During recent years Hampton Roads has been making a huge effort to revitalize its economy with innovation and small business. They’ve already achieved significant success– in 2015 Hampton Roads was ranked 18th in the top 40 metro areas for startup activity. What makes their entrepreneurial climate even more striking is that it was not long ago when entrepreneurs were underdogs in an area full of big employers like universities, hospitals, and the government.
The change in the culture of Hampton Roads was triggered when its economy was hit hard with a one-two punch: the 2008 recession and the 2013 government budget sequestration. Nearly half of the region’s economic activity was comprised of defense spending, so it was especially difficult to create new jobs at the pace of other coastal areas like Charlotte or Raleigh. What is exceptional about Hampton Roads’ recovery is that they are not looking to duplicate the DOD-rich times of their pre-2008 economy; they want to recreate their own economic infrastructure.
Nearly three years ago, this fell under the job of the Hampton Roads Community Foundation, which created four task forces to focus on different aspects of the economy. “The goal was not to force a new system from above, but to provide the ingredients for growth,” says Paul Hirschbiel, the leader of the entrepreneurship-focused task force and chairman of 757 Angels. The Community Foundation didn’t want to impose a new model of entrepreneurship onto Hampton Roads; in order to have an effective, long lasting system, it needed to evolve organically and with the support of the community. Hirschbiel describes it as “coming out of the ground.”
Hampton Roads’ entrepreneurial ecosystem still lacked a serious injection of capital, and from that need, 757 Angels emerged. 757 Angels, an investment network, fills an important role for startups by providing support during the “in-between” stage of financing, when companies have a product and a plan, but lack the backing to draw bigger investments. Accepted companies undergo an intensive eight-week vetting process which culminates in a presentation to the 15-member board of angel investors. There are more than 100 investors with 757 Angels, mostly local business leaders, and, impressively, over half have already made investments via the young network.
757 Angels’ numbers make the group stand out. 9% of participating companies receive an investment. And, during the rather brief two years of their existence, 757 Angels has put forth $8.5 million dollars worth of funding into new regional and state businesses.
These businesses are notable for their variety. 757’s distinctively generalist mindset, a far cry from Hampton Road’s old system, is part of what makes their group strong. 757 Angels has sponsored innovations in fields ranging from healthcare to home-brewed craft beer to bow hunting. Its impact also reaches back to the Hampton Roads community itself. An EdTech company funded by 757, MajorClarity, is currently in the early stages of integrating the VA Beach public high schools onto its platform.
The region’s cultural shift around entrepreneurship has been significant. One example comes from Gary Warren, a member of 757 Angels’ board, who left an established job with NASA about 25 years ago to become an entrepreneur. He later created ivWatch, a company which created a device to detect leaking or failing IV’s. ivWatch started with just local financial support, and Warren says that nearly all of their later stage capital was raised through 757 Angels. The success of ivWatch demonstrates 757’s dual importance in the region: not only does the network inject crucial funds into the startup economy, but they serve as a voice for entrepreneurs in the area. As the Hampton Roads’ startup economy matured, 757 Angels provided formality to the new class of entrepreneurs, like Warren, in the Hampton Roads region.
Hampton Roads is not just working hard to change its own economy. The region is starting to connect into a statewide network of entrepreneurship as well. Even with all of their recent successes, a new age of economic growth and innovation is only just beginning for Hampton Roads. There’s a lot more in store for the region– and for the rest of Virginia.
Join 757 Angels and come celebrate the Hampton Roads startup community.
Six Virginia startups will compete for $25,000 on Wednesday, September 21 at 5pm at the Virginia Beach Aquarium in a live pitch competition.