Homegrown Companies… Where are they?
Yoko Ono once said, “keep going until your efforts start to make things better in your hometown.”
Start-up companies are necessary for economic development and job creation. According to the Kaufman Foundation, from 1977 until 2005 start-ups were responsible for the creation of 2 to 4-million jobs per year, while existing firms removed up to 5-million jobs every year except for seven.
There has been a rapid decline in start-up companies in the U.S. for decades. According to CNN, the key reasons behind the lack of start-ups is due to the “shift in national chains versus ‘mom and pop’ shops,” regulation and big companies that are becoming more entrepreneurial.
Additionally, and the one challenge we’re uniquely positioned to address is the lack of significant financing available to start-ups given the reluctance of Venture Capital Groups to invest in companies seeking less than $1-million and unknown growth potential. Angel Groups provide the necessary financial resources and support to start-up companies needing seed-capital and growth-capital of typically less than $1-million.
Not only do Angel Groups offer support through due diligence, expertise feedback, and more. Communities are also supporting entrepreneurship through youth programs, college foundations, and incubator networks. The Federal Government is also stepping up by working towards an education to America’s youth surrounded with entrepreneurial ideals and encouragement. Regardless of the support offered to individuals seeking entrepreneurship for their career path, mLive states that of the 83 counties in Michigan only 3 added new businesses, 71 had less than 20 percent business loss and 9 had more than 20 percent business loss in 2016.
The question, how do we increase the number of start-ups in Michigan?
1. Community Support
To increase the number of start-ups in a specific area, we need to develop more support from the community by explaining the job creation and economic development incurred by start-ups, and rallying professionals to assist.
As previously stated, Venture Capital Groups, banks, lenders, etc. do not typically invest in start-up companies unless there is a highly developed business plan with proven growth-potential. If the only financing available to entrepreneurs is family, friends, and Angel Groups, and there are only 7 Angel Groups in Michigan, how can we expect a plethora of start-up companies.
Although there are many experts in every community that can assist entrepreneurs facilitate their dreams, increasing the availability of education through college courses, educational workshops, seminars, and more can improve the likeliness that individuals move forward with start-up development.
Start-ups are essential to job creation and economic development in your local community, find a way to utilize your skills to develop your own entrepreneurial goals or facilitate someone else’s.