KEEPING THE TRADITION
Venture capitalist Victor Hwang, co -author of the recently released “The Rainforest: The Secret to Building the Next Silicon Valley,” agreed.
“What we now know is that there are practical tools that we can use to build entrepreneurial clusters or tribes where diversity is respected and to trust and be trusted is expected,” Hwang said.
“Whether it’s Silicon Valley or Memphis or anywhere else, you must create that culture and nurture it to the level that it takes off and begins spreading like a virus.”
Resources
One local effort aimed at boosting entrepreneurship is Seed Hatchery, sponsored by Gatto’s firm and Launchyourcity, formerly Launchmemphis.
Now in its sophomore season, Seed Hatchery operates out of Downtown’s business accelerator Emergememphis and is designed to produce new generations of successful Memphis entrepreneurs.
The highly competitive 90- day venture, which this year received applications from around the world, accepts six seed stage startup companies each year and provides $15,000 in funding, intensive training and mentoring opportunities and the chance for early-stage entrepreneurs to pitch their companies to investors.
And the group is finalizing plans for an investing arm of Launchyourcity — Wolf River Angels — that will formally debut this spring.
The entity will offer Tennessee startups — focusing on those that are high-growth potential, technology-based — from $100,000 to $750,000 in equity capital.
“We’re developing a solid group of investors to provide that sweet spot of capital for startups to help them become successful,” said Eric Mathews, interim executive director at Emergememphis and a Seed Hatchery founder. “To be clear, the goal is success. If all we’ve done for our entrepreneurial ecosystem is to extend the bridge a little further into the canyon, then the fall will just be steeper and harder. We’re dedicated to generating a significant return on investment and return on involvement.”
In just four years, the Launch group has posted admirable results, working with more than 180 entrepreneurs — 25 percent being women and minorities — and helping about one dozen startups receive seed or angel funding.
Additionally, Emerge — which was founded in 1998 — has prepared 50 startups for graduation from its accelerator, and more than 90 percent of those are still in business or have been acquired by larger firms.
Graduated firms currently employ more than 215 workers and in 2010, Emerge’s 27 member companies posted aggregate revenues of $18 million and aggregate revenues for graduated companies topped $26 million.
Similar to Seed Hatchery, but focusing on the biomedical device research and manufacturing sector, is the recently launched Zeroto510. The 12-week entrepreneurial accelerator program was developed by the Memphis Bioworks Foundation and Innova and is affiliated with the Greater Memphis Accelerator Consortium.
In it , six startups will be selected and each will receive $50,000 in seed capital from co -investors Innova and MB Venture Partners. At the conclusion of the program, participants will have the chance to pitch their startups to a coalition of investors and up to three finalists will have the chance to receive an additional $100,000 in capital and an opportunity to present their companies at the 10th annual Musculoskeletal New Ventures Conference that will be held in Memphis in October.
Diversity
There’s also the Mid-south Minority Business Council Continuum, which last year worked with its member minority- and women- owned ventures to secure more than $192 million in business contracts. Since 2008, the organization has helped its members win more than $425 million in contract awards, but leaders think that figure should be much higher.
“Entrepreneurship is critical to communities such as Memphis and to the nation. Unfortunately, our minority- and women- owned business enterprises are not developing as fast at they should be,” said Luke Yancy III, president and CEO of the MMBCC. “We must continue to support business incubators and training programs in our community, increase economic development in our inner city and contribute to a culture that’s conducive to entrepreneurship.”
For their part, leaders at the University of Memphis are on a mission to do just that.
Dr. Rajiv Grover, dean of the Fogelman College of Business and Economics, was instrumental in establishing the school’s “Entrepreneurship MBA” that launched in 2009.
The 21-month course of study combines academic discipline and practical application, and carries with it a tuition waiver and a $6,000 stipend. Students, who are not supposed to work outside jobs during the program, are expected to devote at least 10 hours per week to developing their own startups.
Producing a more educated workforce is the college’s goal, Grover said, and that in turn will add depth to the local entrepreneurial ecosystem.
In addition to the FCBE programs of study, the U of M will open the Crews Ventures Lab by the end of this year. The facility will offer incubator space for students and faculty to pursue entrepreneurial projects.
And the Fedex Institute of Technology, located on the U of M
The goal of promoting entrepreneurship as key to economic development has support from Memphis and Shelby County governments’ top executives.
At a February meeting with more than 100 women and minority business leaders, Memphis Mayor A C Wharton announced plans to promote entrepreneurial development in underserved areas such as Hickory Hill and Orange Mound through creative and nontraditional avenues.
“We’re committed to cleaning up blight, and that means creating safe and vibrant neighborhoods,” Wharton said. “We’re encouraging entrepreneurs to create businesses that address those issues.”
Similarly, other municipal leaders have been vocal about the need to boost such efforts.
At last year’s fourth annual Economic Development Fair that attracted more than 8,000 attendees, Wharton, Shelby County Mayor Mark Luttrell and top officials from Bartlett, Collierville and Germantown emphasized the necessity of providing a fertile environment for entrepreneurial endeavors.
“In the last 10 years there’s been an alarming trend of outward migration of young professionals going elsewhere, and we need to offer opportunities to keep them here so that they can grow our community and move it forward,” Luttrell said.
“We have to start thinking as an urban county and appeal to entrepreneurs who will be able to start their businesses and grow them here.”