Entreprenuership: Enhance Access to Capital and Business Mentorship & Training
Challenge Advancing a Robust Entrepreneurial Ecosystem
Startups are a critical component of any vibrant and healthy region. New businesses create jobs, drive market competition, and lead to a stronger economy and higher standard of living. Inevitably, with entrepreneurship comes a great deal of risk. According to data from the Bureau of Labor Statistics, 50% of small businesses fail by their fifth year. Research conducted by the Valley’s Innovation Council (VIC) revealed that Region 2 is lacking access to critical early stage capital and other pertinent resources necessary to help entrepreneurs survive and thrive when launching a new business. A robust entrepreneurial ecosystem, with access to funding and leadership to help business owners navigate their path, is central to helping start and grow new businesses in the region. That’s when the challenge begins.
The Solution GO Virginia, Virginia Initiative for Growth and Opportunity
GO Virginia Region 2’s Growth and Diversification Plan highlights a need to “strengthen entrepreneurship and business development, which includes growing the presence of and access to capital investors, expanding and better coordinating programs for mentorship and business training, and improving awareness of existing capital, mentorship & training resources.”
As of Fall 2019, GO Virginia Region 2 has funded the following projects related to entrepreneurship:
- Valley’s Innovation Council’s Capital Ecosystem Landscape Report
- Increasing the Birth Rate of New High Growth Companies
- Regional Acceleration and Mentoring Program (RAMP) and Cohort 3 Funding
- Roanoke Regional Small Business Development Center (SBDC) Expansion into the New River Valley
Research Begins with the Valley's Innovation Council (VIC)
VIC is an organization formed in 2018 to help startup technology companies launch and thrive in the Roanoke and New River Valleys. Through GO Virginia funding, VIC conducted a study examining the region’s availability and access to the various types of funding necessary for the support of startups at all stages. In particular, the study focused on how GO Virginia Region 2 compares in access to grants, angel investment and venture capital to similar regions. The purpose of the study was to first assess the current landscape and then outline strategies to improve and grow the innovation economy and footprint in Region 2. The study reinforced what many of the VIC council members already knew; there is a gap in the access to funding necessary for a robust and effective entrepreneurial ecosystem. In 2018 when the study was conducted, there weren’t any formal angel networks. While Small Business Innovation Research programs (SBIRs) where supplying significant funding, Region 2 companies raised far less investment capital from angel, seed, and venture capital sources. Similarly, the region wasn’t successfully helping entrepreneurs understand its available funding and consulting resources. As a result of the survey, four comprehensive strategies were outlined to help address the gap.
- Organize and sustain a managed angel investing group to systematically connect founders and investors.
- Leverage federal early-stage commercialization grant funding (SBIR/ STTR) with additional commercialization programming (such as I-Corps) to foster firm development.
- Increase connections between angel groups, venture capital sources and fundable firms, regionally and nationally.
- Task Valleys Innovation Council to monitor capital access issues for highgrowth startups in Region 2, develop strategies to assure access to the continuum of capital sources, and consider further research into the sustainability of the regional capital ecosystem.
The Advancement Foundation Launches the Mill (TAF)
TAF leverages business resources, entrepreneur resource partners, industry experts, and higher education partners to increase business readiness and success rates for new, high growth companies. The goal of TAF is to expand the regions entrepreneurial pipeline capturing new and early stage companies. With the help of GO Virginia funding, TAF launched Innovation Mill (The Mill). This is a new program designed to fill a critical gap in support services for early stage startup companies with high growth potential. Experts at The Mill help companies advance innovation by providing 360 evaluations, business innovation and development teams, customer discovery, industry expertise, higher education resources, and access to early stage funding. Cohorts at The Mill are accepted on a quarterly basis, allowing the organization to assist a total of 20 new companies, five per quarter. As an example, IVO, LTD. was also a previous winner of TAF’s Gauntlet program, Virginia’s largest business program and competition. Located in the Alleghany Highlands, IVO’s founder, Richard Mansell is developing a novel technology product that utilizes Capacitive Based Aerial Transmission (CBAT) to send electrical power wirelessly between a power source and a receiving device, untethering electric devices from power cords and bulky batteries.
As of Fall 2019, The Mill has assisted five new and early stage companies, assessed nearly a dozen more, engaged six mentors to assist the participant companies, and referred two of those participants to next stage programs.
Cohort for the Regional Accelerator and Mentorship Program (RAMP)
RAMP was created to help high-potential startup companies in the STEM-H field expand and create new jobs within the Roanoke-Blacksburg region. This highly focused program was the result of a strategic partnership between the City of Roanoke, Virginia Western Community College, and the Roanoke-Blacksburg Technology Council (RBTC). Now in its third year, RAMP assists entrepreneurs in scaling up their companies by providing them free office space, a 12-week intensive program where they are provided access to experienced mentors to help them work through business challenges, as well as $20,000 to assist with business needs. Each year’s cohort consists of five STEM-related companies that are in various stages of growth. The prerequisites are that the STEM company must have at least two founders and a minimum viable product. GO Virginia was critical to the funding for 2019 Cohort 3 which included organizations ranging from online event ticketing, prescription soil management, autism awareness and training, high-tech frequency components, and retail pricing software utilizing artificial intelligence and blockchain technologies. Laura Godfrey, one of the founding members of Point 93, the retail pricing software company, isn’t new to the volatile world of entrepreneurship. Laura previously owned Claire V, a retail handbag store, Polished, a nail spa, and Left Brain/Right Brain, a data management and creative messaging company. Even with her previous experience, she found the time and experience at RAMP to be a great resource to help her focus on her business goals.
Roanoke Regional Small Business Development Center (SBDC)
The Roanoke Regional SBDC provides no-cost consulting services to small business owners and entrepreneurs on topics ranging from business and marketing plan development, permits and licensing, strategic planning and in the area of accounting, legal entities, taxes, and financial management. In 2018, the center provided more than 1,100 hours of counseling to its 300 clients, 40 percent of which are new businesses. The 18-month funding awarded by GO Virginia has allowed the SBDC to more fully expand its services into the New River Valley. Along with collaboration and assistance from Onward NRV, the grant allowed the SBDC to create a new position. Cheryl Tucker was hired in February of 2019 and serves the region through a central office at Radford University and from satellite offices at the Virginia Tech Corporate Research Center, and the Floyd Innovation Center. In 2019, the SBDC provided counseling services to 25 clients, assisted with the launch of two new businesses, and created 17 new jobs. The office at Radford University is located in Kyle Hall at the Venture Lab in the business school. The university touts it as a business incubation space where students have access to faculty support, virtual reality and 3-D printing tools. The SDBC provides the next level of support when they’re ready.
GO Virginia’s critical support at the regional level, along with the hard work and dedication of those passionate about the development of a robust entrepreneurial ecosystem, allows Region 2 to take great strides in achieving its goal to build a capital network and develop an entrepreneurial pipeline. While the impact is just beginning to be seen, the stories of success are already well underway.