Miamis Downtown Authority Funds Um Business Incubator
Written by Catherine Lackner on May 24, 2012
By Catherine Lackner
Weary of seeing young entrepreneurs get educations here and then accept jobs elsewhere, Miami’s Downtown Development Authority will partner with the University of Miami’s Launch Pad to create a business incubator in the Terremark Network Access Point of the Americas on Northeast Ninth Street.
The downtown incubator is an outgrowth of the school’s successful on-campus Launch Pad, founded in 2008 to support early-stage businesses with incentive grants, mentoring and other services.
"Miami, like many communities, has a fragmented and inefficient entrepreneurial support system," says Launch Pad’s proposal. "The solution is to concentrate the resources that tech entrepreneurs need in one location, serving as a focal point for mentors, service providers, investors, and entrepreneurs."
The downtown authority is to fund the two-year program at $227,500 per year for salaries, equipment, marketing, events and other expenses. None of the money will go directly to entrepreneurs.
"What the hell is an incubator?" asked Marc Sarnoff, authority chair and Miami city commissioner, at Friday’s authority board meeting. "It’s a way of creating opportunities for those who lack capital. UM has a great brand; they know how they can create more opportunities in Miami. In a perfect world, government should stay out of it, but if we don’t get involved, this will always be a tourist-driven city."
In entrepreneurial hubs like Silicon Valley in California; Austin, TX, and San Francisco, he said, governments support business incubators, and in turn they have become attractive to young entrepreneurs.
"I like the program," said board member and developer Jerome Hollo," but I haven’t seen any commitment for them to stay."
"If we force people to stay, that hurts our ability for them to want to stay," said Susan Amat, Launch Pad co-founder and executive director, who attended the 29th floor meeting downtown through a Skype connection. "I would hope the board would be open-minded."
"An accelerator is very attractive to new IT endeavors," said board member and Miami Dade College Provost Rolando Montoya, "and incubators cost millions to create. UM has four years of experience with this."
"When I saw this package, it’s taking tremendous resources from us," Mr. Hollo said. "Is it going to create jobs?"
"Take a leap of faith," Mr. Sarnoff suggested.
"For years, we have reserved money for business promotion and we rolled it over every year," Dr. Montoya said. "Maybe some entrepreneurs will leave, but at least in the beginning, they are going to be part of the downtown community, and in a part of town that’s not particularly developed. It’s our job to keep them here."
"We will be multiplying this investment," predicted board member and Heat Group Executive Vice President, Arena Kim Stone. "Facebook was just a small idea one day," she said of the social media giant, which just that day sold its initial stock offering for $16 billion, bringing total company valuation to $104 billion..
After directors voted to back the incubator program, Mr. Sarnoff told them, "This is the first time you’ve acted like a DDA."