Differentiating Our Startup Ecosystem

Differentiating Our Startup Ecosystem Summer 2014 Virginia the New Leader in Entrepreneurship – Richmond at the Center By 8,260,405 Population of the The Commonwealth of Virginia, the 12 th largest state Numbers 12,683 Number of new ventures formed in Virginia in 2013 11.1% Percentage of U.S. angel investment deals conducted in the Southeast region $3 Billion Impact investment commitments expected for private equities in 2014 19% Internal rate of return expected for developed market, private equity impact investments 88% Percentage of developed market impact investment funds which are outperforming or in- line with financial expectations Sources: U.S. Census Bureau, Kauffman Foundation, Silicon Valley Bank and Angel Resource Institute, Global Impact Investment Network, and JP Morgan, respectively Building Businesses Improving Communities Entrepreneurs for our Collective Good. We are supporting those startups that improve our community and grow our economy. We provide: • Skills development; • Professional networks; • Financial capital; and • Facilities. Founding Sponsor Delivery Partners 2 Table of Contents Acknowledgements ………………………………………………………………………………………………………………………………………………….4 Executive Summary ………………………………………………………………………………………………………………………………………………..6 Entrepreneurship – Engines of Job Creation ………………………………………………………………………………………8 Our Economy – Where Entrepreneurship Fits ………………………………………..................................................11 Our Ecosystem – The Context for the New Business ……………………………………………………………………18 Conclusion ………………………………………………………………………………………………………………………………………………………………… 29 References ………………………………………………………………………………………………………………………………………………………………. 30 2 Acknowledgements First and foremost, it is right that we express our gratitude for the Spirit of concern - that within us which guides us which seeks the well-being of our neighbor. We are grateful for the founders of Advantech, the Maggie L. Walker Business and Technology Incubator. It is upon their shoulders that we stand. We’d like to specifically thank Jon King, regarding his leadership in that capacity and his ongoing support for our work and for the City of Richmond. We’d like to express our gratitude for the men and women who have graciously given of their time and talent to serve on the Board of Directors of the Richmond Economic Development Authority. This work is only made possible through their commitment to job creation and economic growth in our city. We’d like to specifically express our gratitude for the leadership of Julious Smith and Richard Johnson, current Chairman and immediate past Chairman, respectively. We’d also like to express our gratitude for the ongoing support of Anne Greever, Kelvin Hanson, and Meda Lane, who all serve within this capacity. The Incubator Committee has provided a strong governance mechanism by which the transformation from Advantech to RVA Works has been made possible. It has been through this committee that Greta Harris and Zarina Fazaldin have provided strong leadership, vision and operational acumen. In particular, Ms. Fazaldin’s passion for community improvement and the incubator’s potential, that we are all indebted. Without the smooth day-to-day operations of our facility, this work would not be possible. Sharon Kerrick’s management of the building is a true blessing, and the efforts of Richard Montague and Jimmy Alexander are a key contribution thereof. We’d also like to thank the ongoing support of numerous employees with the City of Richmond. In particular, we’d like to express our gratitude for the efforts of our Mayor Dwight C. Jones, Bonnie Ashley, Lee Downey, Jane Ferrara, Pat Foster, Ron Johnson, and Sheila Shepperson (retired). We’d also like to specifically thank the Honorable Kathy Graziano and the Honorable Parker Agelasto, both members of the Richmond City Council and supporters of our work to grow our local economy. We’d like to thank all of those who have generously given of their time to serve as members of our Advisory Board, including: Peter Aiken, Gunnar Bartels, Ace Callwood, Jon Davidow, Sharon Dabney – Wooldridge, Mark Deutsche, Ramzy Ismail, Remo Kommnick, Sattar Mukadam, Todd Nuckols, Wayne Nystrom, Michael Pirron, Will Rabke, Vilma Seymour, Mike Vizdos, Jared Wasdin, Sarah Williams, and Felipe Wright. We’d also like to thank the team at New Richmond Ventures, and in particular, Bob Mooney and Jim Ukrop, for their unfailing support for social entrepreneurship, for their input into our program development activities. There are many other people without whom this work would not have been possible. Toan Nguyen has been instrumental in providing ongoing input, energy, and experience into our work. He has been an exceptionally strong advocate, and his work at CIC in particular has, in large part, shaped the model for our Entrepreneur Institute. A specific thank you to the Honorable Jim Cheng, former Secretary of Commerce & Trade for the Commonwealth of Virginia for his support, and for the ongoing support of our current Secretary of Commerce & Trade – the Honorable Maurice Jones, as well as that of our Governor the Honorable Terry McAuliffe and the Secretary of the Commonwealth, the Honorable Levar Stoney. Our other delivery partners have played a vital role in terms of their commitments to our vision and strategy. For them we are deeply thankful. We’d like to especially thank Capital One for their founding grant which has made possible the first cohort of Entrepreneur Institute. In particular, we are fortunate to have the support of Steve Gannon, Nancy Stark and Amy Chapman. We would also like to thank our delivery partners, including: Jill Johnson, CEO of Workshops in Business Opportunities; Dr. Bob Kelly and Nicole Colomb of Virginia Commonwealth University; the team at Gangplank, including Derek Neighbors, Jade Meskill and Trish Gillam; Nate Olson and Taylor Brown of the Ewing Marion Kauffman Foundation’s 1MC team; Ana Costa, Jonny Price, Justin Renfro, and Alyssa Thomas of Kiva Zip; the Small Business Administration’s leader of the Richmond SBDC, Mike Leonard, and the SCORE team; and Richard Luck and Sarah Mullens co-founders of UnboundRVA. We would like to recognize the tremendous inputs of Corey Lane of the Martin Agency. His unceasing support for our work, his commitment to community, and his marketing capabilities have made him a strong asset for our team. There are many others who generously contribute their time, contacts, and talents to help support our work, including: Bob and Wendy Austin, Ron Collier, Diego Falarcon, Mark Fulcher, Andre Galitzsky, Chris Gatewood, Ed Gerardo, Robin Lancaster, JT Logan, Dave Lohr, Paul Nolde, Alan Reese, Jeff Sadler, Josh Sheldon, Martin Short, Bobby Thalhimer, and Rick Wildes. Lastly, we’d like to thank all of our past and present residents. In large part, it is through their contributions to our city’s economy and their decision to reside in our building, that we are able to undertake these endeavors. 4 I write today in the spirit of hope. We have a unique opportunity! In 2008, we saw a historic shock to the financial system, and during the subsequent Great Recession, we experienced an unprecedented contraction in the economy. Many families in our city, and across the country, felt the impact – lost jobs, foreclosure, bankruptcy, and damage to personal relationships. Many families had to rely on their local churches, social services A special note of organizations, and friends for basic support – support for housing, gratitude to Eric food, and clothing. Despite these tribulations, we have hope. Blaschick, for his assistance with the creation of We are starting to see signs of economic recovery. We are still this document. the world’s economic leader, and we’re a country richly blessed with individual enterprise and community unity. We have an opportunity! Here in Richmond, we sit in the middle of the east coast – one of the most economically advanced regions anywhere. We are only 100 miles from the national capital, and 100 miles from one of the most significant seaports on the Atlantic. As a commonwealth we have access to some of the latest technology and innovation, and in Richmond we have some of the nation’s top creative talent. We have an opportunity! Richmond as a startup community is already thriving with local entrepreneurs, strong institutional partners, and public sector support. New businesses are the job creators; and a vibrant community of entrepreneurs is synonymous with economic prosperity. Building a business, owning a home, and creating a better future for our children – across diverse neighborhoods we have the same hope. We have an opportunity to build an even stronger community of entrepreneurs, a community of new business leaders, a community of job creators. As we carve out our unique niche, we seize this opportunity and show who we are – what we stand for. We have an opportunity to bring new resources to bear; to build businesses that strengthen our city and our region; to build businesses that are sound investments; and to build businesses that improve society. Please join me in this discussion, as we define how we seize our opportunity. Warm regards, Executive Director, RVA Works 5 Executive Summary This document is being circulated throughout a range of stakeholders to facilitate discussions on the opportunity for Richmond, and Virginia more broadly, as a destination for entrepreneurs and for investment in new ventures. It is incumbent upon us to clarify a vision for our startup community; a vision which defines

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