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They may not be the whole answer – so let me know in the comments what you’re doing, or who’s taking action to fill the gaps.
Plug and Play
Recently seven local startups received $25,000 each from Plug and Play San Diego. Plug and Play Tech Center, an accelerator specializing in growing technology startups, created its local accelerator program specifically to grow entrepreneurship in San Diego late in 2012. Since that time, it has provided two rounds of funding that have allowed local businesses to go to the Bay Area, where it’s easier to get funding and help.
There were seven winners in the first pitch competition and eight in the more recent round, said Gabriela Dow, a spokeswoman for the group. That translates into $375,000 in seed money to help local entrepreneurs tap into even greater resources in the last year alone.
Dow said that despite programs like Plug And Play, there’s still a basic disbelief in San Diego regarding the availability of capital. Dow said Plug and Play didn’t receive as many applicants as it had hoped in its most recent round. She thinks people may be unaware or even fearful of the process.
“We don’t see it as often here in San Diego, and we do see that funding is often easier in other ecosystems,” said Dow. “The availability of more easily obtained startup money in a useful amount is something the entire region has to get accustomed to.”
These six startups were selected in May 2013, completed the StartupCamp program in September, raised over $2 million collectively and are back in San Diego continuing to grow: eFinancial Communications, Vioozer, Santech, Tip Network, Pcsso and Rock My World.
Feb. 28 is the application deadline for its third startup pitch competition. Applications are available here.
Dow also noted an advantage San Diego offers startups not available in Silicon Valley: proximity to Mexico.
“For companies based in San Diego, they can benefit by proximity to Mexico because of such things as Mexico’s talent pool, lower costs of living and options for some approvals and trials that may be easier there,” she said.
When it comes to Mexico, Avi Stieglitz, co-founder of Nulu, a ground-breaking language learning application, also sees options for funding and support.
“For Nulu, the concept resonated stronger in Mexico,” said Steiglitz. “There, business supporters better understood the need for English instruction.”
Nulu founders were able to parlay that understanding into funding:
“We discovered that funding came more easily from non-native English speakers and individuals involved in business outside of the U.S.,” said Stieglitz. “People who grasped the concept were outside U.S. or were people here now who weren’t born here.”
Fostering Local Funding
Other champions of the local startup environment note the important role that successful area businesses and entrepreneurs must play in expanding business funding.
“I would tell anyone who wants to start a company to do it in San Diego,” said Kelly Abbott, managing director of San Diego Livefyre. (Abbott also helps run Voice of San Diego’s website.) “San Diego has it all: talent, lifestyle, climate, location. Now, it’s starting to have more capital and attention to funding.”
Abbott is helping create more funding for startups. In November 2013, he established the San Diego Tech Founder Pledge, a way for locally successful entrepreneurs to pay their success forward by pledging money to help other area entrepreneurs. The pledge form, available as a Google doc, says: “I will invest 10 percent of my earnings from my successful San Diego companies exit back into another San Diego startup.”
Abbott said he believes entrepreneurs who make the pledge will help address two issues currently facing San Diego startups: access to funding and creating more local companies. He said that when businesses have more funding, they can attract and keep local talent as well.
“When you pledge, you agree to be put on list,” said Abbott. “Our goal and job is then to connect entrepreneurs, to help new founders make connections to those who have pledged to support new business.”
The program hasn’t been up and running for too long, but Abbott said he’s been heartened by the response of entrepreneurs from the San Diego startup community.
“Entrepreneurs here are saying, ‘Absolutely, it makes perfect sense,’” he said.
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This article relates to: Active Voice, Business, Technology