Startup Communities: Building an Entrepreneurial Ecosystem in Your City

ATTEMPT BY A FEEDER TO CONTROL THE COMMUNITY

In many communities the feeders masquerade as leaders and in some cases try to control what’s going on in the startup community. This is a syndrome I refer to as feeder control, and it stifles short-term growth and long-term health of the startup community.

VCs are some of the worst offenders of this. As I mentioned earlier, VCs are important feeders, but it’s very hard for them to be leaders. Although there are exceptions, many VCs, especially in smaller cities or regions that are not as well known for entrepreneurship, position themselves as gatekeepers for people outside the startup community. Phrases similar to “we know all the interesting things going on” or “we see all the best deals” reinforce this position yet are almost always false. This is a classical hierarchical view of the world and simply doesn’t work in a widely networked startup community.

Many of the best entrepreneurs are turned off by this type of attitude and consciously avoid engaging with these VCs. More importantly, many VCs sit back and wait for the entrepreneurs to come to them, rather than engaging deeply in whatever is going on around them, regardless of whether they have an investment in a particular company. Either way, this kind of behavior rarely accelerates the growth of a startup community.

Government is another instigator of feeder control. Although this happens at a federal, state, and local level, it’s most obvious at a state level. A new governor ...