To create more deal flow, Iowa needs to find ways to fill the pipeline from beginning to end with more entrepreneurially minded Iowans that are considering ventures leading to sustainable growth businesses. As with any organization, to realize improved deal flow is the results of the culmination of work that came prior. If we want more out of the end of the funnel, that being more growth based businesses, we need to increase the number of individuals at the beginning of the process thinking of starting a new business. Please see the attached diagram of Entrepreneurial activity.
We believe that many of the answers lie with-in the Battelle report; Growing Iowa’s Entrepreneurial Economy: Strengthening the Entrepreneurial Support Infrastructure. We have chosen to put this into a practice model identifying short, intermediate and long term solutions, those that then have immediate and longer lasting impact. For instance, some solutions cannot be measured today but can have a major impact in the future, 5 and 10 years hence. (Educating our Youth in Entrepreneurship from an early age. This is an important point for legislators to grasp.) Others can have a more immediate impact like a strong effort towards legal immigration to the state of highly motivated people seeking the American Dream. It is a fact that immigrants are more highly entrepreneurial and risk takers than our now indigenous population. Increasing immigration helps alleviate labor shortages and increase entrepreneurial start up businesses.
In the Short term we have several tools for Entrepreneurs that could be implemented or expanded for more immediate results.
¨ Make capital available at all stages of development: Tax Credit for Community based seed funds (This is critical in loosening the purse strings and setting a tone for some “risk taking” by Iowans. It was successful initially, but needs to be open ended to continue to attract capital and businesses. Many businesses have been financed through the Community Based Venture Funds and their existence has attracted businesses to our regions that in some cases took no financing from them), Microfinance programs and V.C. Funds need to be made available to start ups of all sizes and stages, not just for those with high immediate wages and related jobs. The decision tree should be more dispersed rather than centered in Des Moines. For instance, some decisions should be able to be made and dollars committed by the Accelerators below a certain threshold. Larger commitments would still go through State IDED.
¨ Increase focus, Scale and intensity of support for Entrepreneurs and start-up companies: Provide high quality business plan programs statewide such as FastTrac®, and require certain businesses to complete appropriate courses prior to receiving funding. Funding to buy down the costs of these programs can be delivered by the SBDC or in cooperation with Accelerators is important and not a high dollar item, though a high value output is obtained. The Iowa Entrepreneurial Consortium (IEC) had administered this statewide and could do so again with proper funding and coordination.
¨ Address need for talent by attracting and cultivating entrepreneurial talent: Welcome high-skilled legal immigrants and recruit foreign students who earn degrees in science, math, or engineering at U.S. universities. Current research indicates that immigrants are founding or co-founding fully one-quarter of high-tech companies.1 Marketing Iowa to entrepreneurs elsewhere, within the US and outside the US about Iowa being the Entrepreneurial State, and listing programs like the JPEC’s, Accelerators, VentureNet, etc. is the key. Only the state can provide the kind of marketing clout to attract people to start their companies here in Iowa and we haven’t done enough to explain the advantages offered by the numerous programs already in existence here.
¨ Leveraging Iowa’s base of large corporations to encourage the creation of spin off companies and provide a market for Iowa’s entrepreneurial companies: For this to happen there needs to be incentives for companies to invest into research and development in order to have the innovative ideas that may will lead to spin off companies. Simply going around and asking who has any latent technologies will get a few business concepts into the pipeline, but to create a culture of entrepreneurial spin-off there needs to be incentives for companies to invest into a research and development mode.
¨ Increase focus, scale and intensity of support for Entrepreneurs and start-up companies: Improve structure for rural incentives and business support services
Middle Term tools
¨ Leveraging Iowa’s base of large corporations to encourage the creation of spin off companies and provide a market for Iowa’s entrepreneurial companies: Create a Corporate Entrepreneurship training program to motivate business to innovate and commercialize technology (VentureNet Iowa can provide networking, but the NIACC JPEC in cooperation with consultants from MIT and elsewhere has partly completed such a corporate training program. It should be completed and implemented through the training programs of the community colleges, some funding for worker training can come from 260E and F monies at the CC level.) The result of Corporate Entrepreneurship training will be more robust companies in Iowa and greater invention and spin off activity from our current businesses.
¨ Promote an entrepreneurial culture in Iowa: Implementing Entrepreneurial education programs for K-12 (example: Entrepreneur for a Day program, Marketplace and expanding the Jacobson Institute.) In order for Iowa to change culture in the long term, Entrepreneurship must be imbedded in the schools K-12. NIACC for example has a Copyright pending program called Entrepreneur for a Day (E4D) which stimulates creative thinking, meets the “No Child Left Behind” education standards required by the state and helps children understand they can make a career out of their passions. Giving students an education in entrepreneurship early, will help increase future generations of entrepreneurs. We already have seen evidence of that in North Iowa. By doing providing entrepreneurism as an alternative “employment”, they can live anywhere, especially Iowa!
¨ Make capital available at all stages of development: Gap Financing
Long Term tools
1. Promote an entrepreneurial culture in Iowa: Education K-12 – Improving Math, Science, and Entrepreneurial Skills. While listed in the Mid Term Solutions, it is envisioned that this program would start in the short term but the results would be in the 5-10 year or longer time frame as the population becomes more “entrepreneurially oriented as a result of training and understanding entrepreneurship.” University of Iowa and Iowa State both have programs that have been developed and utilized by senior high and middle school students respectively. These programs combined with NIACC’s E4D program can educate seamless programming and continuity throughout Iowa helping transform Iowa into the “Entrepreneurial State”.
2. Address need for talent by attracting and cultivating entrepreneurial talent: Management Talent Network. This is an important piece and role that IDED can play in identifying qualified individuals to take a role in a start up company that we are working with that needs talent, CEO’s, CFO’s, marketing, sales, etc. to succeed. We need a talent pool of native Iowans and people willing to relocate to Iowa to take on the leadership and direction of some of our start up companies where that experience and knowledge doesn’t yet reside, taking an equity position, in lieu of compensation in some cases. Many of our start up companies just do not have the talent to take them to the next level. This type of initiative could create stronger growth in companies and in migration of Iowans back to Iowa.
Increase focus, Scale and intensity of support for Entrepreneurs and start-up companies: Meeting Entrepreneurs where they are at:
3. Provide young entrepreneurial Companies with high level sales training program. (NIACC is developing such a program currently.)
4. Quality Entrepreneurial Network Exchanges throughout the state
5. Address need for talent by attracting and cultivating entrepreneurial talent: Management Networks of Talent
– Growing Iowa’s Entrepreneurial Economy: Strengthening the Entrepreneurial Support Infrastructure