JEFFERSONVILLE — It’s not often that an organization involved with Indiana’s state government admits a weakness, especially when it comes to business. But Elevate Ventures, an organization that supports entrepreneurs and claims the state as a “major” client, is, and its target is a lack of innovation.
Indiana is often heralded as a great place to locate a company, and other groups seem to agree. Forbes places the state in the top 13 for “best states for business,” while CNBC gives Indiana the 16th spot. The Tax Foundation says Indiana has the eighth best business tax climate.
When it comes to entrepreneurship, however, Indiana is close to last, Elevate Ventures points out. The Kauffman Index places Indiana in 44th out of 50 states — a result of low job creation and paltry share of employment for firms less than six years old.
Elevate Ventures, which manages the state of Indiana’s business investments, is helping to fix this by funding a local initiative all about promoting entrepreneurship, both in Southern Indiana and Northern Kentucky (south of Indianapolis and north of Bowling Green, Ky.).
1804, named after the year Lewis and Clark started their expedition west, is an entrepreneurship center also funded by Samtec’s Blue Sky Network and the Paul Ogle Foundation.
At entrepreneurship centers, startup employees work alongside professionals who can provide them services, such as accountants, lawyers, investors, as well as other entrepreneurs, said Madison Hamman, 1804’s interim director and a Blue Sky employee.
1804, which is a nonprofit, was created in December of last year and has offices on Market Street in Louisville. So far, Hamman and his co-worker, Justin Bailey, have met with around 70 local start-ups, allowing them to treat their offices like a “clubhouse”: a place to work and occasionally meet other innovators. But by mid-October, 1804 will begin rolling out actual services.
The nonprofit’s first order of business is partnering with Kertis Creative, a Louisville company, to help startups make “creative content,” such as videos, for their business. Hamman also wants to start offering marketing help and other services to entrepreneurs. 1804 will eventually bring in service providers as well and continue to offer networking opportunities for its members.
1804 is expanding its reach to Southern Indiana by partnering with Maker13 in downtown Jeffersonville. The nonprofit will move into the makerspace, which is filled with 3-D printers, welding machines and other equipment, by the end of the year. Eventually, 1804 might expand into Maker13’s building's unfinished second half.
Since 1804 doesn’t offer many services currently, the nonprofit doesn’t charge its startups, but Hamman plans to start rolling out paid memberships in 2018.
He shouldn’t have a problem finding more clients. The region has around 150 startups, according to Hamman.
“We sort of lack density,” he said.
What Hammans means is that while there are startups in the region, they’re working separately from each other — “totally sealed off without any common location.”
That’s one of the reasons Hamman agrees with Elevate Ventures on the state of Indiana's entrepreneurial landscape.
Another problem, Hamman said is “storytelling.” Many startups don’t believe that there is enough funding in the area for them.
Hamman thinks 1804 can help with both of those things. He’s already started educating startups about where they can find more investors.
1804 keeps a list of all the capital resources they know about. Startups have come to Hamman claiming that they have no way of securing more funding, but they’ll only have tried three or four of the places on his list.
Chris LaMothe, the CEO of Elevate Ventures, said he thinks the state has lacked focus toward entrepreneurship. The “underpinnings” are there, but not the necessary initiative to expand upon them.
What a lot of startups need, along with mentoring, is funding, LaMothe said. Including 1804. Elevate Ventures is providing $1.5 million to the nonprofit for its first three years. Blue Sky and the Ogle Foundation, along with Old National in Evansville, are matching that with their own, combined $1 million contribution. Elevate Ventures will decide whether or not to renew its funding support after the three years are up.
More help for entrepreneurs in the area might mean more jobs for the region. 2013 report in the Review of Economics and Statistics, found that new businesses account for 20 percent of gross job creation. It also found that 40 percent of the jobs created are gone after five years. But if a startup survives, it can grow more rapidly than its older counterparts.