Examining the Entrepreneurial Landscape in Indianapolis
While Silicon Valley gets the lions' share of the media attention when it comes to breeding grounds for promising startups, more data is coming to light on promising trends in new firm formation and growth from other parts of the U.S. One of those places is Indianapolis and a new paper from the Kauffman Foundation explores the the city's entrepreneurial landscape -- and some of the challenges it faces.
Findings from The Regional Environment in Indianapolis: Insights from High-Growth Companies are mixed. Most interviewees reported a generally positive overall environment, but not overwhelmingly so, and several interviewees indicated no effect or a negative impact of the overall ecosystem. Further, it seems the region's high-growth entrepreneurs were already located in the area and didn't seek out Indianapolis in particular to start and grow their businesses.
While that may be seen as a negative by the traditional economic development community trying to lure large companies to the area -- it does speak well to the conditions for local startups to launch and scale.
According to the study's co-author, Yasuyuki Motoyama, other key findings include:
- High-growth companies in Indianapolis were able to survive and grow largely without external angel or venture capital investment, two financial forms conventionally associated as the sources of growth. Most of the companies were initially financed by the founder/s, with personal funds being the most common mechanism. In addition, several entrepreneurs used bootstrapping of some kind.
- High-growth firms in Indianapolis face challenges in recruiting and retaining the right talent. This is particularly the case for entry-level, recent college graduates and for technology-specific skilled talent.
- There appears to be a “boomerang effect” which draws many former residents back to the region after they have lived elsewhere, often for personal reasons such as raising children or being close to family.
- High-growth firms in Indianapolis do not generally have strong direct business ties with other companies in the region, including with vendors and customers, nor do they have significant direct competition in the region.
The report is part of a larger research series from the Kauffman Foundation on city, metro, and regional entrepreneurship.
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