By Ean Gomez
One Spark, the world’s largest crowdfunding festival, is the not-so-secret trick Jacksonville has up its sleeve to help the city become another hub for up-and-coming startups.
In a recent CNN article, experts in the startup and small business field claim Jacksonville is drawing entrepreneurs from larger startup hubs like Silicon Valley and New York because of the city’s cheap business and labor costs and low taxes. Unlike these larger cities, Jacksonville has a much smaller and more spread out population that makes it more difficult to establish oneself, yet less competitive for startups to receive funding.
According to a study out of Harvard Business School, 25 percent of startups fail within their first year, and the odds of the startup failing each subsequent year only increase. Only 18 percent of business ventures succeed. The study also indicated that crowdfunding is a crucial fundraising tool for startups, and nearly half of the money raised in 2012 came from crowdfunding both in person and online.
The city of Jacksonville office is trying to incentivize startups through training grants, revenue grants and real estate tax abatements, along with the numerous business incubators that call Jacksonville home.
“One Spark fills a void in the financial sector,” said Carlton Robinson, senior director of growth for the Entrepreneurial Growth Division at the Jax Chamber of Commerce. Carlton said Jacksonville’s draw as a major startup community is two-fold: Jacksonville is a city that supports startups and encourages risk-taking, and people want to see the city change and have the resources available for them to do so.
“Maybe 10 years ago you needed a business plan, ‘I need this plan, I need this resource,’ but with technology today, you really have people that are self-organizing,” said Robinson, about the growing trend in entrepreneurs taking initiative to create their own network of friends and peers. Entrepreneurs are taking to social media and organizing groups through applications like MeetUp and getting together at coffee shops and sharing ideas.
Financial experts at the chamber of commerce and small business development center claim One Spark brings a lot to Duval County, including financial opportunity, networking and the excitement of the festival atmosphere. Last year, nearly 260,000 people attended the festival, with 20 percent of those in attendance coming from the city.
One Spark has featured nearly 1,500 unique entrepreneurs in the past two years alone. Participants in the festival vied for funding and networking opportunities with investors and other entrepreneurs. According to Meredith O'Malley Johnson, One Spark’s community and public relations director, the festival has not done an impact study on those who haven’t been awarded prizes.
Kevin Monohan, special projects director for the Small Business Development Center at the University of North Florida, said that one of the primary reasons Jacksonville is so popular for startups is because of the resources available to entrepreneurs. Monohan said that the city, the chamber of commerce and the SBDC work hard for entrepreneurs, but there are also 30 other organizations he suggests to entrepreneurs in Duval County.
Along with the many city-supported resources Duval County touts, Jacksonville finds itself the home of numerous “accelerators” and “incubators” that help startups cultivate capital.
An accelerator, on one hand, is a time-sensitive mentorship program with entrepreneurs associated with the accelerator. Along with mentorship, a cash investment is made in your company to spur growth in the business.
An incubator, on the other hand, is a non-time-sensitive process where the business is physically moved with other startups, and mentorship comes from both proven entrepreneurs and fellow startups.
The Small Business Development Center at UNF is just one of the many resources available to small businesses and startups that offer help at a minimal cost and “deliver up-to-date management advice, training and information to help business owners make sound decisions,” Monohan said.
“Its not always the one with the best pitch that winds up getting the money, it’s usually quietly and afterwards,” said Monohan, on the other avenues that startups can hope for. “Some investor comes and something interesting happens.”
These hidden investors that can come up later on after the festival is over are known as “angel investors.”
The KYN group accelerator is one of the reasons some are skeptical about Jacksonville’s potential. The accelerator is run by Elton Rivas, current head of One Spark. The KYN group was funded by NFL franchise owner Shad Khan who invested over $1 Million, but after a public dispute between administrators of KYN and Khan, the company folded in late 2014. In response to recent events in the Duval county area about the viability of accelerators and startups such as KYN, Monohan said, “I think short term it was a surprise to people, but at the end of the day, it’s simply a misunderstanding between folks.”
With all of the startups it facilitates, One Spark is growing Jacksonville economically. David DeCamp, Director of Communications for the City of Jacksonville said One Spark creates a positive impact on the city’s economy.
“We do see a strong economic impact from One Spark. We have 260,000 people downtown,” DeCamp said. “The idea of activating our downtown through festivals … has been a really big priority of the mayor in the past three to four years.”
One Spark has created a perfect outlet in Jacksonville for startups to take off. One Spark Co-founder Elton Rivas is confident about the ability of the festival to guarantee something positive for all creators.
“One Spark, over the past couple of years, has become a great platform of ideas, startups, companies, musicians…to launch their ideas and receive feedback,” Rivas said.
If not money, Rivas is hopeful that experience, networking and criticism will benefit the entrepreneurs and make startups more possible.
“Based on the feedback from creators,” he said, “that’s been the single greatest point of value so far with One Spark.”
Find more at https://onespark.com/festival/2015