Creating Entrepreneurial Communities

Burt Chojnowski

21st Century Model of Rural Living

Academy on Entrepreneurship October 20, 2004

Fairfield, Iowa

Changing the Culture and Creating A Learning Community

• Center for Rural Entrepreneurship Case Studies and Project Evaluations

• National Incubator Association, National Association of Seed and Venture Capital Funds and E2: Energizing Entrepreneurship

• Fairfield Self Examination

• Edward Lowe Foundation -

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Steps to Create An Entrepreneurial Community

1. Peer Mentoring for Second Stage Companies

2. Create Entrepreneurial Communities Workshop - Mentor Community Leaders

3. Develop Mentoring and Networking Program for Local Entrepreneurs

4. Increase Financing Options and Capital Availability

5. Create A Learning Community

Organic Entrepreneurship

• Changing the Culture to Support Startups

• Re-Define Failure as a Step of Innovation

• Network Approach vs. Agency Approach

• Sharing Wealth of Experience and Wisdom

The CEC Ecosystem

Community-Based Capital

Entrepreneurial Support Services

Peer Mentoring

Early Stage Venture Capital

–Culture of Innovation–Catalyst and Chain Reactions

Entrepreneurs

Where to Start?

Peer Mentoring Programs For “Second Stage” Companies

• Immediate Impact on Economy• Role Models and Mentors for Startups• Angels for Next Generation of Entrepreneurs

The CEC Ecosystem

Community-Based Capital

Entrepreneurial Support Services

Peer Mentoring

Early Stage Venture Capital

Entrepreneurs

Network of 2nd Stage Companies, Serial Entrepreneurs and Service Providers

Power of Startups

• 44% of New Job Creation, only 1% come from Hunting for Plant Relocations

• Tend to be Better, Higher Paying Jobs

• Local Business Ownership is More Stable

Where do the Other 55% Of Jobs Come From?

Accelerating 2nd Stage Companies

Average Results

Extraordinary Results

Good to Great by Jim Collins

Transition Point

Examples of Diamonds in the Rough

• 100 year old Company - 10 years ago – $3 million in Revenues

• Today - Growing 30% in 2004 to $60 Million

Lesson: - Identify and Leverage Your Existing Assets

• 20 year old Company – 5 Employees and $500K Revenues 10 Years Ago• Today – 120 Employees, $70 million in Revenue, $9 Billion Under Management

The Invitation to Create Peer Networking Groups

• 5 Hosts Invite 5 Prospective 2nd Stage Entrepreneurs - Revenue of $500k to $50 million

• 90 Minutes Presentation with Expert Facilitators

• Experience the Dynamics of Insights, Shared Knowledge and Shared Wisdom

• 4 Hour Meeting Once A Month With Monthly Personal Coaching

• Safe, Confidential Environment

• NO COST TO HOST COMMUNITY

In Search of Venture Capital

• Lessons Learned From 1st Rural Iowa Investment Conference– 1. Don’t Use Angel Funds for Economic Development– 2. Lean On Professionally Management Funds for Leadership

• 2002 Farm Bill - Rural Business Investment    Program (USDA)

-Managed by SBA Like SBIC-Not Suitable for Startups

• Invite Regional VC Funds to Iowa to “Participate”    in Iowa Fund of Funds

• 20% Tax Credits for Community-Based Seed Funds and Angel Investment

In Search of Venture Capital

• RBIP and SBIC Not Suitable For Start-ups

• No Iowa Funds of Funds, Yet

• Iowa Equity Fund Association But No True Iowa Early Stage VC Fund

• Regional VC Fund’s Concerned About Deal Flow and Senior Management

• $30 million Needed to Support Professional Management

Entrepreneurial Development Corporations

• 10 Communities - Creating Venture Capital, Mentor Networks and Entrpreneurial Support Services

• Professionally Managed Venture Capital

• Shared Resources Among Communities -

– $25,000 Each for Operations – $250,000 Each for Managed Entrepreneurial Investment Fund

501(c)3 for ManagementFor-Profit

Venture Fund

Entrepreneurial Support Services

Links with OtherVenture Capital

Entrepreneurial Development System

• Mentoring for Community Leaders– Identify Funding Partners - Foundations, Utility Companies– Identify Investors - Angels, Banks, Corporations– Tax Credits and Utilizing State and Federal Programs

• Replicate Fairfield Entrepreneurial Support Model– Mentoring and Networking Programs– Identify High Impact Chain Reaction and Catalytic Growth– Creation of Learning Communities– Financial Literacy for Entrepreneurs and Virtual Incubation

• Magnet for Regional Venture Investment

• Will Help Create 50 New Jobs Per Community Per Year

Fairfield Entrepreneur’s Mentoring Program

• “Power of Peer Networking” for 2nd Stage Companies

• “Creating Entrepreneurial Communities”– Mentoring for Community Leaders

• Retreats• Workshops

• Experts and Seminars for Early Stage Companies– Team Building– Inspiration– Vision– Marketing– Presentations to Investors

Innovative Programs

• Boot Camp for Art-Preneurs– Painting the Business Picture – Learn From Artists Who Created Companies or Made it on Their Own

Saturday, November 6th - 9am - 3:30pm$35 - Fairfield

Special Speakers: – Barry Moltz, You Have To Be A Little Crazy to Start Your Own

Business– Anita Walker, Director of Iowa Department of Cultural Affairs– Cynthia Neib, Executive Director of Iowa Cultural Coalition– Warren Wechsler, How To Sell Yourself and Your Art

Sponsored by:CVC, FEA, Iowa Arts Council, Iowa Cultural Coalition,Fairfield Art Association andEdward Jones Investments

Online Support - CEC News

• Send me your email address to sign up for:

Creating Entrepreneurial Community News List

Burt@iaCatalyst.com

Burt ChojnowskiPresident, Fairfield Entrepreneurs Association

Managing Partner, iaCatalystMember, Iowa Capital Investment Board

Member, Community Vitality Center BoardBoard Member, Iowa Cultural Coalition

Founder of CoolCall.com

Burt@iaCatalyst.com- 641.919.2163©2004 iaCatalyst

Thank You!

Power of Startups

• 44% of New Job Creation Come From Startups

• Only 1% come from Hunting for Plant Relocations

• Tend to be Better, Higher Paying Jobs

• Local Business Ownership is More Stable

Advantages of Small Towns and Rural Area

• Internet and Overnight Delivery Allows You to Locate Anywhere

• Low Overhead, Good Workers Hasn’t Just Leveled the Playing Field For Rural Areas

• Tilted in Favor of Small Towns Because of Quality of Life

Rural Trends

• A Third of New Job Creation Since 2001 was Concentrated in 16 million Population – BoomTown USA

• Where? In 397 Rural Counties with Average Population less than 40,000

• SBA Loan Applications are up 31% in Iowa in 2004; 28% in 2003

• Higher Rates of Return – 200% More Than Metros -

• A Startup Investment Dollar in Iowa = $5 in California