1. Page 1 Abstract. Our field research is increasingly clear – communities in Rural America with energized entrepreneurs typically have successful entrepreneurial support organizations (ESOs) hard at work building strong “E” environments. This monograph provides an overview of ESOs. Over time, we hope to add short case studies on specific rural ESOs. The Entrepreneurial Support Organizations Monograph is part of a three monograph series that also includes Public Entrepreneurship and Social Capital. Background & Introduction Too little has been researched and written about the origins of strong entrepreneurial environments. The United States, with its passion for free enterprise, has long been a poster child for a strong entrepreneurial environment. The Global Entrepreneurship Monitor Project studied 21 countries and explored questions about entrepreneurship, business creation and the entrepreneurial environment [Global Entrepreneurship Monitor Report for 2000.] This study found one in 10 adult Americans engage in entrepreneurial endeavors. The U.S. ranked the strongest for entrepreneurism behind only Brazil (among the study group). The question remains, why is America entrepreneurial? More importantly, why do certain communities in America exhibit high rates of entrepreneurship, while other communities do not? A central research question we have been exploring relates to the role of entrepreneurial support organizations or ESOs in creating environments that stimulate and support higher rates of successful entrepreneurship. We theorize that communities with successful ESOs contribute to stronger entrepreneurial environments and higher rates of successful entrepreneurship. Based on our field research, we have found that a key to success for ESOs is the remarkable public entrepreneurs providing critical leadership within these ESOs. Our emerging conclusion is that public entrepreneurs working with ESOs are creating stronger entrepreneurial environments and higher rates of successful entrepreneurial activity. This emerging conclusion strongly suggests a key focus for economic development should be supporting the development of ESOs across the rural landscape. Entrepreneurial Support Organizations March, 2002 ESOs? There is no widely recognized definition for ESOs. While the literature and field practice is full of stories about ESOs, their unique and powerful role in building strong entrepreneurial environments (that in turn stimulate higher rates of entrepreneurship) is not well acknowledged or documented. We are evolving an operational definition for ESOs based on their attributes as players in the community landscape. Here are the attributes we have identified and documented thus far: They focus on entrepreneurs first and the associated businesses second. They build entrepreneurial support systems – systems that nurture entrepreneurs as they develop business ideas, create viable enterprises and grow sustainable businesses within the local economy. They help build over time entrepreneurial environments – environments where entrepreneurship flourishes with the support of both the public and private sectors. They tend to be strategic, comprehensive and customized in meeting the needs of entrepreneurs within their service areas. ESOs come in many forms. Often they are organized as networks, intermediary organizations or sectoral clusters. As organizations, they are generally non- profits with strong public missions. However, sometimes they are rooted in local government, associated with educational institutions or quasi- public organizations (hybrid government/non-profit). Missions are often rooted in addressing poverty, social justice, economic development, community improvement and sustainable development. Monograph 11 Figure 1 - Attributes of ESOs Focus on Es Build Entrepreneurial Environments Strategically Focused Help Es Meet Their Needs Comprehensive in Their Approach Provide Customized Assistance Build E Support Systems ?? Deborah Markley  Co-Directors  Don Macke

2. Page 2 Entrepreneurial Support Organizations (For more information on rural capital access we recommend RUPRI’s Rural Equity Capital Initiative reports Studies at: http://www.rupri.org/pubs/archive/reports/P2001- 11/index.html.) Market Access. One critical difference between a business person and an entrepreneur is the entrepreneur’s orientation toward markets. Entrepreneurs become very good at perceiving market opportunities, evaluating opportunity feasibility and acting to capture market share. ESOs generally engage in helping entrepreneurs gain awareness of and experience with a wider range of market environments. For example, a core service provided by GROW Nebraska (an artisans’ marketing association) is helping artisans get ready to compete in regional and national trade shows whether in Dallas or New York. GROW helps promising artisans move from localized markets to regional and national markets. Technical Assistance. Another role that ESOs play is providing access to technical assistance. The form of this technical assistance includes traditional business counseling, mentoring access, networking opportunities, capacity building experiences and entrepreneurial training (as offered by REAL, FastTrac, NextLevel and others). High performing ESOs tend to reach beyond business skill building to support personal and soft skill building activities as well. For example, these ESOs may offer counseling that helps entrepreneurs maintain a reasonable balance between family and their drive to create their venture. Enterprise Facilitation. Finally, most ESOs engage in some form of enterprise facilitation. The concept of enterprise facilitation was developed by Ernesto Sirolli over the past 20 years. But we have found that many ESOs practice enterprise facilitation in varying degrees independent of the Sirolli program. Enterprise facilitation is a highly sophisticated and customized approach to helping entrepreneurs pursue their passion in creating ventures. Enterprise facilitation goes beyond point in time training and skill building programs to a longer-term partnership with entrepreneurs and their enterprises. (For more information on enterprise facilitation contact the Sirolli Institute at www.sirolli.com.) ESO Practice Research on entrepreneurs strongly suggests the keys to ultimate success are motivation (the drive to create enterprises) and capacity (the ability to actually create and grow a venture). The ESOs we have studied appear to be particularly good at addressing both of these elements when working with entrepreneurs and their ventures. The kinds of activities that ESO’s across Rural America engage in vary widely from one ESO to the next. But the following activities seem to form the practice of high performing ESOs. Entrepreneurial Environment. Although the general business climate in many rural places may be weak and community attitudes toward entrepreneurship even hostile, successful ESOs work to build supportive entrepreneurial environments. These ESOs focus on identifying, engaging and supporting local entrepreneurs who in turn work to create successful enterprises. Over time these ESOs help enhance the larger community business climate and build community support for entrepreneurs. (For more information, refer to our monograph titled Community Environment for Entrepreneurship.) Networking Infrastructure. Networking and mentoring are often cited by entrepreneurs as the most important support an entrepreneur can receive. ESOs, most often organically and sometimes strategically, build and support networking infrastructure. Often these ESOs proactively recruit entrepreneurs into these networks and facilitate their operation. Through these networks, entrepreneurs gain access to knowledge and role models that are critical to their future success. (For more on the importance and nature of business networks we recommend Building Entrepreneurial Networks (December 2001) by the National Commission on Entrepreneurship. This report and other entrepreneurship reports can be obtained at www.ncoe.org.) Capital Access. Another attribute of high performing ESOs is their role in helping entrepreneurs access capital necessary to start and grow enterprises. Organizations like Coastal Enterprises Incorporated (CEI) in New England illustrate this capital accessing role. CEI runs programs from entry level micro lending to highly sophisticated equity and venture financing. Not only does CEI operate many of these financing programs internally, CEI is also linked with private banking and equity providers enhancing entrepreneurs’ access to adequate and appropriate financing.

3. Page 3 Greg Clary of Texas. Greg Clary is an extension educator with Texas A&M University. He is part of a large and structured institution. But to many, Greg is “Mr. Rural Entrepreneurship” in Texas. He is passionate and motivated about his work. He is driven to build an entrepreneurial economy and environment across Texas. Greg’s strategy is coalition building through which the leadership, resources and capacity to make a difference can be realized. Sharon Gulick of Missouri. Sharon Gulick is part of State Government in Missouri. She runs the Small Business Program within Missouri’s development agency. She is bright, motivated and innovative. She understands bureaucracy and has learned to effectively work within its constraints. Sharon and her partners are driven to create a highly effective entrepreneurial support environment in Missouri. Marcie McLaughlin of Minnesota. In one part of Marcie’s life, she teams with her husband to grow a small entrepreneurial business in Rural Minnesota. The rest of her time, Marcie is head of Minnesota Rural Partners, the state rural development council in Minnesota. Marcie is a remarkable public entrepreneur. She understands networking, collaboration and leverage. She is at the heart of numerous rural initiatives in Minnesota including efforts to build a virtual entrepreneurial network within the state. Conclusion A great deal of research and learning is still required before we can fully understand and appreciate the role of entrepreneurial support organizations. Measuring the impacts of these ESOs, both quantitatively and qualitatively, is the next step toward a better understanding of their role in entrepreneurship development. Emerging evidence from our field experience strongly suggests that ESOs are critically important to stimulating entrepreneurship, building supportive entrepreneurial environments and helping entrepreneurs succeed in rural areas. If you have information or ideas about ESOs in your corner of America, please get in touch and share your story (contact Don Macke at don@ruraleship.org). Entrepreneurial Support Organizations Entrepreneurs within ESOs Case study research on private entrepreneurs by the Kauffman Center for Entrepreneurial Leadership [Daring Visionaries How Entrepreneurs Build Companies, Inspire Allegiance, and Create Wealth] strongly supports the view that at the heart of entrepreneurial businesses, there are successful entrepreneurs. We believe the same is true with ESOs. At the core of successful ESOs, there are public entrepreneurs. This view is strongly supported by recent research on non-profits [Enterprising Non- Profits A Toolkit for Social Entrepreneurs.] These individuals have many of the same drives and attributes as private entrepreneurs with one very important difference. They, like private entrepreneurs, are driven to create, but their creation has a public mission. The following are some public entrepreneurs laboring to encourage entrepreneurship in Rural America. Janell Anderson Ehrke of Nebraska. Janell has all of the drive and savvy of a successful business woman, but her passion is not building her own business or family riches. She is driven to help Nebraska’s artisans realize their dreams through successful ventures. Janell is not an artist or particularly motivated by art. She is a builder and has built GROW Nebraska into a very effective ESO for Nebraska’s artisan community Ron Phillips of Maine. Over 25 years ago, Coastal Enterprises Inc. did not exist. Today CEI is one of America’s most successful non-profit regional development organizations. With total capitalization of over $120 million and a large and growing staff, CEI is having impact and impact at scale. Ron Phillips is central to the creation of CEI. His vision and passion are reflected in the values and mission of CEI. These same entrepreneurial qualities are reflected in CEI’s leadership and staff. Mike Wisdom of Colorado. Mike Wisdom has labored in rural development for most of his life. His vision and talent can be found in earlier work on the high plains of Eastern Colorado. Today Mike heads a regional development organization in the San Juan Mountain region of Southern Colorado. Driven by values of social justice and the power of human creation, Mike stimulates a development agenda among the people in the landscapes where he works. Pam Curry of West Virginia. Pam Curry works with a non-profit organization called Options in Appalachian West Virginia. Options operates a retail store in Charleston providing an outlet for artisan works from across the region. Pam lives the values of personal economic empowerment. She has learned the art of business and proven highly creative in building partnerships, raising capital, and helping individuals turn their talent into profit.

4. Page 4 About the Center  Ripples from the Zambezi – Passion, Entrepreneurship and the Rebirth of Local Economies by Ernesto Sirolli with the Sirolli Institute. New Society Publishers at www.newsociety.com. ISBN: #0-86571-397-9. 1999.  Clues to Rural Community Survival by Vicki Luther and Milan Wall with the Heartland Center for Leadership Development. ISBN #0-9666699-08. 1987 & 1998.  Enterprising Non-Profits A Toolkit for Social Entrepreneurs by Gregory Dees, Jed Emerson and Peter Economy. John Wiley and Sons, Inc. ISBN #0-471- 39735-0. 2001.  Global Entrepreneurship Monitor Report for 2000 by Babson College, Ernest & Young, the Kauffman Center for Entrepreneurial Leadership and the London Business School. Available through www.entreworld.org. 2001.  Daring Visionaries How Entrepreneurs Build Companies, Inspire Allegiance, and Create Wealth by Ray Smilor and the Kauffman Center for Entrepreneurial Leadership. Adams Media Corporation. ISBN #1-58062- 476-6. 2001.  Building Entrepreneurial Networks by the National Commission on Entrepreneurship at www.ncoe.org. 2001.  The Center for Rural Entrepreneurship is identifying, tracking and developing case studies on a number of rural based ESOs. For more information on this work check out the Center’s web site at www.ruraleship.org  New Postings/ESO Case Studies. Founding PartnersResources #1About the Center & Resource Guide #2Entrepreneurs & Entrepreneurship #3Why Entrepreneurship? #4Wealth as the Development Goal #5Understanding Rural America #6Community Environment for Entrepreneurs #7State Environment for Entrepreneurs #8National Environment for Entrepreneurs #9Capital #10Public Entrepreneurship #11Entrepreneurial Support Organizations #12Social Capital #13Youth Entrepreneurs* #14Research & Learning Focus *Under Development Other Monographs in this Series The Center for Rural Entrepreneurship is new. It is an outgrowth of the Rural Entrepreneurship Initiative. The Center is a RUPRI National Research and Policy Center with founding support from the Kauffman Center for Entrepreneurial Leadership within the Ewing Marion Kauffman Foundation of Kansas City, Missouri. Our mission is to enable every rural resident to achieve his or her full entrepreneurial potential. This mission will be achieved by collaborating with individuals and organizations engaged in the study, practice and policy of rural entrepreneurship. The Center supports research, field work, and policy development through collaborations with national, state, and local interests. For more information on the Center for Rural Entrepreneurship, check out our web site at www.ruraleship.org or call Taina Radenslaben at 402-323-7336. The Kauffman Center for Entrepreneurial Leadership was created in 1990 within the Ewing Marion Kauffman Foundation of Kansas City. The Foundation is a private foundation created by Ewing Marion Kauffman (founder of Marion Laboratories) that strives to achieve the vision of self-sufficient people in healthy communities. The Center focuses on entrepreneurs and entrepreneurship, supporting research, learning, and education activities. Additional information on the Kauffman Foundation can be found at www.emkf.org. The Rural Policy Research Institute (RUPRI) is the only national policy institute in the U.S. focusing solely upon the rural implications of public policy. This comprehensive approach to rural policy analysis involves scientists from universities, research institutions, governments, and non-governmental organizations. To date, more than 200 scientists representing 16 different disciplines in 80 universities, 40 states, and three countries have participated in RUPRI projects. Additional information on RUPRI can be found at www.rupri.org. Author. This monograph was prepared by Don Macke. Don can be reached at don@ruraleship.org or 402-323-7339.