2 min read If you are a serial entrepreneur or are otherwise serious about startups, building a startup ecosystem may be an attractive option to you.
Startup ecosystems provide built-in connections and ongoing support, making the growth of a startup from the grassroots stage to a mature business far easier to manage. In this article, we discuss the best way to begin building your startup ecosystem.
What Is a Startup Ecosystem?
A startup ecosystem is a network of startups, investors, and others who come together to foster startup formation and growth. At the core of the network are startups led by founders who launch high-growth businesses. This network encourages innovation through shared resources such as capital, talent, and mentorship.
Each member in the network has something to offer:
- Accelerators and incubators: provide education around the initial launch
- Investors: provide potential capital
- Universities: provide talent for launching and supporting startups
- Freelancers: provide additional talent in the form of labor
- Providers: offer support for legal, financial, marketing, and other services
- Mentors: provide coaching and guidance on how to grow the business
How To Build a Startup Ecosystem
In building out your startup ecosystem, consider these points:
- First, investigate every kind of funding and consider where it may fit into your overall funding plan. It’s most likely that you will use two or three types of funding over the life of your business.
- To understand the type of funding you should look for, ask: “How will you pay the investor back?” For example, equity funding should be considered if you plan to pay back when you sell the business. On the other hand, if you plan to pay back out of the company’s cash flow, then debt funding is a better choice.
- If you have a consumer-facing product, consider crowdfunding which offers both debt and equity options.
- Break your funding down into parts, and consider using more than one type of funding for your business.
How to Prepare for a Raise
Before launching your fundraise campaign, prepare your business, complete your investor documents, and build your investor network.
- Start with a group of entrepreneurs interested in startups and meet regularly.
- Encourage startups to share their projects and invite others to support through coaching and making introductions.
- Set up a blog and publish a newsletter each week on startup activities in the area.
- Interview startups and investors.
- Build a resource list for all startups to use.
- Recruit lawyers, accountants, and other professionals to join the meetings and support early-stage companies.
- Set up events such as pitch sessions and happy hours to expand the network and recruit more people into the community.
- Put the group on website lists for startup communities to generate awareness.
- Set up a coworking space to give startups a place to work.
- Recruit startup programs to your area, such as the 3 Day Startup, to provide additional programming.
- Start small and grow your startup community through regular meetings and consistent newsletter mailings.
Remember that your role in building a startup community is to create connections and networks for players in the space. Therefore, facilitating communication and connection is key.
Feel free to try out our calculators and contact us if you would like to discuss your fundraise: https://www.startupfundingespresso.com/calculators/
Hall T. Martin is the founder and CEO of the TEN Capital Network. TEN Capital has been connecting startups with investors for over ten years. You can connect with Hall about fundraising, business growth, and emerging technologies via LinkedIn or email: email@example.com