A different approach to venture capital Officials look to Fairfield for inspiration By JOHN R. PULLIAM The Register-Mail Posted May 21, 2009 @ 10:23 AM
<http://www.galesburg.com/news/x124592237/A-different-approach-to-venture-capital>http://www.galesburg.com/news/x124592237/A-different-approach-to-venture-capitalGALESBURG - Fairfield, Iowa, is a unique town, known for its entrepreneurship. Many Galesburg officials want this city to become an entrepreneurial community, but the model is different from Fairfield.
Galesburg Economic Development Director Cesar Suarez said last week that a group from Galesburg plans to visit Fairfield, a southeastern Iowa town of about 9,500 people. Many of the successes cited on Fairfield's Chamber of Commerce Web site are remarkable. The city has five bookstores and, according to the Web site "more restaurants per capita than San Francisco."
Since the formation in 1989 of the Fairfield Entrepreneurs Association, per capita income in Jefferson County has rocketed from 50th in the state in 1990 to 18th today. Fairfield has attracted $280 million in venture capital, one-third of the total in Iowa over the past 20 years, resulting in nearly 4,000 new jobs spread over 160 companies. By comparison, San Diego, Calif., which is 130 times larger, has attracted only twice that amount of venture capital - $550 million - for 200 companies.
The FEA has mentored more than 40 communities in 17 states.Fairfield attracts venture capital from graduates of Maharishi University of Management, formerly Maharishi International University. Founded by transcendental meditation guru Maharishi Mahesh Yogi, there are about 800 students on the 272-acre campus of the former Parsons College.
The Galesburg Regional Economic Development Association had a venture capitalist/angel capitalist workshop about a year ago. Six entrepreneurs visited with members of The Heartland Angels.
"Venture capital is vitally important," Garza said. "Looking forward, that's something we've got to bring forward more. It's a complicated process. Venture capitalists are always looking for a big return."
GREDA Vice President Dick Johnson said there are drawbacks. He said venture capitalists want an exit strategy, say, in five years.
"They may say to that client, 'At this time, we sell this. Whatever it sells for, you'll get your percentage, but you can be replaced as CEO.'"
Johnson said it's hard for someone to take an idea to development, then agree someone else will sell it in five years.
"It's kind of like getting married," he laughed. "There's a very strict pre-nuptial."
Johnson said there are local approaches, such as landlord assistance. He said owners of Galesburg's three large office buildings - the Weinberg Arcade, the Hill Arcade and the Bondi Building - have, on occasion, agreed to reduce rent to help an entrepreneur raise capital.
"In a dying community, those buildings are all empty," he said, which is not the case here where the buildings are locally owned and maintained.
"Galesburg is blessed with local decision makers and local property owners," Johnson said.
"It bodes well for small-business owners," Garza said. "Yes, we have a recession, but, paradoxically, this is the busiest I've been."
He said he has also talked to people from the immigrant community about entrepreneurship. Garza hopes for a chance to apply for Community Development Assistance Program money again next year.
"This is a pilot program," he said. "Early indicators are we have a good chance. One never knows."
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Comments (3) 2 hours agoNice article. Yes, Fairfield is a wonderful place. I am sure that Cesar Suarez will have a great time there and see the great creative spirit that abounds there.
JumpinJack 1 hour agoI have visited Fairfield Iowa and have to say I was also impressed with the place. Not only did it have many restaurants but it also has an amazing amount of artistic and musical events and venues for such a tiny town of 10,000. I'm not sure what is the reason for all this creativity. Is it the water or the Transcendental Meditation?
Alethiadoc 23 minutes agoI love Fairfield. I was kind of a west coast snob, before i spent some time there. I love small towns and this is such a vital community of creative people interested in health, the environment, art and technology. I don't know if exceptional people gravitate towards Transcendental Meditation or TM makes people more creative or both. Now if they could just do something about the freezing cold weather in the winter, I would definitely move there.
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