What is the most difficult challenge your community faces when building entrepreneurial infrastructure? Funding? Leadership? Marketing? Most entrepreneurial communities on the edge have trouble finding capital to build the infrastructure they need to support and grow their entrepreneurs and business owners.
The first step in funding is to build a strong entrepreneurial infrastructure that’s relevant for your community. Here’s a quick recap of building infrastructure:
- Identify assets in the community that support entrepreneurs and business owners.
- Connect your community together in a network.
- Empower your network to fill gaps, make data-driven decisions and amplify your resources.
- Measure what matters.
Keep in mind, when building your community’s infrastructure you want to include a whole range of services for a broad spectrum of entrepreneurs, not just tech startups (AKA unicorns). In fact, research shows that innovation-led companies only make up 1 percent of entrepreneurs in the entire country. The majority of our business owners and entrepreneurs own Main Street and Microenterprise businesses.
Main Street businesses make up about 25 percent of small businesses. Examples of these businesses owners are local coffee shop owners, dry cleaners or restaurateurs. These entrepreneurs aren’t focused on rapid growth, in fact, they intend to build a long, successful career in our hometowns (and on our main streets).
Microenterprise businesses make up 71 percent of businesses in the country and require less than $35,000 in capital to start a business. These are typically your freelancers, website developers and dislocated workers.
Read more about how we categorize the four types of entrepreneurs and how to service each of your unique business owners in your ecosystem: One Definition Does Not Fit All: The Four Types of Entrepreneurship
Maria’s rules for fundraising for your entrepreneurial infrastructure
A key component of servicing your entrepreneurs is by having a solid infrastructure foundation. But how do communities fund this foundation? This is one of the top questions our founder Maria Meyers is asked when she’s speaking or meeting with community leaders.
Sorry. There’s no simple formula or easy way to find funding for your infrastructure. It is hard work and takes diligence.
In her experience of writing grants and asking for funding, Maria has found the following steps will significantly increase the likelihood of winning grants and funding:
- Identify the problem in your community.
- Find the data that verifies the problem.
- Develop a solution to the problem.
- Involve as many partners as you can.
- Raise match dollars up-front.
- Tell a clear, compelling story about your results.
Sources of funding your infrastructure
Funding your infrastructure can come from everywhere. Baltimore SourceLink is funded by the City of Baltimore. Loudoun Economic Development of Virginia is county-funded. State-wide SourceLink affiliates like IASourceLink, Network Kansas and Colmena66 (Puerto Rico) all receive partial funding from the Economic Development Association.
The key is to involve as many partners as you can. When it comes to talking to local foundations, the more partners you have, the more local funders will have a hard time saying no to your local organization.
You want as many partners and match dollars raised up front to strongly position your organization for success. Work with universities, corporations and local foundations.
Note: Not many national foundations invest in local organizations. Your best bet is to seek funding from regional and local foundations. They are most vested in the success of your entrepreneurial community.
Focus your funding energies on local foundations. Local organizations are stepping up and trying to understand the roles entrepreneurs play in economic vitality. Social service organizations are looking into funding entrepreneurs as another piece of improving community strength.
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