My Thoughts on a Local Startup Incubator / Community Network

I’ve heard many times over the past year or so how everyone, from Entrepreneurs to Investors to profitable Startups, agree that one of the most beneficial aspects of a Startup community that central Arkansas currently lacks is a true Startup incubator.  A few years ago when I started my consulting practice, I thought about how nice it would be to have a network or community where self-employed people like myself could meet up and share experiences.  The more I got involved in the Startup community as an Entrepreneur & Angel Investor the more I realized this “nice to have” has turned into more of a “great to have” in order to help local Startup businesses continue to move forward in the right direction.

Most people that are familiar with Startup scenes across the country will agree that almost every city or area which hosts at least 10 – 15 Startups has some form of an incubator, accelerator, etc.  There are also the more popular incubator/accelerators such as Y-Combinator, 500 Startups, and TechStars.   So, why not have one in Little Rock, Arkansas which would be focused on our own local Entrepreneurs, Startups, and early-stage businesses?

As I mentioned I had thought about this a few years ago but a combination of things made me put it off I guess, mainly because I didn’t think there would be enough interest to get people involved.  I’m happy to know that I was wrong about that.  So I thought I’d share a few of the random ideas I’ve had around this concept.

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An incubator/network/community/accelerator/(insert adjective here) will only be worthwhile if there is a lot of interest, a way for its members to collaborate, and a way for its members to benefit and grow because of it.   What I have in mind is having 4 different levels of participation:  1.) The Co-Founders of the incubator, 2.) Mentors/Advisors, 3.) Startups, and 4.) Entrepreneurs.  The Co-Founders would be responsible for putting everything together, facilitating the collaboration, scheduling the network get-togethers, and the evil-but-necessary administrative duties.  There would then be anywhere from 5 – 10 Mentors & Advisors who would be seasoned Entrepreneurs & people that have “been there, done that” and have a wealth of knowledge to share.  Startups would of course be any person or group that has either a solid idea, MVP (minimum viable product), prototype, or a new product/business that is currently operating.  Entrepreneurs would be anyone that has aspirations & goals to better themselves and the world around them with their ideas and innovation.  When a new Startup or Entrepreneur joins, a Mentor/Advisor would then be paired with them based on industry & need.  So if a specific Mentor/Advisor has a background in Marketing and a new Startup joins who is developing a marketing-based solution, then that specific Mentor/Advisor would be paired with that Startup to help get them going, give advice, and answer questions they may have as to what their next steps should be, what their options are, and other questions that any Startup might have and would benefit from asking seasoned veterans of that specific industry.

So what do the Startup & Entrepreneurs get?  Advice, help with their next steps, mentorship, assistance with writing executive summaries, constructive feedback from industry experts, and once the time is appropriate based on their status & progress the Startups will also receive assistance with funding options (angel investors such as myself that would be involved, other angel investors, angel groups, regional VC firms, SBA programs, investor networks such as AngelList, etc.).   But besides being just an incubator I would like for it to be a true community.  So even if an Entrepreneur doesn’t necessarily have a Startup or even an idea in mind they would still be welcome and encouraged to join because one aspect I see as being very beneficial is introducing Entrepreneurs, Designers, Developers, and Small Business Owners to one another.  Say one member is a great designer but isn’t that good at programming.  And another member is great at coding but lacks the design skills to make a product user-friendly or easy to look at.  This incubator/community will pair these people up and help potentially form the next Startup.  So you could also think of it as a Startup matchmaker.

I’d also like to encourage collaboration and involvement by having an annual “Showcase”.  Think, an expedited American Idol for local Startups.  What I envision is a showcase where 10 – 15 Startups pitch in front of a live audience and the Mentors involved in this incubator/community.  The live audience picks their 5 favorite Startups, who then go on to demo their product or business in more detail.  The Mentors then round down to the Top 2 and either the Mentors themselves or the live audience picks the winner.  The winning Startup then receives a to-be-determined amount of funding/investment.

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(okay, so our stage won’t be that extravagant…)

So then what exactly does the Mentor/Advisor get out of being involved?  Besides the benefit of being involved in the community, the Mentor/Advisor would receive a small percentage of equity into the Startup (something like .5 – 3% based on value, just like any member of a Board of Advisors or Board of Directors would) for their involvement, mentorship, time, and resources.   And if the Startup chooses to receive capital funding options then whoever is putting up that money (whether it’s the incubator itself, or investors) then those terms would be determined at the time of the funding round just like any investment process.

Now, these are basically just a few random ideas that I’ve been putting together for a while now.  I’ve been meeting with a few other local friends & colleagues in the Startup & Investment community who have excellent ideas about incubators and what they’d like to see and/or do, I’m just not going to mention those other ideas here because we’re still in the process of thinking those through and I wouldn’t want to share anyone else’s ideas on my own accord.   But I will tell you that my ideas discussed above are probably only the beginning!  So once we get some more things figured out, I think we’ll be able to take the “best ideas” and create something really interesting, fun, and beneficial to the whole local Startup community, from Entrepreneurs, to Startups, to Angel Investors, and even VC’s around the area.

Obviously the most important goal to address first is to make sure it’s beneficial to everyone involved.  This is one of the most important aspects we’re currently thinking through.   Will this also be some form of a group angel fund where Investors are involved and put in an initial flat investment which then gets distributed to specific selected Startups?  Will this be a group angel fund or syndicate where each Angel Investor decides for him/herself which Startups they invest in and how much capital they contribute in each deal?  Will there be membership fees for Investors and Startups to cover the administrative costs?   Or will we not even think much about the investment part yet and instead focus primarily on the collaboration & facilitation of that?   We don’t know the answers to these very important questions yet.   But I could definitely see this as becoming not only a network to help Startups and Entrepreneurs get to their next step and interact with one another, but also as a way for Startups to receive the funding they need in order to move forward and grow.  I could even see this as something that turns into more of a local type of Y-Combinator incubator model where additional funding is provided internally and/or externally from Investors  if when we’re able to clearly demonstrate how it could directly accelerate or assist in the success of a few of our local Startups.

I also want to make sure that this is inclusive and a collaborative effort.   Are you interested in being a part of something like this, either from a Mentor/Advisor, Investor, or Startup/Entrepreneur standpoint?  If so, please do contact me or get engaged in the conversation.   I’m looking to do this as a group, and we (the whole community) welcome all suggestions, opinions, input, and requests to be involved.  That’s my whole point in posting this…to ensure that it’s a collaborative effort and that any needs that we haven’t thought through yet are addressed so that we can make this as beneficial as possible.

We have the entrepreneurship mindset in the area, we have the talent, we have the investors that love to help, be involved, and add value…. Do we as a community have the passion & desire?  The answer is YES.   Then the next question is this:  Is the need there for an incubator such as this and would it be beneficial?  If so…. Let’s do this.

Feel free to let me know your thoughts!

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