Sean C. Morgan
Sweet Home has joined seven other cities in Linn and Benton counties in pooling funds to hire a “venture catalyst,” who will help connect local budding entrepreneurs to the resources they need to build successful and lasting businesses.
The eight cities participating are Adair Village, Brownsville, Halsey, Harrisburg, Lebanon, Monroe, Philomath and Sweet Home.
The program includes “accelerator” programs at the University of Oregon in Eugene and Oregon State University in Corvallis along with the local Regional Accelerator and Innovation Network program in Eugene.
RAIN is a state-funded consortium of government, higher education, and the business community which aims to help start or grow local business. Staffed by people who have been successful in business establishment and recruitment themselves, its mission is to help entrepreneurs in the South Willamette Valley and Mid-Coast “turn ideas into high impact, innovative, traded-sector companies that can grow and thrive locally.”
Several years ago, a lot of great ideas were coming out of the universities in Eugene and Corvallis, but they had no people, programs or capital to wrap around them, said Caroline Cummings, Oregon RAIN venture catalyst and executive director. RAIN, a public-private partnership that has received more than $7 million from the state legislature, was developed to provide that missing link.
The RAIN program has found success in the Eugene area, said Lebanon City Manager Gary Marks. “It’s worked really well, and folks have done very well at launching their ideas.”
Officials from Linn and Benton counties began looking at RAIN Eugene, Marks said. Representatives of the eight cities discussing regional economic development started talking about hiring a venture catalyst like Cummings.
“Eight cities did something novel,” Marks said. “We all came together and applied for a grant.”
The new RAIN Linn-Benton has received a $70,000 grant from Business Oregon Rural Initiative, to be combined with $20,000 from the eight cities, to fund the position. Benton County has agreed to pay $20,000, and RAIN will seek additional funds from Linn County and the Ford Family Foundation to help run the program for a second year and make it sustainable.
Contributions from the eight participating cities are based on population.
“It has to be a regional approach,” Cummings said.
Sweet Home City Manager Ray Towry said the committee that awarded the grant was impressed by the local group’s regional approach and what it had in the application.
“We asked for $50,000,” Towry said. “They liked us so much, they gave us $70,000.”
Cummings said the local effort was unique in the level of cooperation between the cities.
“We’ve never had a partnership at this level,” Cummings said. All of the mayors have agreed to update strategic plans to indicate that each city supports emerging businesses.
The city of Monroe was the applicant for the grant funds from Business Oregon, the state’s economic development agency, Cummings said, while Lebanon organized the city funding.
The applicants for the venture catalyst position are “recognizing this is a really special partnership,” Cummings said. Cummings said RAIN Linn-Benton has received 22 applications for the venture catalyist position thus far, and they’re high-caliber. The position closes on May 20. The search committee, which includes representatives from Halsey, Lebanon and Harrisburg, will make a decision and hire a venture catalyst to begin working between June 11 and June 18.
The program’s approach is something possibly novel to cities as well.
The idea is to build an entrepreneurial ecosystem in Linn and Benton counties, Cummings said.
Marks said he has always thought cities ought to look in their own communities and develop what’s under their own feet – “look inward rather than outward.”
“For me personally, as someone who’s been in city management, I’ve seen a lot of efforts where cities go out and identify a business elsewhere that’s been successful (and recruit them),” he said.
The idea is to help to pair budding entrepreneurs with funding sources, investors, Towry said.
“Our goal here locally is to provide an environment to help businesses succeed whether they’re existing businesses or new businesses. We’re trying to crowd-source economic development. We want to put a system in place where a person who wants to start a business in Sweet Home has a process to go through.”
RAIN steps in when someone presents an idea for a business.
An entrepreneur contacts RAIN, Marks said, and RAIN begins a process that provides mentors and potentially “angel investors” to help launch local business ideas.
RAIN is looking for high-growth ideas, with national and international sales, Cummings said.
“What we do is we help catalyze people’s ventures. Having the relationship with the eight cities, you could go to your city hall, tell them, ‘I have a business idea. I need to have a meeting with the venture catalyst.’”
City officials will connect the entrepreneur to the venture catalyst, who will sit down and assess the entrepreneur and their capacity to take on the venture, Cummings said. The venture catalyst will give the would-be entrepreneur some homework.
That may consist of researching the competition, Cummings said. The entrepreneur may need to find out who is the biggest competitor or figure out how much it will cost to make and sell the product or service.
Potential entrepreneurs are given 30-day access to a Palo Alto Software program, which facilitates the process of developing a professionally formatted, investor-ready business plan, Cummings said. That process helps the venture catalyst connect the entrepreneur to appropriate people, mentors and services.
About 50 percent of those who approach the venture catalyst disappear at that point, Cummings said.
For those who return, the venture catalyst can develop a program tailored to the entrepreneur’s needs.
RAIN may connect the business to programs like the OSU Advantage Accelerator, Cummings said. It just depends on where the business idea is.
The venture catalyst primarily focuses on startups, Cummings said. Existing businesses are referred to Business Oregon for assistance, while small businesses are referred to local small business development centers.
RAIN doesn’t turn anyone away, though, Cummings said, and it was able to help a Florence woman find new opportunities for her personal care products for use under prosthetic devices. The product is now in testing with veterans across the country.
RAIN will tag team with Business Oregon and small business development centers to provide a full spectrum of services, Cummings said.
“You have to have a good network to really rally these investors,” Cummings said. “When an entrepreneur has resources wrapped around them and mentorship, their chance of success goes up to 50 to 80 percent.”
Without it, just 13 percent of businesses make it past the first 10 years, Cummings said. “We want to move the needle and increase that percentage.”
She added that nearly all new net jobs are created from startups under 5 years old.
Cummings has personal experience with both success and failure in business, she said.
She has experience launching startups, she said, raising just shy of $1 million in her first two. The first one failed. The second one, a mobile real estate marketing tool, succeeded, and she sold it. Her goal was to sell it in five or six years, but she made it after two years.
It was the one that failed, “basically Pinterest for health and wellness, that taught her the most, Cummings said. She made mistakes. The timing was off and the business “blew through $650,000.”
Cummings said she has seen RAIN work, taking a startup Eugene biotech firm from three employees to 30 in just three years. The CEO of that company will talk about the growth as a speaker at the Willamette Angels Conference in Eugene this week.
RAIN Eugene matched him with capital investors, creating a great example of quick expansion, Cummings said. The new positions were all high-wage.
Towry said he hopes the move will “create jobs and contribute to the local economy.”
“It’s a piece in our puzzle, a step in the ladder,”
Looking ahead, “hopefully, we’re going to have some real live cases in our community that we can point to,” Marks said.