Start ‘em up
New Dartmouth innovation center and incubator seek to make N.H. a magnet for startups
Move over Silicon Valley. New Hampshire is set out to prove that it too is a startup hub, with the high-profile help of Dartmouth College.
The Granite State already has a promising startup scene, with key ingredients like strong universities, a tight-knit community, places to congregate and access to Wi-Fi (for most anyway.)
The state has five incubator hubs. There’s the Hannah Grimes Center in Keene, Enterprise Center at Plymouth, the recently merged Alpha Loft in Manchester and Portsmouth, the Tech Village in Conway, the Dartmouth Regional Technology Center, and now the newly created DEN Innovation Center and New Venture Incubator.
Except New Hampshire’s missing one critical component: a network of entrepreneurs.
While incubators provide cheap office space for a startup, they also serve as a gathering place for entrepreneurs to collaborate and share ideas.
Except Ray Pasquale, founder of Unified Office – a provider of hybrid private, cloud-managed communications and virtual office services for small- and medium-sized businesses – didn’t see it that way. He went to Alpha Loft in Portsmouth, which provided seminars, but lacked the community of seed investors and mentors who know the up-and-down experiences of running a business, says Pasquale.
Having solid mentors is key to attracting funding from venture capitalists, says one of Pasquale’s investors, Rick Burnes, partner emeritus and co-founder of Charles River Ventures in Cambridge, Mass. Beyond a good idea, Burnes says there needs to be founders that have proven they can adapt and pivot when things go wrong, an ability that is gained from working with a mentor.
Dartmouth College aims not only to fix that, but also boost New Hampshire’s visibility in the startup world.
The college raised $4.3 million ($1.8 million over its goal of $2.5 million) to build the new innovation center and incubator on campus. The DEN is a core component of its Office of Entrepreneurship and Technology Transfer, in which Dartmouth is one of the first institutions to combine its new venture efforts and its technology transfer operation under one roof.
Assisting with the effort is Jamie Coughlin, director of new venture incubator programs at Dartmouth and President of the NH Business Network. He was recently elected to the board of directors of the National Business Incubation Association, which has over 2,000 members worldwide. Coughlin’s the first from the Northeast to be elected and says it will give New Hampshire’s growing entrepreneurial ecosystem a seat at the international table.
Coughlin previously served as CEO of the abi Innovation Hub in Manchester, now called Alpha Loft. He’s personally aware of the difficulty of trying to build an entrepreneurial ecosystem at an incubator. When he left abi, the vision was to connect all of the incubators in the state, but he found many entrepreneurs stuck to their region. That’s not the case at Dartmouth.
Being an Ivy League institution certainly helps attract big names, but Dartmouth also already has its own ecosystem, the Dartmouth Entrepreneurial Network, with 50,000 individuals who are entrepreneurs or support entrepreneurship, located in 14 chapter cities like New York and the Bay Area.
The new effort will give students, undergrads, graduate students, faculty and the community “the ability to come to a place to be oriented and educated around entrepreneurship [with] workshops, a startup boot camp series we do every week [and] world class speakers. That’s where our entrepreneurial network really takes on form,” says Coughlin.
Students, faculty, entrepreneurs and members of the community gather at DEN's official launch on Oct. 1.
“People are associating entrepreneurial thinking with a real-world future skillset that is critical. Entrepreneurship isn’t just about building a for-profit venture, but rather the skill set of taking an idea and moving it into reality,” he says.
Dartmouth’s example is something that other colleges should imitate, says Jeffrey Sohl, director of University of New Hampshire’s Center for Venture Research.
“There’s a huge role for the universities if done correctly,” says Sohl. “They could provide an educated workforce, they have a lot of intellectual property; there needs to be the right incentives [to encourage professors to work with industry].”
Adds Burnes: “The education system in Massachusetts, the universities and the availability of high-tech employees is the reason why Google and the biotech firms are here.”
This innovation will likely encourage more startups and therefore more jobs.
Last year, angel investors – wealthy individuals who invest in startups for equity in the company or some other form of debt – invested $24.8 billion nationwide in seed, early-stage and high-growth startups, subsequently creating 290,020 jobs, according to the Center for Venture Research. That’s an increase of 8.3 percent over 2012.
But since acquiring seed capital is difficult, Sohl says the best schools cultivate relationships with their alum that are angel investors, as Dartmouth is doing.
With funds already raised, Dartmouth will deploy a variety of seed capital – $1,000 to $10,000 to build prototypes or perform initial market research, then upwards of $25,000 to $50,000 to accelerate venture development.
Dartmouth isn’t the only school taking these steps. Earlier in October, UNH announced it has established the Peter T. Paul Entrepreneurship Center as well as a mentoring network and seed fund. They will use the research output of faculty, staff and students to drive economic development in the state.
“It is the next step in our efforts to integrate entrepreneurship across all seven colleges and we’re grateful for Mr. Paul’s ongoing commitment to increasing entrepreneurial activity on campus,” says Provost Lisa MacFarlane in a statement. “The center will support all students who want to take what they’ve learned and turn it into tangible actions in the world. It is the ultimate student learning outcome.”
‘Connect the dots’
Encouraging startups to build or move to New Hampshire is one of Gov. Maggie Hassan’s goals.
This past summer, the governor, along with the Department of Resources and Economic Development and the state Business Finance Authority, announced a new advisory group called Live Free and Start. Mainly consisting of professionals in the technology industry as well as lawyers and a professor, the group is addressing issues stunting startup growth and finding ways to encourage more startups in the state.
The council has broken into subcommittees, focused on marketing, tax and securities regulations, modernizing the way the state does business, identifying other sources of capital for companies and working with the existing networks of investors to “connect the dots for entrepreneurs so they know the process and are prepared to access capital,” says Liz Gray, who leads the initiative on behalf of the BFA.
Gray says the council hopes to build a social media presence soon in order to find success stories to highlight on the upcoming website, which is expected to be up in late December.
“People do want this work/life balance,” says Coughlin, pointing to what makes Boulder, Colo., so appealing – access to world-class talent in a beautiful setting with a different pace. He suggests highlighting different regions in the state, as well as promoting it as a whole.
John Gargasz, co-founder of 10X Venture Partners, a Merrimack-based venture capitalist firm, thinks the state can cater to entrepreneurs who are starting to age out of the Boston area.
And Burnes says the green pastures of New Hampshire come into play when companies are looking to expand, especially software companies that need large spaces.
By promoting New Hampshire’s assets and utilization of its universities, the state provides a unique alternative to major cities.
“It’s the rugged individuals. It’s in the motto, 'live free or die.' That is entrepreneurial,” says Coughlin.