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Working w/ Growth Companies (GC’s) Economic Development Finance Services August 24, 2011 Presented by Ed Morlan, Executive Director of Region 9 Economic.

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Presentation on theme: "Working w/ Growth Companies (GC’s) Economic Development Finance Services August 24, 2011 Presented by Ed Morlan, Executive Director of Region 9 Economic."— Presentation transcript:

1 Working w/ Growth Companies (GC’s) Economic Development Finance Services August 24, 2011 Presented by Ed Morlan, Executive Director of Region 9 Economic Development District of Southwest Colorado, Inc.

2 Why is it important to help Growth Companies? “entrepreneurship (is) the source and strategy for economic growth, community development and economically independent individuals.” Edward Lowe Foundation “Economic growth requires continued entrepreneurial innovation and expansion.” Ewing Marion Kauffman Foundation

3 Why is it important to help Growth Companies? Provide higher Provide higher than average wage jobs Diversify the region’s economy Diversify the region’s economy Bring income into the region Bring income into the region Creators of innovation Creators of innovation

4 I llustration of Income Importing Activity

5 Growth company focus has advantages over other direct based revenue sources Growth company focus has advantages over other direct based revenue sources Oil and Gas Oil and Gas Tourism Tourism 2 nd Homes 2 nd Homes Retirees Retirees

6 Stages of Growth Self Employed (1 employee) — This includes small-scale business activity that can be conducted in homes (cottage establishments) as well as sole proprietorships. Stage 1 (2-9 employees) — This includes partnerships, lifestyle businesses and startups. This stage is focused on defining a market, developing a product or service, obtaining capital and finding customers. Stage 2 (10-99 employees) — At this phase, a company typically has a proven product, and survival is no longer a daily concern. Companies begin to develop infrastructure and standardize operational systems. Leaders delegate more and wear fewer hats. Stage 3 ( employees) — Expansion is a hallmark at this stage as a company broadens its geographic reach, adds new products and pursues new markets. Stage 3 companies introduce formal processes and procedures, and the founder is less involved in daily operations and more concerned with managing culture and change. Stage 4 (500 or more employees) — At this level of maturity, an organization dominates its industry and is focused on maintaining and defending its market position. Key objectives are controlling expenses, productivity, global penetration and managing market niches.

7 Second Stage GC’s In 2008 Second Stage GC’s represented the largest percentage (34.9%) of the jobs in the United States yet accounted for only 7.7% of the establishments in the nation Edward Lowe Foundation – YourEconomy.org

8 Companies to Watch Celebrating Second-Stage Companies What is it? What is it? An awards competition second-stage companies, created by the Edward Lowe Foundation in partnership with respected local entrepreneurship support organizations. Designed to discover, celebrate and spread the news about second-stage companies in a given state Offered in six states in 2011: Colorado, Michigan, Indiana, Wisconsin, North Carolina, Florida. Coming to Washington state and Northern California in 2012.

9 Why Companies to Watch Works Companies to Watch is a source of good news Brings attention to companies that typically fly under the radar Paints a realistic picture of a state’s economic landscape Broad geographic representation from beyond the MSAs into rural communities throughout a state Industry diversity to reflect a healthy mix of sectors Holistic look at companies to promote strong corporate culture, philanthropy and community giving, enlightened business practices These are companies with the intent and capacity to grow. They form the basis for a state’s economic potential Fosters a vibrant entrepreneurial community through its public-private partnership model, giving disparate entities a reason to work together Commercial service providers Economic developers at all levels of government Industry associations The media

10 Investment Potential “The Companies to Watch program is a great filter for us. We typically invest in companies located in the Great Lakes region that have $1 million to $10 million in annual revenue with scalable products and intellectual property that can be protected. Nearly half of the Companies to Watch honorees meet that initial criteria for investment, which means they’re an excellent target of deal flow.” Jeff Barry, partner of Plymouth Management Co. in Ann Arbor, Mich., manager of the Plymouth Venture Partners and Plymouth Venture Partners II funds.

11 Total Revenue in 2010$338 Million Increase over % Full-time equivalent in 20101,543 Jobs Created over yr Revenue Total (’07-’11)$1.4 Billion 5yr FTE Total (’07-’11)1,304 5yr Rev. Growth (’07-’11)190% 5yr FTE Growth (’07-’11)188% Economic Impact of the 2011 Class of 50 Colorado Companies to Watch

12 Southwest Colorado Growth Company Initiative (GCI) Supporting the Entrepreneurial Environment of Southwest Colorado

13 Attributes necessary to build entrepreneurial sector High quality of life High quality of life Educated workforce Educated workforce Outstanding university or college Outstanding university or college Supportive regulatory and economic development policies Supportive regulatory and economic development policies Collaborative Partnerships Collaborative Partnerships Creative Class Creative Class Innovation Innovation

14 Growth Company Initiative Partners Region 9 EDD Region 9 EDD Fort Lewis College School of Business Administration (SOBA) Fort Lewis College School of Business Administration (SOBA) Small Business Development Center Small Business Development Center County Economic Development Organizations County Economic Development Organizations GC’s GC’s

15 GCI’s definition of Growth Company: Growing 15% per year Growing 15% per year Innovative product or service Innovative product or service Intellectual PropertyIntellectual Property Sustainable competitive advantage Sustainable competitive advantage Competes outside SW Colorado, usually nationally/globally Competes outside SW Colorado, usually nationally/globally Significant number of above average wage jobs Significant number of above average wage jobs

16 GCI’s Job Impact in S.W. CO In 2011 the 24 GC’s have a total employment of FTE’s of which 56% of them are paid above the respective counties average wage.

17 Five Major Components 1. Identify Growth Companies 1. Survey – 2. CEO Peer Networking 3. Business Advisors Network (SBDC) 1. Economic Gardening Services 4. Facilitate Access to Equity Capital 5. Develop Ongoing Systems to Monitor Progress and Business Needs

18 Evolution, Success, & Challenges 1. Identifying Emerging GC’s Originally potential prospects “Qualified” 25 firms using short survey County ED Directors have/had primary responsibility Lack of stability with Rural ED organizations and turn over in staff Continually trying to identify GC’s Added 5 GC’s

19 Evolution, Success, & Challenges 2. CEO Network Originally had monthly meetings that were hosted by SOBA CEO’s meet to: CEO’s meet to: Share challenges, successes, resourcesShare challenges, successes, resources Provide mutual supportProvide mutual support Have guest/CEO presentations on topics of interestHave guest/CEO presentations on topics of interest Currently driven by it’s three CEO member’s Executive Committee Community Awareness/Involvement Outreaching emerging GC’s Challenges in continuing to have relevant topics monthly and participation due to CEO’s busy schedules of running their companies Working on new direction of the CEO Network

20 Evolution, Success, & Challenges 3. Business Advisors Network (BAN) SBDC is responsible for the BAN services Originally started with 3 advisors and has grow to 30 advisors Mix of retired and active executives with various/extensive backgrounds in business. Provides services to broad range of companies, not just GC’s One on one counseling or monthly panel Working to develop a BAN in each county of S.W. Colorado Finding new ways to tap into the human capital

21 Evolution, Success, & Challenges 4. Facilitate Access to Equity Capital Formed the Animas Venture Group Looked at several deals but have yet to fund one Did commit to one deal Region 9 EDD Has made equity investments and is open to future opportunities Working with other potential sources of venture capital Companies that have a need for “pre” venture funding

22 Evolution, Success, & Challenges 5. Develop Ongoing Monitoring Systems Quarterly meeting of the GCI partners Schedules and changes in partners Challenges in tracking the impact and measuring the success of the GCI GCI recognized “player” in the community 2009 Impact study

23 GCI long-term goals Work towards developing Work towards developing Continue to grow and expand the GCIContinue to grow and expand the GCI S.W. CO reputation as strong entrepreneurial (friendly) locationS.W. CO reputation as strong entrepreneurial (friendly) location Entrepreneurship Center at FLCEntrepreneurship Center at FLC Extended entrepreneurial education programsExtended entrepreneurial education programs Business incubatorBusiness incubator One stop shopOne stop shop

24 Questions? Ed Morlan, Executive Director of Region 9 Economic Development District of Southwest Colorado, Inc. Website – – Telephone –


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