Start it up: What’s the climate for entrepreneurs in Charlottesville, and how could it improve?

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Charlottesville Angel Network founder Tracey Greene says Charlottesville's entrepreneurs thrive thanks to its mature angel network, rather than the kind of corporate support on which larger cities rely. Photo: Eze Amos Charlottesville Angel Network founder Tracey Greene says Charlottesville’s entrepreneurs thrive thanks to its mature angel network, rather than the kind of corporate support on which larger cities rely. Photo: Eze Amos

Mike Appleby figured he’d keep his big city job when he moved to Charlottesville.

Appleby’s Boston-based employer kept him on to run a development team when he moved to C’ville to get married. But Appleby quickly came to love the area—“it’s the nicest place I’ve seen anywhere,” he says—and five years later he hatched a plan with an associate to launch a local company.

Appleby started his manufacturing business, Mikro Systems, in January 2001 with just three employees. Today, the firm has 130 in-house employees, and another 70 build Mikro’s high-tech investment casting cores at a nearby Siemens plant.

Appleby came to Albemarle County because it’s a place where he wanted to live. He stayed in no small part because he believes it’s a good place to do business.

“We loved it here—we loved the community and we wanted to be a part of the community,” Appleby says. “This isn’t the manufacturing mecca of America, but it’s still a great area to build a company.”

Travis Wilburn, who co-owns hospitality group Stay Charlottesville, says he fell into entrepreneurship accidentally. He started renting homes to C’ville visitors in 2007, after creating a guest house behind his own home. “We have become a hospitality group as Charlottesville has evolved,” he says. Photo: Cramer Photo

By the numbers

As business owner drawn to Charlottesville for personal reasons, Appleby’s not alone. From biotech mavens to tech geeks to restaurateurs, entrepreneurs have taken to the area like businessmen to suits. Almost to a person, they say it’s the quality of life more than the commercial climate that initially made them open up shop.

“I didn’t move here to start companies,” says Michael Prichard, who founded WillowTree in 2008 and has since moved on to start a new firm, Metis Machine. “I was like a lot of people I know who have come here for another reason.”

Travis Wilburn, co-owner of Stay Charlottesville, says when he started renting homes to C’ville visitors in 2007, he didn’t know what to expect of the local business climate.

“I’ve been here since 2000, and I accidentally fell into my own business,” Wilburn says. “We built a guest house out back, and we have become a hospitality group as Charlottesville has evolved.”


Helping hands

By partnering with business owners, SCORE gets results

By Joanna Breault
Laura Van Camp’s mind was buzzing with a hundred details and no small amount of entrepreneurial zeal when Steve Cooper asked her one simple question: “How many pairs of jeans do you need to sell each day to succeed?”
The question brought her down to earth; it was both grounding and practical, just like Steve.
Jean Theory owner Laura Van Camp says the SCORE mentorship program, which paired her with retired businessman Steve Cooper, helped establish a solid foundation for her now decade-old business. Photo: John Robinson
“I walked into that meeting with Steve—like I know other entrepreneurs walk into a mentorship relationship—and you just want people to be automatically on board, to be in the moment with you,” Van Camp says. “But you really need to take it to the very beginning. That’s what Steve did with me. He helped ground me and make sure I built a foundation first.”
Van Camp owns Jean Theory, a downtown boutique carrying designer denim and staffed by employees obsessed with matching customers to perfectly fitting jeans. Before she opened the doors nine years ago, she began meeting with Cooper, a retired employee of Hughes Aircraft Company who had been highly successful in business. Cooper helped Van Camp project revenues and expenses for her first year, do research on Charlottesville demographics, put together a profit and loss statement, and prepare for small business loan meetings with banks.
It sounds like a mentorship match made in heaven, but it was actually a match made by the Central Virginia chapter of SCORE, a nationwide organization of mentors devoted to supporting small business owners. Any aspiring entrepreneur in the organization’s footprint, at any point in launching a business, can apply for mentorship through SCORE. Each applicant is matched with a mentor who will take them through a structured yet personalized process of planning and starting their business. The mentor and client decide upon the duration and frequency of meetings and all mentoring services are completely free.
After almost a decade, Van Camp and Cooper still meet regularly.
“Sometimes there is something we are working on and other times he just checks in with me,” Van Camp says. “It’s nice because small business ownership can be really lonely. There’s nobody giving me raises or patting me on the back. There are no incentive trips. So it’s nice to have that person who is saying, ‘You are doing a great job, I’m proud of you, let’s have lunch.’ I got really lucky.”
This kind of encouragement and help is the heartbeat of SCORE, which has 300 chapters nationwide. Since the 1980s, the central Virginia chapter of SCORE has been headquartered in Charlottesville’s Chamber of Commerce building, serving Charlottesville and eight counties beyond. The chapter currently boasts 18 volunteers; they are mostly retired businesspeople now seeking to make a difference through mentorship. In the past year, SCORE of Central Virginia has taken on 271 new cases.
“We are there for the whole story,” says local SCORE chairman Bob Lenahan. “We are there at the very beginning, and we are there when they open their business. If they have cash flow problems, if they have employee problems, we are still with them; we are still available to help.”
In addition to ongoing mentorship, SCORE offers workshops on such topics as social media marketing, how new tax laws affect businesses, and how to deal with sexual harassment and discrimination issues in the workplace. For more information, check out centralvirginia.score.org.—Joanna Breault

But while they may have arrived for other reasons, many have found Charlottesville to be a great place to start a business. According to the Charlottesville Regional Chamber of Commerce, between 2007 and 2010, private enterprise jobs grew more than twice as fast locally (9.23 percent) than in the rest of the state (4.61 percent). Greater Charlottesville has grown faster than the rest of Virginia in eight of 10 private enterprise industry sectors, including natural resources and mining, leisure and hospitality, construction and manufacturing, and financial activities, among others.

In summer 2016, Entrepreneur magazine ranked Charlottesville No. 4 on its list of 50 top cities for entrepreneurs, a ranking that takes into account cost of living, business tax rates, percentage of college grads, well-paying job growth, and number of venture capital deals.

According to Tracey Greene of the Charlottesville Angel Network, which has invested $6.5 million in 32 tech companies since it launched in 2015, C’ville has a unique infrastructure in place that other cities don’t have.

“Take the Richmond area, which I have looked at tangentially,” she says. “A lot of start-up companies come to Charlottesville because of the assets we have that they don’t. They have more corporate support, but they don’t have as mature an angel network as we have.”

Getting it right

Greene says entrepreneurship is in this town’s blood. “Charlottesville has been known since the days of Jefferson to have an entrepreneurial focus and to be encouraging of entrepreneurs,” she says.

What it takes to keep that going is building on success, cultivating individuals willing to take risks, and investing in those risks, she says.

All that’s starting to snowball. In early 2016, the National Venture Capital Association named Charlottesville the fastest-growing venture capital ecosystem in the United States. The organization reports that from 2010 to 2015, venture funding increased from $250,000 to $27.7 million in Charlottesville, one of many cities nationwide to experience a boom in venture capital investments. Where only one local start-up received venture funds in 2010, by 2015, nine saw significant investments. Firms like Jaffray Woodriff’s Felton Group and Greene’s Angel Network have anchored the investments in technology-based businesses. The Community Investment Collaborative has played a similar role in the service industry.


Students, start your engines

UVA really, really wants students to start companies. At least, that’s our conclusion after learning about all the programs on Grounds that nurture young entrepreneurs. Of course the major hotbeds at UVA for those with a business bent are the Darden School of Business, home to 900 graduate students, and its Batten Institute for Entrepreneurship and Innovation. But there are a number of smaller centers, too. Like…

HackCville

If you’re a UVA student with a startup dream, you’re probably already a member of HackCville, which nurtures hundreds of future tech/design/media pros within two clubhouses on the Corner and a tight-knit community, locally and virtually. Members can access hands-on skills courses, how-to-launch workshops, summer internships, and field trips to cities around the country where they connect with business-minded alums.

iLab at UVA

From next-gen spinal surgery techniques to single-serve bake-at-home desserts, new companies nurtured by UVA’s iLab cover a lot of ground. A cross-grounds program primarily funded by the Batten Institute at Darden, the iLab offers 10,000 square feet of workspace, mentoring and networking for entrepreneurs and innovators—plus a 10-week entrepreneurial boot camp. Since 2000, the iLab incubator program has provided 250 companies with more than $1.5 million in grants.

OpenGrounds at UVA

Launched in 2012, OpenGrounds aims to bridge disciplines to help solve the world’s toughest problems. Under its umbrella, an extremely diverse group of projects take place—from design proposals addressing water pollution in India to biology-based robotics. OpenGrounds showcases such projects at annual festivals and sponsors film screenings, discussions, and publications that foster creative collaboration.

Galant Center for Entrepreneurship

Galant is the McIntire School of Commerce’s cradle for entrepreneurship. It offers speakers, start-up trips to Silicon Valley and various East Coast cities, and a pitch competition that has funneled more than $1.5 million to UVA-affiliated ventures.

SE@UVA

Would-be social entrepreneurs come to SE@UVA for the chance to kick-start their careers in global problem-solving. The program runs its own pitch competition, brings in speakers, and sponsors study-abroad opportunities, like a trip to Dominica to observe social entrepreneurship in action (think organic farms and sustainable tourism).

Pike Fellows Program

Three to five teams of engineering-student entrepreneurs each year are selected to be Pike fellows. They get intensive support and mentoring, plus up to $5,000 in seed money for projects based on novel technologies—and they can compete in an annual spring competition for the $50,000 Pike Award for Innovation and Entrepreneurship.

UVA Licensing and Ventures Group

The LVG is the pipeline by which scientific discoveries made at UVA—many of them medical technologies—receive patents and are brought to market. The group connects industry with UVA-based innovators, and hooks investors up with growing companies. UVA itself, via a $10 million seed fund created in 2015, is also an investor, with the fund being managed by LVG.

UVA E-Cup

The E-Cup (that’s E for Entrepreneur) is an annual competition in which UVA students at all levels can put forward their ideas—and those ideas don’t even have to be fully fleshed out. The “Concept” stage of the competition doesn’t require a business plan or a firmed-up team, while other stages demand that students develop their plan more thoroughly. Do it right and competitors can walk away with first place and $20K.

UVA Lighthouse & Works in Progress

Students who want to talk over their entrepreneurial projects with other innovators—possibly in the middle of the night—can take advantage of Lighthouse, a 24/7 “entrepreneurial workspace” and the home of Works In Progress, a community of peers in the startup realm. Personal relationships—including with dedicated staff members—are the emphasis here.—Erika Howsare

The city is taking steps to seed small businesses of all types. Through the Office of Economic Development’s Advancing Charlottesville Entrepreneurs Program, C’ville has assisted more than 70 businesses over the past five years. The grant program provides funding for advertising, equipment, and supplies. The OED’s GO Hire program also provides grant funding, with a focus on attracting, training, and retaining employees.

Brendan Richardson, who co-founded satellite image data firm Astraea in 2016, has taken advantage of such local funding. In 2017, Astraea received $1,000 per new hire via state funding, and the city matched the grant.

“It’s been great,” Richardson says. “I wouldn’t say that it is by any means the primary motivator for hiring—that’s growth and customer growth—but it helps to offset recruitment costs.”

Richardson says the University of Virginia is critical for Charlottesville’s entrepreneurial evolution. The school helps produce not only significant amounts of intellectual property that leads to commercial tech, but also individuals willing to stay in the community and build their businesses.

Some of those individuals, though, take a winding path to setting up shop, according to Greene.

“A lot young professionals move away to big cities and then venture back to build their families,” she says. “We have such a high quality of life. It’s a place where people want to work and live. They want to come to a city that has a slower pace of life, where you can breathe and feel the air in your lungs but still have that liveliness.”

And while Greene notes technology firms have spearheaded the entrepreneurial growth in Charlottesville in recent years, she says every tech job requires at least four traditional jobs for support. “You have all these jobs—baristas and restaurants, lawyers and accountants, retail shops—and it takes all of that,” she says. “Tech bolsters an entire ecosystem.”

Ty Cooper provides some of that support via his digital marketing and events firm Lifeview Marketing. He says smaller communities like Charlottesville bring a loyalty that larger metro areas don’t.

“They tend to support who they know,” he says. “If there is a builder who’s local that can only build for three times as much, they are going to use an outside builder. But when it comes down to it, they support people in their own community. You see that in most smaller markets; it’s more intimate.”

Prichard says Charlottesville punches above its weight when it comes to filling skilled labor positions.

“I can’t speak to biotech or energy, which are doing really well, but for a tech company there are advantages in Charlottesville,” he says. “There are really smart people that want to live here because of the quality of life. You can find the right talent to join the team, and you can do it at a lower cost structure than you can in San Francisco.”

Ty Cooper. Photo: Sanjay Suchak

Room for improvement

Charlottesville, of course, isn’t perfect when it comes to nurturing entrepreneurs. Being a smaller market means a smaller pool of customers, for starters, and it can be more difficult to convince outsiders that local companies are the real deal.

“Sometimes there’s a perception of Charlottesville,” Prichard says. “It can be harder when you walk into a room with the bigger players.”

That national perception took a hit after last year’s Unite the Right rallies, says OED director Chris Engel. But according to Engel, his office and others are working to combat that perception and keep investments flowing into C’ville.

At the same time, Engel recognizes much of the strife in C’ville and beyond is due to economic opportunity, “or the lack thereof.”

Cooper says encouraging diversity and assisting minority businesses is an area in which the city could improve. “The numbers are low on minority business,” he says. “But there has been talk about trying to change that.”

Greene says the community would also benefit from an “innovation front door.” While Charlottesville has no shortage of incubators and work spaces that invigorate entrepreneurs, folks in the tech business don’t have a place to go to be pointed in the right direction.

For a manufacturing business like Appleby’s, workforce issues are at the forefront. He says the city would see manufacturing growth if it built a “pipeline of young people out of high school” that want to go into the trades.

“We’re in the aerospace business, so we’ll be here for decades,” he says. “We need people who will roll up their sleeves and make parts.”—Shea Gibbs


Technical details

Startups in Charlottesville need not feel alone—there is a raft of  organizations standing ready to offer help and guidance. A person could stay very busy attending all the tech-related meetups and programs in town, pressing the flesh with possible investors along the way. Here’s a rundown of some resources local entrepreneurs can tap.

Charlottesville Business Innovation Council

A networking group with a 21-year history—in this game, that’s a long time—CBIC is the force behind a long list of local tech events. Its annual awards gala recognizes companies, startups, and innovators (Mikro Systems took Business of the Year in 2018) that are pushing the local tech industry forward. CBIC also runs a Tech Tour to introduce students to tech companies; casual happy-hour mixers; amped-up espresso discussions; and more formal panel events. It’s all meant to support entrepreneurs, build community, and foster learning.

Cville Bio Hub

The Bio Hub promotes Charlottesville as a hotbed for biotech innovation—by its own count, the industry employees 1,800 people in the area. More than 60 organizations are members of the Bio Hub, which hosts forums on topics like cancer research and locally developed pharmaceuticals. Organized in 2016, the Bio Hub won an $80,000 grant in August from the GO Virginia Initiative to continue growing the biotech industry here and attract top talent.

Charlottesville Open Bio Labs

A nonprofit focused on training locals to take part in a growing biotech industry, Open Bio Labs offers a lab space—stocked with everything from a 3D printer to spectrophotometers—that’s open to the public. Members can use the lab and enjoy discounts on Open Bio Labs’ courses, which are aimed at both K-12 students and adults. Mentorship for real-world projects—startup companies, scientific papers, and personal science quests—is part of the mission, too.

Charlottesville Technology Incubator

Office space on the Downtown Mall, if you’re a startup, is a pretty good deal. Founded in 2009, CTI provides fledgling tech companies prime real estate that makes networking easier (and comes with phones), plus structured events and mentorship for new entrepreneurs. WillowTree and Relay Foods are both onetime clients, along with a dozen or so others. Founder Gary Henry names “counseling and connections” as the most important benefits CTI offers.

Machine

An incubator in a flexible space that it shares with CBIC and the Charlottesville Angel Network, Machine has facilitated more than $5 million in investments for six local startups since 2016. While Machine itself isn’t an investor, says Alex Goodman, who runs it, “We’ve helped [companies] realize funding success in their early days.” Machine also offers office space, mentorship and other in-kind benefits to startups that successfully complete its application process.

Charlottesville Women In Tech

Aiming to make Charlottesville safe and friendly to female techies, four-year-old CWIT sponsors a series of monthly meetups for local women in the tech field. Providing “much-needed networking time for women,” says board vice president Kim Wilkens, the meetups have proven so popular that this year they grew into a one-day conference, the SWITCH ON! Summit held November 9. Meanwhile, CWIT also runs programming for K-12 girls through its Twech-Girls initiative, reaching more than 600 local girls last year. High school students can even get hands-on with real biotech research through the Bio-Med Tech-Girls summer program. Sounds like girl power to us.

Center for Innovative Technology

The Herndon, Virginia, office of CIT is an inspiration in itself—a striking, angular building made of reflective glass, the winning design in a 1985 competition. In the years since then, CIT has provided a wide range of tech-related services. Most relevant to entrepreneurs are its programs to connect Virginia-based startups with seed money and government contracts. Workshops and talks provide ideas and connections, too.

Neon Guild

If you’re a tech pro around here, chances are good you’re already part of the Neon Guild—it’s collected 450 members in its 22 years of existence. Guild members get together monthly for pizza, beer, and focused talks (October’s was on using storytelling skills to enhance user experience), and they stay in close communication via a lively email list. Dues-free and stripped-down, the Guild emphasizes personal connections and a casual tone.

First Wednesdays

Here’s another chance to mingle with techies once a month—in this case, at Champion Brewing Company. “No speakers, presentations, or slide decks,” promises the website: The idea’s just to chat with other folks interested in technology and business.—Erika Howsare

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