The Small Business Administration (SBA) recently announced a new initiative to set up small business accelerators around the country. Noticing that the bulk (60%) of VC firms and start-up capital investment is focused in just three states—California, New York and Massachusetts—the SBA wants to foster start-ups and entrepreneurship more broadly around the country.
Washington state ranks number four in the nation on this list, by the way. Not too shabby, but we’re still competing with every other state for the remaining 40% of the investment pie. The Puget Sound Business Journal‘s Emily Parkhurst observes, “Seattle knows a thing or two about competing with [Silicon] Valley for everything from venture capital funding to the next big initial public offering by a tech firm.”
The good news is that there’s more and more attention being paid to small businesses lately, recognizing the fact that these enterprises are creating new jobs in the U.S. at a greater rate and driving more dynamic economic expansion and innovation than large companies. As a result, the SBA sees investing in small businesses as a key to continued recovery and economic growth, thus the accelerator initiative.
So what is a “business accelerator” exactly? It’s an organization that provides guidance, advice, resources and support to small businesses, helping them achieve success. It’s different from an “incubator” which helps new businesses get off the ground. There is some overlap, but generally an accelerator takes a young yet already established business and helps it make the leap to success and growth. This Inc. Magazine article helps explain a bit more about both incubators and accelerators.
You might have heard of YCombinator, the Silicon Valley incubator/accelerator firm that’s helped launch tech ventures like Dropbox and Airbnb. Seattle’s own TechStars is recognized as one of the top accelerator firms in the country, focusing on the tech industry (obviously). Other Seattle accelerator firms include Atlas Accelerator and 9Mile Labs. Â Washington C.A.S.H. (Community Alliance for Self-Help) is another, but they take a community-based approach to supporting entrepreneurs, especially women, minorities and low-income individuals who might not have access to more traditional funding and resources.