Creating Entrepreneurial Communities Burt Chojnowski 21 st 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 E 2 : Energizing Entrepreneurship Fairfield Self Examination Edward Lowe Foundation -

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 Management For-Profit Venture Fund Entrepreneurial Support Services Links with Other Venture 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 and Edward Jones Investments

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Burt Chojnowski President, Fairfield Entrepreneurs Association Managing Partner, iaCatalyst Member, Iowa Capital Investment Board Member, Community Vitality Center Board Board Member, Iowa Cultural Coalition Founder of CoolCall.com ©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