WHY SUPPORTING EARLY STAGE ENTREPRENEURS IS CRITICAL TO OUR COMMUNITIES
— Written by Shana Ostrovitz
Being a part of the entrepreneurial ecosystem in South Florida means I am part of a lot of conversations about the resources and opportunities needed to build and grow a successful business. There are varying ideas around which resources and support are best ( I have my own bias on this of course) but one thing that isn’t always addressed so heavily is the why. Why should we support these budding entrepreneurs? Why should resources be allocated to those who haven’t proven anything yet or who can’t hire a bunch of employees yet?
We see attention and money often allocated to established businesses. Everyone seems to want the next Amazon location in their backyard but aren’t fighting as hard for the next Jeff Besos.
As I look at our society right, dealing with the unsettling and tragic events taking place all across our country and the impact of hitting the one year mark of the unique changes that came unexpectedly to our lives due to COVID -19, I believe more than ever that early- stage entrepreneurs are the critical foundation for profound social change.
As Clay Christiansen and his colleagues wrote in their Harvard Business Review article, we see early-stage social enterprises as “catalytic innovators” that produce disruptive innovations primarily because they come from outside the ranks of the established players. But too little capital in the social sector is directed to these young efforts, with resources often flowing instead to more mature entities and supporting existing solutions, delivery models, and recipients. These legacy organizations often do great work in their targeted areas. But more innovation is needed — and needed now.
I’m fortunate that my work allows me the opportunity to be surrounded by innovators and creatives taking on the big challenges they see in the world today. As the Executive Director of 1909, I’m in the foxhole with entrepreneurs on a daily basis and get to witness their stories first hand. They are not sitting in fear or anger waiting to be saved, they are in action — — building the solutions they believe are needed to solve the problems they face.
What I also have the benefit of witnessing is the generosity and support that entrepreneurs provide to their community- even when they are struggling themselves. Through the last year I have seen founders who are completely bootstrapping their own efforts and living paycheck to paycheck stepping up for others.
When we launched our PROJECT 1909 micro-grant program to support small businesses in West Palm Beach, we were targeting larger companies and wealthy individuals in our community. What we saw was shocking. We saw a large number of our early stage members donate to the cause. Those who were figuring out how to survive themselves, were donating in droves.
The shock led me to do some research on the charitable habits of early stage entrepreneurs. What I found was pretty enlightening. A report by the Fidelity Charitable Gift Fund and Ernst & Young finds that entrepreneurs are highly likely to give to charity — regardless of their income level.
Of the 150 CEOs and founders surveyed, 89 percent donate funds, via their company and personally, to a variety of charitable causes. In addition, 70 percent donate their time (on top of financial contributions). Apparently, this group takes “sharing the wealth” literally.
Entrepreneurs have a profound impact on American society, as a powerful force for economic growth, productivity and employment — and philanthropy.
So, if early stage entrepreneurs are the catalyst we need for innovation and social change and prove to be huge support systems for our community at large, why aren’t we supporting them as much as we support the larger established companies?
I don’t necessarily see it in that we have to support one or the other, but I think it’s time we chose to make the battle of early stage entrepreneurship a way of the past and focus more efforts and resources to help them bring their ideas to life.
At 1909, we applaud hard work and big visions; drive and dedication are two essential ingredients of success and you won’t taste victory without them. But grinding away at the expense of your health, happiness, and relationships? Not here. Not now. That’s too high a cost.