launched as a place for locals to make donations and show support. As the longer-term damage began to set in, the platform was restaged as “a one-stop shop for local businesses and nonprofits to find financial assistance for their organizations.” That included helping businesses get Paycheck Protection Program and Economic Injury Disaster Loan funds, as well as local money.
In some cities, two or three prongs of help are available. For instance, in Arkansas, the Northwest Arkansas Council, the region’s economic development arm, served as the fulcrum for organizing founder support, funding, and navigation. It funneled struggling startups to the University of Arkansas’s Small Business and Technology Development Center for free expert advice and helped others secure funding through PPP and EIDL programs. And it shook the big trees for funding, including the Walton Family Foundation and Tyson Family Foundation, institutions with deep local roots.
In Colorado, hard hit by downturns in both tourism and energy, several founders and startup specialists, including Brad Feld, co-founder of Techstars, and Wendy Lea, a founding member of P&G Ventures Studio, got together to form Energize Colorado. They quickly created a platform to ship small loans and grants to small businesses (fewer than 25 employees). The Gap Fund, initially targeted at $25 million, got more than 10,000 applications asking for more than $240 million. Energize Colorado eventually distributed $31 million, using public and private dollars.
Energize Colorado also set up a personal protective equipment marketplace so businesses could get the necessary safety supplies to keep going. And, like other communities, it established an expert help platform, one that included a plug and play “reopening planning template” to help businesses restart.
Clearly, the need is still significant in many cities, and the risk is that the momentum of the pre-pandemic years will be lost. That’s the motivation for Energize Colorado and similar organizations, says Energize Colorado co-founder Feld: “Together, we are building a national model for how public officials, private businesses, and individuals can collaborate, solve problems, and fuel stronger community ties that seek to serve everyone — not just a few.”
This article is from Inc.com