Engineering a Community of Entrepreneur
Warren Buffett, Bill Gates and Mark Zuckerber serve as prime examples that entrepreneurship can be a very lucrative career choice. In 2011, The Kauffman Foundation estimates that the 11.9 million self-employed business owners in the United States represent only 6.5 percent of the adult population. With so much to be gained in starting a business, why is it that most Americans decide not to pursue a life as an entrepreneur? Simple answer: lack of talent, knowledge and risk.
Talent development has become a centrifuge for investment firms and individuals looking to maximize ROIs from their investments. The magnitude of great ideas has left investors overwhelmed to spend too much attention on funneling funds on many great ideas.
A focus on creating entrepreneurs has caused the formation of incubators in all sectors, from medical to agriculture. According to the National Business Association (NBIA), in 1997 there were roughly 550 identifiable incubators in the United States. In 2006, NBIA estimates 1,115 incubators, doubling the amount in less than a decade.
Jorge Gonzalez, Director of Economic Development for LINC, a community revitalization organization and business incubator, notes that incubation does not begin and end with business owners. Community development is at the forefront of LINC’s initiatives. He goes on to explain that, “[LINC] is doing activities that are impacting business owners, changing neighborhoods one at a time and, most importantly, changing people’s lives for generations to come.”
LINC is a nonprofit organization that aims to revitalize neighborhoods through stimulating economic development, creating affordable quality housing, and developing the capacity for leadership in residents and grass-root organizations. As part of LINC’s commitment to economic development, the organization offers both a business incubator and co-working space for emerging entrepreneurs.
Incubation is a great solution to help entrepreneurs in this turbulent economy, where investors are allocating funds in higher amounts on fewer ideas. It is essential to invest not only on the product or service, but on the leadership team. “The lack of access to capital for small business owners is still a big issue and impediment,” notes Jorge. He predicts that successful incubation programs will be the wave of the future to ensure sustainability of small business owners and entrepreneurs.
Research conducted by the National Venture Capital Association, has found that the amount of seed funding has gone down from $1.73 billion in 2008 to $1.7 billion in 2010, representing a decrease of 2 percent. While that may not be alarming, it is worthy to note that in those years, the number of deals in the seed stage of investments dropped from 511 to 364. The 30 percent decline illustrates a shift in investment strategy of venture capital firms towards later stage investments. At that point, ventures represent a solid plan, experience and talent.
Entrepreneurs are not created in the way an accountant is formed. Entrepreneurial curriculums range from a consultation approach to deeply engaged incubations that focus on more than ROIs, but also focusing on social entrepreneurship, measuring things like community development.
LINC offers individualized mentoring and determines a set curriculum for each business owner based on individual needs, including a calendar of workshops and trainings put on by the Michigan Small Business & Technology Development Center, the West Michigan Hispanic Chamber of Commerce and Grand Rapids Opportunities for Women.
Currently, LINC has 10 businesses incubated, and about 10 more working their way through the training program that are not incubated, as they have no need for physical space or are already existing businesses in the neighborhood. LINC expects to duplicate the success throughout Southtown, and have plans to open an incubator on Grandville Avenue by next year.