Breaking the mold
How ecosystem-builders are fostering innovation, diversity, and economic growth in emerging startup hubs like Memphis, Louisville, and Tampa.
Our blog series on issues in entrepreneurship features 36|86 insiders exploring topics including innovation as a catalyst for social change, the importance of women’s voices in the startup economy, and how to take care of yourself while you’re taking care of business.
Today’s topic: the challenges and transformative power of entrepreneurship in non-traditional hubs. Meet Louisa Shepherd, director of Epicenter in Memphis; Patrick Henshaw, CEO of Louisville’s LEAP; and Allie Felix, Director of Platform for Embarc Collective in Tampa.
Why are ecosystem builders important to the development of entrepreneurship in non-coastal markets — and in the Southeast, in particular?
The big entrepreneurial ecosystems on the coasts, like New York, Boston, and Silicon Valley, are the result of decades of infrastructure building, policy making, innovation, and a myriad of other factors.
Non-coastal markets have the potential to thrive in many of the same ways with the collective and intentional support of ecosystem builders, whether they be public policy makers, educational institutions, entrepreneur support organizations, investors, or others. Entrepreneurial ecosystem builders are crucial to thriving economies because they provide the infrastructure and supports that create environments where entrepreneurs can do what they do best.
Due to the density in some larger coastal cities, the national perception is that those are the areas where the best entrepreneurial talent resides. But we all know that each ecosystem not only is different but has its own unique selling propositions or reasons to believe.
While those saturated markets do have strength in numbers, our emerging markets have the same tools, if not better. Our entrepreneurs have direct access to resources and are supported by energized and proactive ecosystem builders like LaunchTN and Louisville’s LEAP.
With us, you’re not just a number in the crowd that has to prove why you deserve to be heard. Instead, we reduce the headwinds and the friction that many times comes with gaining access to customers, capital, talent and resources. We connect you to mentors, introduce you to investors, support your growth with programs and networking events — we celebrate you!
One of the best kept secrets of the Southeast is the spirit of collaboration from city to city. We may not be the size of a market like New York City or San Francisco as standalone cities, but as a region-wide collective, the Southeast demonstrates tremendous support.
At Embarc Collective, our startups are able to build in Tampa Bay but tap into the networks of our partner organizations, such as the Nashville Entrepreneur Center, Loeb.atl in Atlanta, and American Underground in Durham.
Whether we are swapping best practices, sharing office space for our member companies to conduct investor meetings, or facilitating introductions, you’ll find that folks are generally aligned on helping startups succeed — no matter where they are headquartered. Through these local and national collaborations, we can begin to reduce silos and more easily and effectively connect resources within our region to the entrepreneurs that need them.
What are some hurdles you’ve seen for entrepreneurs working in your city, and how are you addressing them?
Access to capital is one of the most talked-about challenges for entrepreneurs in my region, and in the many other cities that I visit while speaking and attending convenings of other ecosystem builders. In Memphis we are flooding our ecosystem with not only venture capital, but several different capital solutions that meet the needs of all sorts of entrepreneurs across a large spectrum.
When we think of “investment” in entrepreneurial ecosystems we often think of venture capital. But in Memphis we are working tirelessly to provide entrepreneurs access to less traditional capital with a unique “Capital Stack” model. This incorporates a mix of non-dilutive funds, pre-bank debt, and equity-based investment that speaks to the needs of all entrepreneurs, not just the high-growth, high-tech entrepreneurs most people think of when the topic of capital comes up.
While the Louisville entrepreneurial ecosystem has been thriving for years, we recently discovered that silos which naturally popped up over time are now creating more friction than opportunities. As a result, five of Louisville’s top entrepreneurial players have joined forces to create a better-coordinated effort, to break silos, and to collaboratively create a path for innovation.
Only 5.3% of 2018’s record-breaking venture capital funding was invested in the Southeast region, despite producing 20% of American GDP and being home to more than 2,335 startups. Because of this, a request floats through my inbox almost daily from an early-stage tech startup seeking guidance on fundraising.
To address this hurdle, we at Embarc Collective, alongside Modern Capital, Launch Tennessee, and HQ1, created a living and breathing resource to help connect local startups with funding opportunities in the Southeast — The Southeast Capital Landscape.
To the surprise of many of our founders, Florida is home to the largest number of early-stage firms in the Southeast (nearly 24%), which is likely attributed to its fourth-place rank in the US for the number of accredited investors.
Our hope with this list is that startups can more easily find local capital resources and that funding opportunities will be better distributed throughout the Southeast — no matter where you are located.
What have you witnessed in your market that illustrates the transformative power of entrepreneurship?
Before moving to Memphis I lived in Cincinnati, Ohio. It was a city that I loved and still enjoy very much — but when I moved to Memphis, I was happy to discover an entrepreneurial landscape that looked much different than the one I had left.
Memphis has one of the most diverse entrepreneurial communities that I’ve ever seen. Our market has some of the highest investment rates into businesses created by founders from underestimated populations. We have strong women founders, we have trailblazing founders of color, we have inspiring immigrant founders.
Our region has a long way to go in continuing to increase the diversity of its businesses to drive large-scale economic growth. But I witness the transformative power of entrepreneurship on a regular basis through my interactions with the entrepreneurial community in Memphis as they continue to gain economic independence.
One recent transformative win for our ecosystem was a first-ever CareTech pitch competition. The goal was to pair innovative startups with corporate leadership to identify innovative solutions to address the needs of unpaid caregivers. Startups from around the world submitted applications to pitch the most powerful healthcare CEOs headquartered in Louisville.
Six startups (three early stage, three late stage) were selected and not only pitched their ideas but also are now in the process of pursuing pilot opportunities with Louisville Healthcare CEO Council companies. This is a perfect example of the power of Louisville’s global reach.
This past May, AOL co-founder Steve Case brought a national delegation of entrepreneurs, investors, and other stakeholders to Tampa Bay for the Rise of the Rest Tour (ROTR). Rise of the Rest is a nationwide effort to work closely with entrepreneurs in emerging startup ecosystems and has become a key indicator that a community is on the rise — and on May 1, I couldn’t have been more proud.
Our startup community showed up in full force, packing the house with 600+ attendees across startups, investors, community builders, and the general public (setting a ROTR record as the fastest region to reach venue capacity for the public fireside chat and pitch competition).
This demonstration of community illustrated that our region is ready — ready to support its startup founders and their teams, ready to rally around our key industries, and ready to let the world know that we have an abundance of support to offer the startup community at large.
What keeps you in — or attracted you to — your city?
For me, Memphis is a hot-bed of opportunity. I personally find it appealing because the cost of housing is accessible — I bought my first house at 28 years old on a single, non-profit income — and because the career opportunities provide a lot of responsibility and growth.
As an ecosystem builder there is no place else I could do the work that I do! If I lived in a larger, more developed city, the change I’d be able to make would be incremental here or there … but the impact I’m able to make in Memphis as an ecosystem builder is exponential. I feel that in Memphis, the impact of my work can be seen and felt in very tangible ways.
Louisville is a city that is brimming with talent, creative energy, and promise. When the opportunity presented itself to lead and influence positive change through LEAP, I knew it was the right move for me and for my family. As a new resident and CEO of LEAP, I am constantly amazed by the community’s genuine commitment to the area’s growth. For example, local leaders to the governor are willing to listen and help when called upon — even with a short turnaround time!
Another great benefit of living in Louisville is access to top-notch healthcare. Many of us have aging families and it’s comforting to know that our backyard has arguably the best care in the nation. I am proud to call Louisville my home and I look forward to contributing to the city’s sustainable change.
Originally from the Tampa Bay area, I spent my early career in San Francisco and New York City working in the startup space. My interest was piqued by the growth taking place in my hometown after learning of Water Street Tampa, one of the largest developments in the nation, backed by Jeff Vinik and Cascade Investment Group, the personal wealth fund of Microsoft co-founder Bill Gates. The development project, led by Strategic Property Partners, represents a significant investment in the city’s future.
Because of this, I’ve always felt it was my calling to eventually return home to help build the startup community in Tampa. When Lakshmi Shenoy, the CEO of Embarc Collective, extended an offer for me to join her team to build a first-of-its-kind innovation hub, serving as a central landing zone to bring together startups, venture capitalists, customers, academic resources, and coaches, it was an easy “yes.”
With the momentum taking place, we are at a pivotal moment in time for Tampa Bay to step up to the plate and become a leader in the Southeast region for entrepreneurial growth. I am all-in on helping local change-makers unlock the city’s potential for retaining, harvesting, and attracting entrepreneurial talent through supporting startups with what they need most — a community to belong to, workshops and education, customer introductions, and access to investment opportunities.
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