We’re lucky to have an engaged startup community in Tennessee. Corporations, experienced entrepreneurs, investors and our state government are all supporting our early-stage companies to ensure growth and success. Communities need mentors, accelerators and other resources to foster an entrepreneurial ecosystem.
Access to mentors is a crucial part of startups’ ability to succeed. Using the experience of someone who has been down a similar path keeps entrepreneurs from making the same mistakes their mentors did. In Tennessee, we are fortunate to have many of our successful business owners provide this assistance by sharing their hard-won business experience and industry-specific advice with startups. Startups can also take advantage of their mentors’ networks to meet beta testers, potential customers and investors.
Mentors can balance out a startup team by providing expertise in an area in which the team is lacking. For example, some startups have the skills to build their technology but lack the business expertise needed to get the technology to market. Other startup teams need help navigating the process of raising capital. Either way, mentors provide a crucial service in helping teams focus on viable ideas and critical tasks.
Accelerators play a huge role in the success of startups, especially mentor-driven accelerator programs. In Tennessee, we have nine regional business accelerators, several of which specialize in certain industries. Zeroto510 in Memphis is the nation’s first cohort-based medical device accelerator. In Tullahoma, autoXLR8R is the first accelerator focused on technologies applicable to the automotive industry. We also have GIGTANK in Chattanooga, the world’s only accelerator on a living fiber network that provides one gigabit per second Internet access. Finally, Martin is currently running the only agriculture-focused accelerator in the country, while Nashville, known as Music City, is also regarded as the nation’s healthcare capital and is running a cohort this fall in conjunction with healthcare titans BlueCross BlueShield and Healthcare Corporation of America.
Going through a 13-week accelerator program can transform an idea into a business. Accelerators typically cover a range of relevant topics, including customer identification, pricing, sales projections, team building, competition, differentiation, financial projection, intellectual property, pitching, securing financing, and more. Mentor-driven accelerators give entrepreneurs access to feedback, providing validation of their model and helping them tweak it as they progress.
One job of accelerators is to help their startups secure financing to grow their business. For example, graduates of Tennessee’s nine accelerators raised $17.5 million in 2012. Accelerators are also valuable for investors, because they know that startups which have completed an accelerator program should be better prepared to run and expand their business, and therefore more desirable for investment. In a way, accelerators vet companies for investors.
Whether it’s through mentors, accelerators, or another program, startup companies need to take advantage of their local resources. Check local organizations and state government offices to see if they offer any assistance or benefits. For example, in addition to overseeing Tennessee’s nine regional accelerators, Launch Tennessee (LaunchTN) has programs that help businesses commercialize emerging technologies developed by the state’s research institutions. LaunchTN also hosts sector-specific events that bring together entrepreneurs, mentors, researchers and investors from across the state and country.
Many states received federal funds from the State Small Business Credit Initiative to strengthen and support small businesses and small manufacturers. In Tennessee, LaunchTN, along with the TN Department of Economic & Community Development, created the INCITE Co-Investment Fund to spur additional private sector investment. Check into your state’s program here.
Events are another great way to network and get attention for your business from media, investors, potential employees and customers. Startup conferences like LaunchTN’s Southland bring investors to one place. You often also have the chance to exhibit and potentially win money for your company as part of the pitch competition.
There may be other special programs to take advantage of as well. For example, we hosted the first-ever statewide demo day in Tennessee yesterday, where 20 companies pitched to be chosen for ‘The TENN,’ our first-in-the-country master accelerator program. Only startups that have graduated from one of the state’s accelerators in the last year can apply, which is another reason why accelerators are beneficial for startups—they open doors.
The TENN is a three-month program that includes a statewide bus tour to meet with corporate executives at the top corporations in Tennessee. The teams will have access to a pool of Master Mentors, comprised of the state’s leading investors, entrepreneurs, and business leaders. They will travel to California and New York to network with entrepreneurs, investors and media.
Startups have the potential to create jobs and stimulate growth throughout the country, but they need help to succeed. With the help of mentors, accelerators, and community support, startups can find the resources they need to grow their companies. A healthy entrepreneurial ecosystem offers all a chance to participate.
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Charlie Brock is CEO of Launch Tennessee, a public-private partnership focused on supporting the development of high-growth companies in the state of Tennessee with the ultimate goal of fostering job creation and economic growth.