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Second Stage Entrepreneurs - Paul Bateson

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This presentation was part of the Growing Entrepreneurial Communities Summit, a practitioner-focused summit designed to help economic development and small business practitioners effectively create economic growth through entrepreneurship in local communities. The 2018 Summit, subtitled Entrepreneurship on the Edges, focused on providing information and practitioner insight in how to effectively develop disadvantaged urban and rural communities using entrepreneurship-led development strategies.

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Second Stage Entrepreneurs - Paul Bateson

  1. 1. Growth Entrepreneurs: on the Edges April 26, 2018 Paul Bateson, Edward Lowe Foundation
  2. 2. We’ll Talk About - What is a “Growth” Entrepreneur? - What is it they provide our communities? - How are they different?
  3. 3. Edward Lowe Foundation • Advocate entrepreneurship as a strategy for economic growth and community development. • National operating foundation • Provide second-stage entrepreneurs with greater support.
  4. 4. Second-Stage Growth Companies • Privately held • 10 - 99 employees • $1M - $50M revenue • Past startup • Intention to grow • Focus an External Markets
  5. 5. Why Second-Stage Companies? They have the greatest positive impact Jobs In a position to expand New income Talent Culture Future philanthropy
  6. 6. YourEconomy.org (YE) An online information tool that allows users to analyze business activity from the community level, to the state level, and across the country. YE tracks the performance of more than 43 million U.S. businesses from 2016 back through 1997, providing detailed information about jobs, sales and establishments.
  7. 7. What Can You Count On? In the midst of great uncertainty, growth companies continuously hold strong on job creation From 2012 through 2016, second-stage companies only represented 15.5 percent of all U.S. business establishments but generated 38.6 percent of all jobs and 36.3 percent of all sales.
  8. 8. United States Data 2012 2016 14% 15.5%
  9. 9. Company Stages Don’t Look Alike • Each stage has different: • Needs • Methods of learning • Ways they communicate • Cultures
  10. 10. Start-Ups & Early Stage • Hungry for information and education • Easier to reach them and get their attention • Operational more than strategic • One-to-many programs work well
  11. 11. Growth Companies • More strategic than operational • Expanding teams and markets • Challenging to reach • Rely on trusted sources • Peer-to-peer is important • Need to feel loved
  12. 12. External Market Entrepreneurs • Serve beyond local market • Intent and capacity to grow significantly • Increase the volume of income into the region Local Market Entrepreneurs • Serve within local market • Growth potential limited to market area • Increase the velocity of money circulating within the region
  13. 13. The Power of Existing Businesses Center on Budget and Policy Priorities • Jobs that move from one state to another typically represent 1% to 4% of total job creation. • Jobs created by out-of-state businesses expanding into a state by opening new branches represents 1/6th of total job creation. • “Home grown” jobs contribute more than 80% of total job creation in every state.
  14. 14. Jobs from Resident Companies
  15. 15. What Causes Growth? (Stage 2 Companies) It is not industry and location that cause growth. It’s what happens inside the company.
  16. 16. Mr. Lowe Thanks You!

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