When designing an accelerator, economic developers face the question: Should access be strictly limited to entrepreneurs residing within our community or region, or be open to anyone regardless of his or her geographic location? What is the accelerator’s target market or geographic reach? If you plan to create an accelerator that is sector (industry vertical) focused, most likely applicants could be located anywhere in the U.S. or overseas. Thus, the conundrum for economic developers: should you place geographic restrictions on applicants, or not? If you accept applicants that are located outside of your community, will they stay after they complete the program, or return to their home communities? Many—if not, most—well-known accelerators (Y Combinator, TechStars, to name a few) are blind to location. Of course, they are venture or investment driven models, not economic development driven. These well-known accelerators seek the best companies and location is not a factor. Nevertheless, I have had countless conversations over the past year or so with economic developers who plan to create a sector focused accelerator that will admit entrepreneurs regardless of whether they reside—or, plan to reside—in the community. They are following proven models, but will they ultimately achieve outcomes that will best benefit their communities and satisfy their stakeholders? Being very clear about your goals and outcomes is critical. If you seek to maximize the number of companies and jobs created in your region, then taking a local approach is a better bet. Design a program that will aim to recruit entrepreneurs from your community or region, and serve their needs. When making a decision, also consider the use of public, or taxpayer, dollars. How comfortable will your funders be when local tax dollars are used to assist out-of-area companies (that may not intend to remain in your community after the complete the accelerator program)? On the other hand, one could easily argue that widening the geographic reach, or being blind to the location of the applicant entrepreneurs, has definite benefits: building community brand as a place that welcomes and supports high-growth startups, and attracting startups from outside of the region to relocate into your community. Before determining your approach, have frank discussions with your stakeholders and financial supporters, and build consensus around clear goals and targeted outcomes.
- Targeting early stage companies with the right entrepreneurial support model (to create and grow successful businesses)
- What is the value of a Startup Weekend? (Hint: It’s not starting businesses.)
- Incubation is the right model for a “Grow Your Own” strategy (Part Two)
- The importance of “Grow Your Own” (Part One)
- Can a culture of entrepreneurship be created?