Miami’s global position provides an excellent climate for the nurturing of entrepreneurs, experts say, but a dearth of startup financing and collaboration makes it difficult for new ventures to find support.
As a community develops critical mass in specific industries, it becomes much easier for entrepreneurs to flourish, said Carl Roston, an attorney at Akerman Senterfitt who is chairman of Florida Venture Forum, which acts as a liaison between entrepreneurs and investors and advisors.
Ravi Ugale, a partner at Crossbow Ventures in West Palm Beach, said Miami’s internationalism is a plus. Crossbow focuses on IT, communications, health-care and financial services in the Southeast.
In addition to Miami’s trading connections, he said, "the Hispanic community is the largest minority community in the US, and a lot of companies have been formed to address that."
Venture capitalists look for three factors in assessing a young company, Mr. Ugale said – "strong management, potential to fill a global market and the product’s uniqueness."
Since the dot.com debacle, he said, most venture-capital funds have opted only to finance companies that have shown success.
The presence of universities is conducive to an entrepreneurial climate, Mr. Ugale said, because academic researchers are often the source of new ideas.
"Lots of these folks have succeeded," he said, "but usually by bringing on the right people to join the management team. Their skills are not in business."
Entrepreneurship programs at universities and not-for-profits such as the Small Business Administration and SCORE provide advice and expertise, Mr. Roston said, and "as companies become larger, they can have their own networks of professional advisors."
Alan Carsrud, executive director of the Global Entrepreneurship Center at Florida International University, said the biggest problem for entrepreneurs in South Florida is that "while we certainly are a business-friendly place in many ways, we don’t have the collaboration between groups to make it happen."
For example, he said, "South Florida lacks vehicles for pulling technology out of research institutions and figuring out which part to license."
Carsrud said another key need is for "angel investors to provide capital at the early stages before venture capitalists will come in. There are very few seed-stage funds."
Israel Velasco, president and CEO of Colonial Bank’s South Florida region, said the current social environment is an impediment to business success.
"So many children come from homes where there is no one who has time to teach them basic skills such as how to write a check and how to conduct a job interview," he said. "Entrepreneurship requires preparation, even while a child is still in school."
A student with a dream of opening a business should begin by getting a job at the lowest level of the industry, he said, to gain work experience crucial to getting funding as well as running a business.
Junior Achievement of Greater Miami is one program that is filling that social gap, said Mr. Velasco, chairman of the group’s board of directors. Working through the school system, the organization teaches young people about business, economics and free enterprise, he said.
"With this organization," Mr. Velasco said, "we bring the business environment into the classroom and talk about real-life experiences that these kids would otherwise never have an opportunity to hear.
"We prepare young people to become active in the workforce by providing examples to help them start formulating early what they need to do."