If your business is strong enough, the investment will find you. So it follows that if you want a more active local investment community, you need stronger businesses. That’s what prompted three established local entrepreneurs to launch here the now expanded and celebrated early stage technology accelerator program DreamIt Ventures in 2008. More than five years later, it’s all about developing a focus.
“The return for investors and the regions in which we work has been huge,” said David Bookspan, the Monetate chairman and cofounder who also helped launch DreamIt with Steve Welch and Mike Levinson. He’s speaking both of the financial returns, like with SCVNGR and Adaptly, and the branding of having a Philly accelerator on a national stage.
Its initial program growth — to Austin and New York City and Tel Aviv — was with its call for general scalable technology startups. But beginning with DreamIt Health here and launching in Baltimore and followed by the Comcast-backed Minority-Access program here and in New York, DreamIt is finding a specialty that complements their experience and the region’s they call home.
“It becomes contagious for a region,” said William Crowder, of introducing risk to a region’s monied interests by telling stories of success that follow a given region’s strengths. In Philadelphia, that means though retention is challenging for general tech startups, it’s much easier to retain those in healthcare.
So if you know what your region’s traditional roots are, how do you start the process? Whatever that focus is, you need a pull to start.
DreamIt has been a magnet for Philadelphia, said Bookspan, attracting entrepreneurs from Sweden and Honduras and elsewhere. Whether they’re retained or not, that’s a question for the politicians, he said.
“That we’ve been able to bring companies from around the world, that’s the first step in economic development,” Bookspan said.
Clearly though, the DreamIt team is sensitive to the perception that they should be part of the solution for creating an environment that keeps companies here. (That interest may be encouraged by its partnership with state-backed Ben Franklin Technology Partners, which has a clear retention mission.) Look no further than the forthcoming DreamIt HQ inside bustling innovation hub 3401 Market Street.
“You have to geographically cluster the resources around the effort,” said Bookspan of building a real tech stronghold. “People talk. The creativity that emerges can’t be created otherwise.”
In summer 2013, Technically Philly had a recorded roundtable discussion with Bookspan, Crowder and fellow managing partner Karen Griffith-Gryga — all of whom were being prodded by exciteable fellow DreamIt cofounder Steve Welch from his perch behind the camera.
First, hear about how DreamIt Ventures was founded and then added its Health and Minority Access programs.
The development of tech markets, like Philadelphia, outside of Silicon Valley is happening nationwide, billed as ‘the rise of the rest,’ and in places, like here, the urban core of a region is taking the lead.
“Proximity matters. The region benefits when people can run into each other at the coffee shop without a phone call or an email,” said Griffth-Gryga and that doesn’t come with the suburban-style drive-thru.
Second, listen to creating a regional distinction or accelerator niche to develop a program.
So building a great place to live is as much a part of building tech hubs as tax policy.
“You have to make your city a great place. You have to make it sticky,” said Crowder. That’s one of the biggest changes since the 1990s dot com bubble, that business communities are developing where the people want to be, not where the money already is. That, along with an openness that has allowed these other markets to flourish.
“There’s more of a willingness to share,” he said, of ideas and processes.
Third, watch a discussion about the need for density and leveraging existing resources.
That’s not to say that a region aiming to bolster its ability to attract and retain job creators and innovation builders of the future can focus only on restaurants and movie theaters.
When you talk to Griffth-Gryga, she won’t go a few sentences without saying “early stage capital” and how crucial it is to develop local risk-tolerant investors.
If you gave her the economic development steering wheel for a fledgling market, she’d throw whatever money she could drum up toward a starter fund that would help get the market to follow and stronger businesses to flourish. Think of the 30 years of Ben Franklin Technology Partners or what the pitch is for StartupPHL, just a $6 million match that is meant to radiate out to something bigger.
For his part, Bookspan, who is part of the DreamIt founding trio that has always barked loudly about the need to improve the business tax climate of Philadelphia, made this point clear. If given the chance, he would not only wipe out the city wage tax for any company that increased its employee head count by 20 percent or more in a given year, he’d also give them a tax credit.
Fourth, hear about how building a company anywhere is getting easier and how that can be changed.
But that’s the kind of talk that often leaves economic development bureaucrats feeling burned, when a company reaps tax benefits and then leaves. Shouldn’t we only give to those who will promise to stay here?
“Ultimately it has to be what’s best for the founders,” said Bookspan, balancing the civic goals of retention and a need to deliver a return to investors. Of the more recent companies that have left, like Wharton startup successes Warby Parker and and Invite Media, which retained a developer office in Center City after its Google exit, Bookspan said they retain Philadelphia roots and that’s something to take pride in.
“There’s no shame in having a piece of a very successful business from here.”
Fifth, listen to conversation about measures of success and where a region’s hub ought to grow.
Knowledge is power!
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