Entrepreneurship has become a critical component of economic development around the world. Entrepreneurs play an essential role in creating jobs, enhancing productivity, driving innovation, and fostering economic growth. However, creating an environment that allows entrepreneurs to get launched and gain traction in order to contribute to the economy can be challenging, particularly in regions that lack access to capital, broadband, and other resources. As an economic developer, building an entrepreneurial ecosystem and taking a look at the local community’s needs can feel overwhelming. Where do startup entrepreneurs even begin? Right away, entrepreneurs need business guidance, access to capital, mentorship, and peer networking opportunities. This is the goal of entrepreneurship-led economic development (ELED): when entrepreneurs are part of an ecosystem with support in place to grant them these invaluable resources efficiently, their businesses and the local economy can thrive.
1. Access to capital
In the beginning, startup founders often need access to capital. Entrepreneurs who aren’t bootstrapped will need access to funding in order to start and grow their businesses. However, gaining that access can be a significant challenge, especially for entrepreneurs based in a location with developing economies, emerging industries, and non-traditional lending sources.
There are programs in place that provide seed funding or grants to entrepreneurs. In addition, there are many private sector organizations, such as venture capital firms, angel investor networks, and impact investors, that can provide funding and other resources to entrepreneurs. So, the capital is there and ready to be funneled to entrepreneurs, but it’s not always so easy as that for entrepreneurs to be able to reap the rewards. Alternative solutions are necessary for those founders who lack banking relationships or the necessary business longevity to qualify for traditional lending. Entrepreneurship support organizations should be that stepping stone in between entrepreneurs and these programs, and economic development organizations (EDOs) should establish relationships with these private sector options and identify non-traditional capital access programs to help open the doors for more entrepreneurs in their local communities. Once that capital has been secured, entrepreneurs need guidance to make the most of that working capital.
In addition to capital, entrepreneurs need mentorship right away. Mentorship can play a vital role in the success of entrepreneurs. Having a mentor who is experienced in the same field or knows the essential business building blocks to get started can provide valuable guidance and support, helping entrepreneurs navigate the challenges they face while starting and growing their businesses. Mentorship programs provide technical support, personal guidance, and advice that will stick with entrepreneurs to launch and throughout any stage of business development. One way to create mentorship opportunities is to connect entrepreneurs with experienced mentors in their industry.
Many entrepreneurship support organizations, such as accelerators and incubators, offer mentorship programs as part of their services. These programs can help entrepreneurs to connect with those subject matter experts who can offer encouragement, motivation, and accountability, helping entrepreneurs stay focused and on track toward their goals. EDOs should understand the types of mentorship programs available and provide access to these in a way that is efficient and effective for the entrepreneur. This removes any uncertainty and enables the entrepreneur a quicker path to success, which is essential for creating a vibrant entrepreneurial ecosystem.
With access to mentorship and capital in place, what’s next? Networking is the glue that holds everything together. Entrepreneurs need to build meaningful relationships with others in their community and industry. By networking, entrepreneurs can connect with potential customers, partners, investors, mentors, and peers who can help them achieve their goals. Networking can help entrepreneurs to build their brand, identify new business opportunities, and learn from others. Entrepreneurs can network in a variety of ways, including attending industry events, joining professional associations, participating in online communities, leveraging social media platforms, or even relaxing with community members in their local third places.
To create networking opportunities for entrepreneurs, it can be helpful to organize events such as pitch competitions, conferences, seminars, and workshops. These events can bring entrepreneurs, investors, and other stakeholders in the startup ecosystem together in a physical space, providing an opportunity for entrepreneurs to connect with others. But being aware of these networking events is where the issue lies for startup entrepreneurs. EDOs can provide their own networks, so to speak, that offer information on these local networking events for entrepreneurs and facilitate those first critical conversations.
The work of entrepreneurship center programs and EDOs does not end when the entrepreneur has cut the ribbon on opening day. New business owners always have expansion and growth in mind. They will need resources, service providers like legal teams and specialists in necessary fields, workforce talent, physical equipment, and possibly more office space. In other words, the ecosystem always needs to be able to provide entrepreneurs with what they need. It’s a continuous journey; now, entrepreneurs can take the next steps to ensure they are fulfilling their commitment to the community. Creating ecosystems that foster entrepreneurship is all about making sure these resources are not only available to entrepreneurs, but available in the most efficient way, through every stage of growth.
Entrepreneurship support organizations want to make sure entrepreneurs are meeting not only their financial goals, but that they are accomplishing what they set out to do for the community. Entrepreneurship support organizations offer a wide range of resources and support services that can help aspiring entrepreneurs turn their ideas into successful businesses. It is the ultimate goal of these programs to provide entrepreneurs an ecosystem where they can start, expand, and thrive.
For startup entrepreneurs, though, gaining access to critical resources is not always so simple. Sometimes, certain programs available within the community may even fly completely under the radar. Entrepreneurship support organizations gather these resources, but how do entrepreneurs gain access, and how do they maintain access? Some of the early questions entrepreneurs ask themselves are: how do they know what to do first? Where do they go to find these answers?
The resources are available–but with access to them located all in one place, entrepreneurs can find not only the exact resources they need at any stage of growth, but also a path to success. Creating an ecosystem for entrepreneurship means creating a self-sufficient ecosystem, one where efficient relationships between resources exist and with seamless handoffs between each. This way, not only does the entrepreneur have easy access to the things they need, but each need is anticipated and each need is met effectively. Here, EDOs can track and measure the entrepreneur’s journey, ensuring all goals are met and that the local economy and community will thrive as the journey progresses. This is what ELED aims to accomplish.
Building an ecosystem that encourages entrepreneurial growth includes securing access to many resources. Equitable access to capital, mentorship, education, and networking opportunities are among the most essential factors entrepreneurs need to be involved with when starting a new venture. By providing entrepreneurs with the resources they need to launch and grow their businesses, all in one place, EDOs can help to drive economic growth, create jobs, foster innovation, and strengthen local communities. Ensuring entrepreneurs can get started within a supportive, self-sufficient ecosystem can make all the difference.
At Economic Impact Catalyst, our mission is to activate a world where there is equitable and inclusive access to entrepreneurship. We believe that entrepreneurship is the key to equitable and inclusive economic development. Our team’s main focus every day is to make it easier for founders to launch businesses in order to create wealth for themselves, for their teams, and for their communities. To learn more about our technology and market research solutions, built exclusively to catalyze entrepreneurship-led economic development efforts, book a call with us today.