Nurturing startups key to growth, panelists say
By Chuck Crumbo
ccrumbo@scbiznews.com
Published Sept. 4, 2014
While landing large manufacturing operations that bring thousands of jobs to South Carolina grabs the headlines, being able to nurture and support fledgling startup companies can be the ticket to sustained economic growth.
However, to help the newcomers, state and local business, and education and government leaders need to find ways to recruit talented entrepreneurs, train a tech-savvy workforce and garner the capital needed to expand.
That’s the collective opinion of panelists who participated in this morning’s Power Breakfast hosted by the Columbia Regional Business Report at the Double Tree by Hilton Hotel.
Among small businesses, which create the vast majority of jobs in South Carolina, are enterprises called “high-impact firms,” said Doug Woodward, director of the Division of Research and an economics professor at the Darla Moore School of Business at the University of South Carolina.
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| USC professor Doug Woodward, from left, IT-oLogy President Lonnie Emard, Capital Angels partner Matt Dunbar and TCube Solutions CEO Sam McGuckin were the panelists for today’s Power Breakfast. (Photo by Chuck Crumbo) |
High-impact firms are defined as those that double sales in four years and have important employment growth, Woodward said. In the Midlands, high-impact firms can be found in IT and technology businesses, plus insurance, military contracting, health care and even beer wholesalers.
“In South Carolina, about 3% of high-impact firms create two-thirds of net job creation,” Woodward said. “We need to understand more about the characteristics of those high-impact firms and how we can help to make them more successful and retain them as locally headquartered firms in the Midlands.”
Training the future workforce should focus on creating an environment where people can work together and learn from each other, said Lonnie Emard, executive director of IT-oLogy, a national nonprofit collaboration of businesses, academic institutions and other organizations that works to foster the information technology talent pipeline and profession.
“Working environments that really breed the notion that we can learn from one another everyday, that ideas can happen whether it’s emanated from a big company or it emanated from a student it really doesn’t matter,” Emard said. “What we have to be able to do is nurture that along.”
IT is key to the future of these companies, Emard added. IT is not just the work of network administrators, it involves 21 occupations.
“It’s everything we’re doing today, and the IT profession is at the core of enabling breakthroughs and, in some cases, survival,” Emard said.
One need of a fledgling startup is the development of a support infrastructure offered by business incubators, said Sam McGuckin, president and CEO of TCube Solutions, an information technology services firm headquartered in Columbia.
TCube is a resident company at the USC, Columbia Technology Incubator, and has about 100 employees.
Prior to founding TCube, McGuckin was the COO of Duck Creek Technologies and worked for Policy Management System Corp.
In January 2013, when he started up TCube, McGuckin said he suddenly found himself serving as the chief marketing officer, chief sales officer, human resources director and “the guy who took the trash out at the end of the day.”
Being able to move into the incubator program, where he has been able to find the people to handle other tasks such as hiring and setting up the accounting process, has enabled him to focus on selling, McGuckin said.
The lifeblood of startups is access to capital, and in South Carolina it can be difficult to find investors willing to put their money into high-risk enterprises.
In South Carolina, most startups are either funded out of the founder’s bank account or loans from friends and family, said Matt Dunbar, managing director of the Upstate Carolina Angel Network in Greenville.
Venture capitalist firms, which raise money from large institutional investors, don’t operate in the state because there are too few deals, Dunbar said.
“We want to create an impact so that those talented entrepreneurs with the right skillsets can find access to grow companies, grow our economy and create jobs of the future,” Dunbar said.
Currently, Dunbar’s organization is involved in setting up a network of angel investors around the state.
“The idea is to create a marketplace,” Dunbar said. “In South Carolina we simply don’t have the density to have well developed, robust, stand-alone markets in each of our metro areas. We need to work together across the state.”