State cash pumps new life into regional startups

State cash pumps new life into regional startups

January 12th, 2012 by Ellis Smith in Business Around the Region

An infusion of cash is pushing regional officials to spur business growth, as the Chattanooga-based Company Lab takes the first steps toward a new role as "regional accelerator" for small businesses.

"This is just the beginning," said Charlie Brock, a successful entrepreneur-turned mentor who spends three days a week at The CoLab, as it's known internally.

The group on Wednesday hosted the first meeting of county and business executives to showcase the organization's plan for finding, mentoring and funding entrepreneurs in the 10-county area.

More than $500,000 in state and private money will go toward launching programs to train entrepreneurs and link them with investors. The ultimate goal is to retain innovative businesses in East Tennessee rather than lose them to other states, said Sheldon Grizzle, self-styled "air traffic controller" at the CoLab.

"We're working across the gamut," Grizzle said. "From artists to creatives to manufacturing to 'I want to start the next Facebook.'"

In Chattanooga alone, Grizzle says the CoLab has graduated more than 400 entrepreneurs from its training program and launched more than 120 businesses over three years. In addition, the group has linked startups with millions in investment capital.

That type of program could be a major boost to counties like Sequatchie, which has seen an 18 percent rise in population, even as infrastructure, education and access to investment has stagnated, said Winston Pickett, executive director of the Sequatchie County-Dunlap Chamber of Commerce.

"We've got a good geographic location and roadways, though we've got some challenges," he said.

In spite of the obstacles Sequatchie faces, Pickett is optimistic that with the right encouragement, the area could flourish.

"The cost to start a new business here is a lot lower, too," he said.

Chris Daly, director of technology development and transfer for The Enterprise Center in Chattanooga, said that the outlying counties are ripe for startup growth -- though rural startups may look different than those launched in Chattanooga.

"Agricultural innovation is a big deal," Daly said. "There's a gigantic market for a lot of these ideas."

But driving those ideas from concept to company can be difficult if there's not an ecosystem in place, said Nathan Derrick, a Decatur, Tenn., entrepreneur.

"I love East Tennessee, but I also love technology," said the former contractor. "I went to a lot of local organizations but they didn't understand the language that I was using."

His idea was to create a central clearinghouse called SupplyHog that allowed construction companies to order materials and bid online for supplies.

However, he couldn't get traction for his idea, and was just weeks away from moving out of state when he heard about the CoLab and found a receptive ear.

"I know there are lots of other people like me in McMinn County, Meigs County and Polk County who would like to stay home and do things in their communities," Derrick said. "I wouldn't be where I am without them."