I have been thinking about the cultivation of entrepreneurial activity around the world. Most recently I have been considering the cultivation of entrepreneurs within the United States. I live in the Boulder, Colorado area and in my observation the University does a fantastic job in connecting the students to entrepreneurial activity in the community. I had the opportunity to work with the Entrepreneurial Law Clinic for a season on a project. There are many events hosted at the University for entrepreneurs in the community, a small venture capital fund run by the students and student business plan challenges campus wide. I have seen the proof. I have met several students becoming entrepreneurs and building companies rather than taking the traditional career path. With these observations and the advent of organizations like StartUp America and incubators like TechStars around the country, it is clear the opportunity and support for recent graduates or even current students as entrepreneurs is encouraging.
Where I am discouraged is our cultivation of entrepreneurs across the entire age spectrum. I think lack of know-how, risk adversity and confidence result in many would-be entrepreneurs remaining in the cubicles of corporate America. When equipped, these same individuals could create value and jobs that would benefit the greater community. But instead, at a stage in life with a family and mortgage it is too much risk for a responsible leader. This unfortunately leaves entrepreneurial activity to a narrow demographic. It appears repeat entrepreneurs are common because after selling a company they can afford to take more risk. Or recent University graduates with low expense and responsibility requirements can take a shot for a time. But is that truly a representation of our best entrepreneurs?
Eventually, I believe we will have to coax the entrepreneurs across the entire age spectrum to go beyond the safety of a corporate job to building something great that creates jobs for others. Perhaps someone took a corporate position out of college because that was the expectation at the time. However, the support model for entrepreneurs was very different 25 years ago. With the right support, could this same person have made a great company? And now, today… is this person any less of a great candidate to be an entrepreneur? I would argue maybe today they are even a greater candidate factoring in their life and professional experience.
For the past several years, I have engaged in many conversations to explore these questions with others. Whether in their twenties or forties in age, most often those I have spoken with start with various biases that define what an entrepreneur is, which more often than not discriminates against age. Group thinking like that stifles programs that encourage and enable support for entrepreneurs of all ages. Whether newly graduated, working full time for a fortune 100 company or retired, programs and services in communities for entrepreneurs should target all ages to support as entrepreneurs.
One such program I proposed in recent years is the idea of a startup factory for those who are not in a position to operationally run their idea as a company. Perhaps there are those who are highly successful and happy in their jobs. They have an idea that they believe has a strong market, but have no intention of quitting their job to pursue it. Should this idea be built? I think so. What if a program allowed them to build their idea and give it to others to run. Perhaps a ready-built operations team is assembled of recent university graduates. A team of sales, marketing, CEO, and technical resource can be assembled around an idea. Once it is built, they run the company to profitability. If they are successful, they have just created jobs for themselves. This could also be a fantastic summer program for a student team. They could take an idea and run with it for a few months over the summer to see if an idea has merit.
The benefit to the would-be entrepreneur having this idea of theirs built and run with could come in the form of founders equity. Perhaps the entrepreneur can also serve as an adviser or on the board of the emerging business. My advocate for this type of model is that there will be some entrepreneurs who build enough businesses this way that they will eventually transition from corporate to startup life. An Internet based business built in this way could be in production within weeks leveraging an outsourced model of secure server hosting and management development.
Entrepreneurs are enabled through opportunity. If programs in the U.S. focus on only those entrepreneurs who have the opportunity to begin with, then I would argue we are doing a poor job as a country to encourage entrepreneurial activity as a whole. It is where the idea, charisma and hard work are masked by the responsibilities of family, mortgage and available time that we are not providing opportunity.
It is my opinion that angel investing can have a huge influence in this enablement of entrepreneurs across the entire age spectrum. If financial means were made available for these ideas that are otherwise not being built, then new doors could be widely opened. According to UNH Center for Venture Research total angel investments in 2012 were $22.9 billion. In that same year, these angel investments accounted for 274,800 jobs, or 4.1 jobs per angel investment. However, during that same time frame, angels decreased their investments of seed and startup capital down to 35 percent, down from 42 percent the year before. Angel investment in early stage investments were also down by 7 percent during 2012. Jeffrey Sohl, director of the UNH Center for Venture Research stated his concern for the decrease in seed and startup stage angel investments since that is the stage of our nation’s entrepreneurs.
Could it be possible that angel investment returns might improve for early stage startups if ideas were gleaned from any age group?
I encourage you to embrace and create opportunity for entrepreneurs of any age. It takes a village to build a startup. Perhaps it is time that we redefine the boundaries of our villages to maximize the impact of the entrepreneurial economy.