June 28, 2018 10:19am
EnterpriseCorp’s State of Entrepreneurship for Greater Louisville
On behalf of the EnterpriseCorp team and our advisory board, we share with you our region’s accomplishments, challenges, inspiration and celebration – because we’re celebrating 2018 as the “Year of the Entrepreneur” and EnterpriseCorp’s 20th anniversary.
So why entrepreneurship?
Why do founders start companies? Why is a robust startup ecosystem important? Why should the business community care about entrepreneurship? Because the key ingredient to any strong, healthy business environment is innovation. Innovation attracts talent. Innovation creates a diverse economy. Innovation spawns new businesses which then turn into expanding businesses which then attract other businesses. Startups and small businesses should be viewed as engines of innovation, economic growth, and overall prosperity. When properly advised, connected, mentored, and invested in, startups ultimately create jobs, which create wealth which then creates re-investment in the local community and ultimately attracts talented professionals and grows the economy.
So why EnterpriseCorp?
Being an entrepreneur is daunting – they’re dealing with employees, sales, and customers, while managing the personal drain and daily grind. An entrepreneur knowing that they aren’t alone is a comforting feeling, but also surrounding themselves with like-minded smart people can be a differentiating factor for success.
At the heart of what EnterpriseCorp does every day is assist startup companies, one-on-one, we start wherever they are… and we determine how to help and guide them to their next milestone. It might be teaching them customer discovery, it may be helping them find the resources to build their prototype. Or maybe it’s connecting them to a potential customer, or steering them to the right source of funding. These milestones pave their path to commercial success.
From our 2017 Annual Report, I’m happy to say that last year, EnterpriseCorp:
- Served 132 startup companies
- Was in the classroom and impacted 257 high school and college students
- Assisted 39 startups with access to various sources of funding
- And overall, we helped them secure almost $20M in funding
- When startups get funded, the first thing they do hire people – last year the startups we assisted created 178 jobs
- And these are good jobs, with an average annual salary of $55,000
Million Dollar Babies
Last year, we introduced an important new metric for our startup community – the “Million Dollar Baby.” We came up with Million Dollar Babies to help all of us understand the health of our startup community relative to other years and other cities. It’s a measurement that we track for the entire region. “Million Dollar Baby” is a designation we give to a startup when they accomplish one of two things: they either raise at least $1M in a single equity round of investment –or– they cross the threshold for the first time of $1M in sales revenue. The ability to accomplish either of these — or better yet, both — is a great indicator of potential success, especially when you note that only 5% of startups worldwide make it to $1M in revenue!
Our region saw an average 7-8 Million Dollar Babies per year from 2012-16. For 2017 we set a goal of at least a 20% increase in Million Dollar Babies by year end – so a goal of 10. Our region achieved 17 Million Dollar Babies in 2017!
So far since January of this year, we are tracking at 8 Million Dollar Babies. This is a great accomplishment for these companies – it matters. But I want you to know the work is nowhere near finished. The statistic of achieving $10M in sales revenue after hitting the Million Dollar Baby threshold is only 1%. The importance of education, programming, mentorship and access to customers and capital is vital at all stages of startup growth.
More “Metrics That Matter”
Endeavor Louisville is part of the larger Endeavor Global. Through its rigorous selection process, they provide access to capital, mentors and markets for the companies selected into their program. Our entrepreneurial community is made only stronger with the newest companies selected to Endeavor Louisville this year – congratulations to Mixer XD and Rabbit Hole Distilling.
Congratulations to Mark Lanwehr, President and Owner at Car Keys Express, and John Waggoner, President, CEO and Principal at HMS Global Maritime, who were named Ernst Young Entrepreneur of the Year winners for the Ohio Valley Region. We look forward to the 2018 list later this fall.
We also recognize two companies that made the prestigious Inc. 500 list this year with their tremendous growth:
- At number 118, PAKmed – manufacture and distribute orthotic braces to health care providers and suppliers, had over 3400% growth, and
- At number 194, Ladder Now – provide inspections of roofing and exteriors for insurance claims, had over 2200% growth
Below them, the Louisville region had 22 companies that made the Inc. 5000 list. We also look forward to EY’s 2018 list in August.
At the start of 2018, we declared this to be the Year of the Entrepreneur. Why? This year, and only this year, four marquee events happen.
Year of the Entrepreneur Event #1
For the first time ever in early May, the Endeavor International Selection Panel was held in North America – in Louisville. Over 100 judges, mentors, and entrepreneurs from Endeavor Global came here right after Derby for this highly competitive, global opportunity. Endeavor Louisville now has 9 portfolio companies that are scaling up and giving back. We need more globally focused Endeavor companies!
Year of the Entrepreneur Event #2
You may recall that 2 years ago, with the help of Chuck Denny and PNC Bank, we brought Steve Case, founder of AOL, and his Rise of the Rest tour to Louisville, where he spoke at our Evening of Entrepreneurship event. This past year we worked hard to win the bid for Steve to come back to Louisville. We had to do that through social media voting. We won by 50% of the vote, over 2nd place Phoenix, in large part due to our network and UofL taking up the challenge with us. Steve brought his bus and his Rise of the Rest Fund to meet with our fast growth companies and startup leadership. We held an amazing pitch competition where Inscope Medical Solutions, led by Maggie Galloway, was the winner of a $100K investment from the Fund. It was a great day for Louisville and for our entrepreneurs.
Year of the Entrepreneur Event #3
Last year, I highlighted that my good friend Galen Powers, with the assistance of SIDIS Corp. and PNC Bank purchased, a 40,000 square foot building, located in NuLu at 900 East Main Street – next door to Lincoln Elementary – for our region’s entrepreneur center. You can see the new facility is currently undergoing renovation for a grand opening in 4Q of this year. That’s a collaborative approach, entrepreneurially-led, and with several outstanding partners in both Southern Indiana and Kentucky for an anchor asset. This will be a welcoming, front door to entrepreneurship providing for those informal collisions that allow startups to simply grow faster. Our current plan is to move EnterpriseCorp down to the new Center.
Before I get to Year of the Entrepreneur Event #4, I want to make a few other points. The EnterpriseCorp team has been highly engaged, listening to startups. At this event last year, I told you that we piloted three new programs that focus on assisting founders with access to early customers – it’s all about customer adoption. Why? Because customer revenue is the cheapest way to finance a startup. We have now launched a suite of programs with some great community partners.
MentorLou – matches startup founders and management with subject matter experts as mentors. We’ve had 2 matching rounds so far with 23 matches. We need more mentors!
Sales Intensive – using expert sales professionals, we’ve held 2 sales intensives that teach startup founders how to sell their product or service, often before it’s finished. Customer validation is a great thing to know. What we’ve learned is that we’ve got a whole parallel opportunity to teach a basic program, a Sales 101 for Startups, that is planned for next month. We need more sales experts!
RevIt — we’ve also had 2 Revit marketing workshops, in partnership with the UofL Forcht Center for Entrepreneurship. Through RevIt, we engage our marketing community to help early stage companies reach out to new markets using a variety of marketing channels.
But we need more! We need more volunteers to engage from our corporate and business community with startups. These are three programs in which that engagement can happen. Let’s multiply these opportunities by 10!
In this Year of the Entrepreneur, we continue to match startups with the appropriate source of funding based on their stage and needs. On behalf of the entire region, we also track the progress of early stage companies receiving investment – and we’ve been tracking this data since 2005 for you.
Through our tracking of the number of companies funded in our region, traditional capital access to fund a startup, has been relatively flat in our region over the last several years…
…Unless of course you’re an outlier like Cedric Francois with Apellis Pharmaceuticals, who has raised $60M in a single round quite easily. Cedric did this twice in 2016 and 17, and now in 2018 has offered an IPO.
The Angel Capital Association has indicated there’s a decline in early stage angel investing around the country. Louisville is no different. In fact, we’ve seen a dramatic decline in both the number of active angels here and the number of deals they’ve invested in. That said, we are committed to revitalizing early stage investment in startups for our region. Make no mistake – early stage investing is a high risk proposition and not for the faint of heart.
This is hard – that’s why we’re engaged with a terrific partner, Venture First, to help us think through this revitalization — to get more angel investors investing in startup deals! Remember, funded companies create jobs and are more likely to grow.
Niche Specific Entrepreneurship
While our region has a good number of broad spectrum entrepreneurial resources – in fact we are the only city in the world to run 12 Startup Weekend events in a row – we’ve also seen the entry of several new entities focused on a growing trend of niche specific entrepreneurship:
- Grow with Google — is bringing digital skills trainings, best practice workshops, one-on-one coaching, and investment to Louisville, particularly focusing on underserved communities in order to bring new ideas, new companies and jobs to life
- Tarik Nally and Stacey Servo — have launched a new accelerator program called WILD aimed at supporting women entrepreneurs, having just wrapped up their first cohort
- Love City — is a social impact startup with a mission to uplift the Portland neighborhood through economic stimulation, educational programs, and social engagement
Thank you to each of these organizing teams for supporting entrepreneurship in our region. I challenge you to push the startups you serve even further than they think they can go. Because we need more!
Revitalization of the “Justice League”
For any startup to be successful, of course they need access to resources – the right resources to support them. Several years ago a group, referred to as the “Justice League,” was formed that included leaders of all the entrepreneurial resource organizations in the region – there were 12-15 of them at the time. They had a goal to increase awareness and communication of available resources and developed StartupLou.com to be the go-to site. This is a website containing broad categories of entrepreneurial groups, information, programs and education that link to other sites. StartupLou.com also includes an events calendar for the startup community. But even with this, entrepreneurs still tell us that finding, accessing and navigating the right resource is difficult. So we reignited the Justice League – again calling upon all leaders of entrepreneurial resource organizations to band together – and this time we identified over 40 organizations with a further defined purpose of serving entrepreneurs through:
- Collaboration – work together with a shared mission of supporting entrepreneurs
- Syndication – be aware of each other’s value and refer entrepreneurs to the best resources
- Advocacy – support one another; reduce the inadvertent overlap and unnecessary silos within our startup community
And now, Year of the Entrepreneur Event #4
You’re here! While our Evening of Entrepreneurship happens each year to celebrate our startup community – an event called for by Doug Cobb when he first formed EnterpriseCorp in 1998 – today we celebrate our 20th anniversary. And it only happens once in the Year of the Entrepreneur! That’s a measure of sustainability and commitment by GLI and the many staff members that have been part of this long standing entrepreneurial support organization. So, let’s have a toast. Let’s raise our glasses to accelerated growth of our startup community over the next 20 years, to more innovation, more startups, more investment, and more jobs. To our ongoing, joined commitment to create a long lasting culture of entrepreneurship! To a bigger and better Startup Lou. Cheers!