In February, New York City Mayor Michael Bloomberg announced the founding of the new NYC Entrepreneurial Fund. The goal of the endeavor is to foster start-up companies and businesses to build or remain in New York. The Fund is the first of its kind to be located outside of Silicon Valley, California.
According to the Wall Street Journal, Mayor Bloomberg said, “The value proposition here is [New York] is a great place where intellectual capital is important.”
The city began the fund with $3 million, and FirstMark Capital added $19 million to the pot in May of this year. According to the Journal, Mobile application company MyCityWay is the first business to benefit from the Entrepreneurial Fund and will soon relocate its offices from Jersey City to Manhattan in addition to spear-heading other growth initiatives like hiring new employees.
The Entrepreneurial Fund allows New York City to have a financial stake in start-up companies while also fostering economic growth in a city hard hit by the downturn of the financial services sector. And for those worried about a city-run bureaucracy stepping fully into the waters of venture capital, rest assured that FirstMark Capital will manage much of the day-to-day operations of the fund. According to CNNMoney.com, “FirstMark Captial will choose, manage and monitor the investments, but New York has veto rights over any of FirstMark’s suggested investments.”
The question I find myself asking after reading about these business developments in New York, is why the same cannot be done for Birmingham? Birmingham is home to an amazing brain trust that includes numerous universities and research centers as well as a host of talented and educated individuals who would like to make the city their permanent home. (The low cost of living here in comparison to cities of comparable size is a huge draw to non-natives in, and of, itself.)
However, in the past 20 years, it seems that more and more of the talent and potential business leaders vacate Birmingham for greener pastures. Two decades ago, Birmingham competed with Atlanta for industry and growth. Today, we compete with Huntsville, and sadly, Montgomery is not far behind.
If anything, the actions of NYC Mayor Bloomberg show us that a city has to be willing to put its money where its mouth is. If you’re interested in developing industry, growing business and fostering innovation, there must be some sort of city-wide resource for those with great ideas and plans for the future. To wait for organic growth or trust that start-ups will find their own way in your municipality, is to lose them to cities with better incentives, or worse yet, allow them to die from a lack of support, education and capital.
Can Birmingham do this? Yes, it probably can establish an entrepreneurial fund. But, to be successful, it would also have to be done carefully and with a strong venture capital firm behind it. Those in charge would also have to put politics aside and look at these investments with a non-partisan eye, and the established business community would need to pledge their support to the endeavor.
Yes, Birmingham is plagued by financial problems, but as we look to the future, it is important that we don’t forget to see the forest for the trees. A change in direction, possibly akin to NYC’s Entrepreneurial Fund, could be just what we need to reverse our current decline. Often in business, to stay still is to fall behind. Birmingham must move forward and embrace a future vision of the city that, for many, will be radically different. However, to cling to the past and “the way we’ve always done it,” will accomplish only one goal – that of keeping us in the past.
I think we’re more than ready to move forward.
Goodrich Law Firm, LLC