At the 2010 annual meeting of the Greater Providence Chamber of Commerce, Ximedica co-founder and CEO Stephen Lane challenged those in attendance to help transform Rhode Island into “The New Business State.” It seems that people were listening.
2011 started with Details magazine’s February issue naming Providence one of the seven U.S. cities to have caught “startup fever.”
At about the same time, President Barack Obama validated that imprimatur by naming Providence startup incubator Betaspring to be part of its TechStars Network, a global initiative designed to help connect experienced business leaders and investors with promising young entrepreneurs, with a goal of creating 25,000 “new economy” jobs by 2015.
In early fall, the state’s congressional delegation augmented the startup energy by securing $13.1 million in funds from the Small Business Jobs Act of 2010 and promptly sending $2 million to Betaspring, $9 million to the Slater Technology Fund and the remaining $2-plus million to the R.I. Economic Development Corporation’s Small Business Loan Fund.
Most recently, the city launched an innovation investment fund that will make $50,000 convertible-note investments in technology startups that locate in Providence. The program will work in concert with Betaspring, the Slater Fund and the Cherrystone Angel Group.
Much of the popular focus for the startup ecosystem has been on technology companies. But there is more than a tech boom brewing in the state. When looking at the future, social ventures are playing nearly as important a role in the state’s entrepreneurial culture.
Brown University was home to the first Dell Social Innovation Competition Semi-Finalist Fellowship in August, during which 15 aspiring entrepreneurs gave their “anything-but-money” pitch to 31 mentors.
“That’s our strength … this willingness to help,” said Kelly Ramirez, executive director of Social Venture Partners Rhode Island.
“In our organization alone, we have more than 60 mentors – some pretty impressive business and community leaders. We log more than 3,000 probono hours annually in our programs,” Ramirez said, while noting that in Providence there’s more mentoring being done probono than anywhere else in the U.S. that she can think of.
SVPRI works with more than 125 ventures, about 80 percent nonprofit and 20 percent for profit, with the for-profit side growing, Ramirez estimated.
“It’s this virtuous cycle. Students find out about different models and realize [they can] make money and do good at the same time,” she said.
In the last five years, all the local universities have added some sort of social enterprise course, minor, or major, Ramirez added – a trend reflected across the nation.
In addition to Betaspring, other resources for startups are the student-led design conference A Better World by Design at Brown University, the Rhode Island Center for Innovation and Entrepreneurship, and the Business Innovation Factory.
Why the growth?
“I think it’s one of those questions of the chicken and egg … and I think [Providence] just has the egg,” said Alan Harlam, director of the Social Innovation Initiative at Brown’s Swearer Center for Public Service. “I think we had a lot of the momentum, and the momentum created energy around it.” •
