Backed by a two-year state grant, Central Virginia economic development officials are developing an organization to support entrepreneurs survive and thrive while building and growing their businesses.
The Central Virginia Partnership for Economic Development this week approved a two-year $548,000 grant to jump start efforts to create the center.
The center, referred to as a venture hub, was recommended by consultants and a committee of partnership board members and unanimously approved by the partnership’s board.
The hub and the grant are under the auspices of Growth and Opportunity Virginia, known as GO Virginia, a statewide effort to increase employment and improve local economies by strengthening businesses.
Although the center would help drive growth in the strong biotech industry of Charlottesville and Albemarle County, it’s also intended to support business ventures in a wide variety of business sectors, officials said.
Consultants said the hub would help businesses survive their first five years, expand and create jobs to stimulate local economies. The new hub would serve as a reference and support center to connect different local organizations that assist small businesses and entrepreneurs, officials said.
“The idea is not to supplant those resources but to really connect them so individuals and organizations can literally tap in,” said study committee member Sean Carr, executive director of the Batten Institute for Entrepreneurship and Innovation at the University of Virginia’s Darden School of Business.
“A lot of entrepreneurs don’t know what’s available and they don’t know how to access it so the notion of a gateway [hub] for those services is important,” said Catherine Renault, principal and owner of Innovation Policyworks, a consultant who worked on the idea with the committee. “There is an appeal to having a place where anyone can go to get advice and discuss experiences.”
The hub is estimated to cost about $750,000 a year including salaries for three employees, a director, a concierge to work with businesses and a marketing/events director.
Along with the grant, Charlottesville, Albemarle County, Louisa County and Prince William County have agreed to provide funds and UVa and Piedmont Virginia Community College pledged support.
Members of the CvilleBioHub and the Quantitative Foundation have also offered support.
Under the concept approved this week, there would be no charge for entrepreneurs or businesses using the hub’s services, except for facility rentals. That means the hub would need support from local organizations, businesses, philanthropists and governments to continue operations.
“We don’t envision that an entrepreneur would be charged for utilizing a venture hub. We see it more as a means of support,” said partnership member Ed Scott, a former member of the Virginia House of Delegates and director of operations for Locust Grove-based EcoSeptix Alliance.
“We don’t see it as being self-sustaining but it would need a mix of funding sources,” he said. “We really don’t expect it to make a profit or rely on only one funding source.”
“It’s providing a structure that does not currently exist,” Carr said. “The return on the investment [in the hub] would be indirect. It’s a long-term bet, not a short-term play.”
The center would differ from local organizations such as the CvilleBioHub and Small Business Development Center because it will not provide office space or similar services.
“This is an opportunity to have a place where everyone knows they can go to get advice, where folks can get together and talk about what they’re doing,” Renault said. “We don’t envision this as a working space. There are plenty of those in the area.”
The hub would act as a central clearing house for access to investors, employees and business expertise for the 10-county GO Virginia Region 9. The region extends from Nelson County on the south to Fauquier County on the north and includes Rappahannock and Culpeper counties.
The region also includes Fluvanna, Louisa, Albemarle, Green, Orange and Madison counties as well the city of Charlottesville.
The size of the region and the hub’s proposed Charlottesville location caused some concern for members of the partnership farther north of the city. Members from rural areas questioned whether a Charlottesville-centered venture hub would be responsive to their needs.
“We have as much in common with Arlington as we do Charlottesville,” said member Miles Friedman, economic development director for Fauquier County. “We have a different type of entrepreneur. We’re looking at agricultural and other types of small businesses in our area and we look at things very differently in the rural areas.”
Renault said the hub would be designed to be both a physical place and a virtual location to allow businesses farther from Charlottesville to access services. At some point, a second affiliated hub could be opened in the rural communities.
“The concept is easily scalable so you can easily imagine smaller hubs in other areas of the region connected to the main hub,” Renault said.