There is a tremendously important role for community colleges in educating a new generation of entrepreneurs, and on some campuses already there are great examples of excellence in classroom learning for current and future founders. We know at the Kauffman Foundation that community colleges around the country are leading the way in offering diverse curricula to teach students how to think like entrepreneurs, how to develop a business model, write a plan, operate a franchise, grow a venture, and more. Indeed, our investigations and anecdotal evidence indicate that the center of gravity in entrepreneurship education is shifting from four-year schools to community college campuses that are better connected to their local economies and offer increasingly diverse entrepreneurial opportunity with a lower barrier to entry to a broader segment of the population. Put simply, at their best they do it cheaper, better and faster than most alternative educational pathways to starting up. More on this in future posts.
But at Kauffman we see even greater potential for these institutions, which is why in May we announced a new initiative that we think can help move community college campuses to the center of their local and regional entrepreneurial ecosystems. Echoing a concept famously originated by entrepreneur and educator Steve Blank, for students to really understand how to start a company they’ve got to get out of the building. If we are successful, current and prospective entrepreneurs will look to community colleges not only to teach them how to start a business, but also to nurture new companies, connect them to early stage funding, to mentor the founders, equip them for growth, and in so doing, feed vibrant local and regional startup communities.
The initiative is called Innovation Fund America. We have partnered with Lorain County Community College (LCCC) to take their Innovation Fund, which has done so much for the entrepreneurial ecosystem of Northeast Ohio, and replicate it in other communities around the country. At the heart of this program’s success is a philanthropic investment fund offering early stage grants and structured investments in young technology businesses—run by either community college students or local entrepreneurs with high growth potential. Recipients, who must agree to remain in the fund’s operating region for the duration of the investment period, are incubated as they meet key milestones and prepare to seek follow-on funding, and they agree to replenish the fund if they are successful. The Lorain fund has made nearly 100 awards totaling almost $6 million, and has led to $62 million in follow-on funding, as well as creating hundreds of internships and permanent, well-paying jobs in Northeast Ohio. We hope we can be successful in reproducing it.
LCCC and Kauffman intend now to prove the flexibility of this model by piloting it in three communities, which we will identify over the next several months. In time, we look forward to helping community colleges across the country grow their own Innovation Funds in an effort that I believe will show how critical community colleges are to locally driven entrepreneur-led growth.
It is important to note that we do not intend to foist a one-size-fits-all solution onto participating schools, and that this will require considerable effort and resources on the part of any school that chooses to take this on. Lorain and Kauffman will provide extensive counsel, comprehensive tools, and, as appropriate, some funding, but to borrow a popular advertising slogan, we say – you can do it, and we can help.
I see this effort as complementary to, even strengthening a college’s existing classroom-based entrepreneurship curriculum offerings. In an immediate sense this is true because the young companies taking advantage of the Innovation Fund will be required to offer internships to local students, giving them a vital learning opportunity and an unvarnished look at life at a startup. But I think even more importantly, the Innovation Funds will create a community of high-potential startups on campus that will demonstrate to students what is possible in their community. There are, by most estimates, nearly 13 million credit and non-credit students enrolled at community colleges around the country; all of them should be exposed to entrepreneurship at its very best in their own communities. They should see real examples of entrepreneurial opportunity as they begin to plan, or repurpose, their careers. Some will seek further education by transferring to a four-year school; some will pursue mid- or early-career vocational training; but hopefully many will see entrepreneurship lessons brought to life on their campus as Innovation Fund companies and choose to follow in those footsteps.
The Innovation Funds will significantly enhance a college’s commitment to workforce development and growing the local economy. They will connect founders to mentorship and capital in areas underserved by traditional sources of both. With this initiative we seek to bridge the funding “valley of death” for startups, but also to prime the pump in capital and talent deserts, over time helping to turn these communities into vibrant entrepreneurial ecosystems.
If you are interested in learning more about the Innovation Fund America initiative or are an institution that would like to be considered for the program, I urge you to visit www.entrepreneurship.org/communitycolleges/ and complete a preliminary survey.