I was disappointed to read the comment in the Oct. 3 news story, “Investing in area entrepreneurs,” relative to wanting “aspiring entrepreneurs tinkering in their basements and garages to find out what the program can offer. They don't have to be in a local co-working space, such as the Northeast Indiana Innovation Center, to receive help from Elevate Northeast Indiana.”
While it is true there is no requirement to be in any program to receive their help, this statement shows a lack of understanding about what we actually offer at the NIIC for entrepreneurs and how we guide entrepreneurs to success.
We think there are a number of factors entrepreneurs should consider.
Several things happen before accepting funding. The preoccupation with investment-backed start-ups ignores the majority of services entrepreneurs need before accepting money from investors. Forty-one years ago, Apple started in a garage. To generate the $1,350 in capital used to start Apple, Steve Jobs sold his microbus and Steve Wozniak sold his calculator.
They didn't have a cap table or turn to outside investors. Instead, they focused on their vision of computing. Today, entrepreneurs are fortunate they don't need to start in the basement or garage. Remember, Fort Wayne was lauded in a national ranking for having high-quality entrepreneurial support.
You have a one-in-seven chance of obtaining outside funding. This is based on historical yield rates of qualified ventures seeking capital. Recently, a large Indiana-based angel syndicate said it invests in about one out of 40 applicants for funding. If you are fortunate to secure funding, it doesn't mean you will get all the money you need.
Fewer than 0.7 percent of all small businesses are high performance, often easily qualifying for outside investment. External funding is certainly important to the low percentage that receive it. Yet, no founder should rely exclusively on it to build their business. Bottom line: It doesn't happen for most entrepreneurs; don't put all your eggs in one basket. Even worse, you may be set up for failure if your outside investment was based on hockey-stick projections.
Some 85 percent or more of all start-ups rely on bootstrapping. When bootstrapping, seek trusted advisers and entrepreneurial organizations that help you manage your risks and optimize your opportunities. Coachable and self-aware business-builders are the most successful type of entrepreneurs. Why? They are humble and smart. They know they don't know everything. Experienced providers, like the NIIC and others, have resources and expertise to enable you to fulfill your dreams and build the company you want on your terms, not someone else's. Tap into this network.
You will experience real advantages when engaged in coworking communities or business incubators: higher survivability rates, stronger growth rates, more investable businesses built on customers, not investors. This is entrepreneurship. Likewise, your venture is more likely to pivot and “think big, execute small” working with like-minded people rather than being alone.
Simply put, if you are located with other entrepreneurs, you will gain access to things that allow you to move more quickly and smartly. Not to do so perpetuates the myth that going it alone (e.g., isolated tinkerers in garages) nets the same likelihood of success as those smart enough to leverage coworking facilities, incubators and accelerators. That thesis is simply bogus.
Entrepreneurs deserve choice and not gatekeepers. Clearly, quality entrepreneurial support organizations matter. We all know not to go boating without a life jacket. The same is true for starting a business.
Do you want to be in a boat with an entrepreneurial captain who says they have you covered yet has no life jackets on board?
Or do you want to be with a captain who has thought about the risks and planned for them – life jackets provided?
You decide. If the latter, your venture can benefit from affiliation in a coworking space, incubator or accelerator. It might just give you the edge to grow a better company.
Karl R. LaPan is president & CEO of the Northeast Indiana Innovation Center.