Mon November 12, 2012
Charlotte Aims To Do Business With Local Startups
Charlotte has a reputation for fostering big business. Monday night the city council will vote on a plan to encourage the little guys - what it calls "High Growth Entrepreneurs."
Any small business with the potential to grow quickly fits the category – it could be a hot local restaurant starting to franchise, or a start-up with technology borne of a program at UNC Charlotte.
An established company looking to relocate or expand in Charlotte, can qualify for a tax and cash incentives by promising to create a few dozen jobs. But say you're a brand new business planning to create the same number of jobs and you knock on Brad Richardson's door? (He handles economic development for the city.)
"What we don't do is work in start-ups," says Richardson. There's no money or tax-rebate for them, and the city's not planning to change that.
But, the High Growth Entrepreneurship Strategy set to be approved by city council Monday does something local entrepreneur Dan Roselli says is even better – make it easier for start-ups to sell their services to city government.
"The best form for funding for startup is revenue," says Roselli. "It's not grants, it's not private equity - it's sales. It's revenue."
Charlotte's existing small business strategy has only given established small businesses the chance to bid for construction and subcontracting work. Untested startups can't qualify, says the city's Brad Richardson.
This new strategy will match local startups with city departments that have specific needs. For example, the Charlotte Mecklenburg Utilities Department recently tapped a startup called InfoSense that invented a way to find blockages in sewer lines using sound waves. Roselli says the deal made Infosense a success.
"Now it's going national and international, but it's because it solved a problem for the city and the city was its first client, which is sometimes the hardest thing to get," says Roselli.
The strategy also calls for a $500,000 matching grant from the city to create a foundation that will host events, convene task forces and generally encourage entrepreneurship.
Local investor Paul Solitario is helping start the foundation. He says the money is less important than the message it sends.
"It really provides an awareness to the whole community that says, 'You know what? The city does care. The Mayor does care,'" says Solitario. And then "wealthy individuals, wealthy doctors, wealthy investment bankers start investing in these early stage companies."
Simple as it may seem, Solitario and Roselli insist the thing entrepreneurs need most in Charlotte is to feel welcome and wanted, and they say the city's High Growth Entrepreneurship Strategy is a first step.