By guest authors Irina Patterson and Candice Arnold
Tim: As I said, in southwest Florida, we had never had an angel fund prior to August 1, 2010. Just because it doesn’t exist doesn’t mean we can’t build it, not only in our region, but in the state of Florida. I think we’re emerging. I think there’s more angel activity going on. I believe that there are more entrepreneurs coming into the state and that there are more and better business plans.
I think our university structure is going to pay dividends in the future. Again, another reason why I call our region emerging is the state university in southwest Florida, Florida Gulf Coast University, is celebrating its 12th year of existence. Compare that to Stanford in California [opened in 1891], and Boston, with centuries-old institutions [Harvard was founded in 1636 and Boston University in 1869]. Our university, the major anchor university in our area, is only 12 years old.
We really haven’t given the university its opportunity to make its impact on our region and on the economic development and the entrepreneurial ecosystem. We just a need a bit more time, but we also need more activity.
I think one of the biggest challenges that is facing Florida is the ability to accept failure. One thing I’ve read about Silicon Valley that’s kind of a hidden asset, is that even if a company fails out there, if it attracts funding and then goes on to fail, you’ve got the experience of that management team and the workers at that company, experience of what it takes to do a startup.
And while that company failed, that management team and the workers have gained valuable experience for their next startup. All is not lost when there’s failure.
I think that the state of Florida, because we have a lot of migration from outside the state, tends to be a little bit more conservative and therefore may not accept failure, but failure is all part of entrepreneurship and investing.
Irina: What do you think Florida could learn from Silicon Valley and other regions?
Tim: There’s a lot of exchange of information. I’ve studied Silicon Valley, Boston, Research Triangle Park [in North Carolina], Pittsburgh, Cleveland, Atlanta, and Philadelphia.
Silicon Valley, I don’t think that could ever be duplicated, just from its sheer size and magnitude. When you look at the amount of funding that happens in Silicon Valley and the state of California, I think it ranges between three and five times what happens in Massachusetts, which is the second state on the PwC tree report [PricewaterhouseCoopers is a global professional services firm].
[Silicon Valley], it’s an animal unto itself. But I think it’s important to study not only Silicon Valley and Boston and those leading areas, but to look at other areas, like Pittsburgh and what they’re doing, and what the state of Pennsylvania has done with the Ben Franklin Technology Partnership, what Philadelphia’s done with trying to establish a creative class as they’ve done in new media, and so on. I guess I’m a student of entrepreneurship and entrepreneurial ecosystems.
I think we all can learn from each other. I think that entrepreneurship is the secret to economic development and diversification. And at the source of capitalism is capital. You need capital. You need investment in order to make capitalism work.
Irina: Ninety-nine percent of entrepreneurs who apply for funding get rejected, sometimes repeatedly, and some of them get tired and give up. What would be your advice to entrepreneurs who get rejected for funding over and over?
Tim: If you look at it as a marketplace, if you look at entrepreneurship as the marketplace of ideas, then the entrepreneur must take data from the marketplace and modify their idea and their business plan.
One of the things I always say is, “If your business plan doesn’t change seven to ten times along the path of fundraising, you’re not listening to the market.” There’s intelligence about your business plan that can be gained in every interaction with a potential investor.
Let me qualify that by saying a real potential angel investor, not people who say they’re going to go out and fundraise for you, not people who say that they’re investors but don’t have the capital to invest.