‘Hybrid’ system proposed for new IEC

A proposed restructuring of the Fort Smith Innovation and Entrepreneurship Center (IEC) includes a “hybrid” incubator/advanced business support center that would be housed at Chaffee Crossing and directed by a “BIG Board” with relationships to investors, banks and other investment sources.

The plan was proposed Wednesday morning (July 27) by University of Arkansas at Fort Smith Chancellor Dr. Paul Beran during the second meeting of area business and civic leaders interested in re-engaging the IEC with a new focus. The first meeting was held June 29.

The IEC which opened in 2007, was initially a joint effort of the University of Arkansas at Fort Smith, the Fort Smith Regional Chamber of Commerce and the city of Fort Smith. The IEC was created to help foster innovative ideas, inspire new production, assist entrepreneurs, build and strengthen businesses and encourage youth to think entrepreneurially.

Michelle Stockman was hired in April 2007 as the first IEC director, but resigned in November 2008 when hired by Little Rock-based Arkansas Capital Corp. to help implement entrepreneurial programs statewide. Stockman attended the Wednesday meeting and the June 29 meeting.

It wasn’t until June 2009 that UAFS officials — who by then had control of the program — hired Nick Remy to direct the IEC. But Remy, concerned that the program was becoming more academic than entrepreneurial, left the post in June 2010.

Beran’s proposal calls for the creation of an organization with a director and executive assistant. The pair would provide support with “advanced business planning,” entrepreneurial/incubator support and create a connection with potential investors. The two IEC employees would also work to funnel small business owners or potential owners to other resources, such as the Small Business and Technology Development Center (regionally administered by Arkansas Tech University in Russellville), Small Business Administration and the UAFS Family Enterprise Center.

The Business and Industry Group (BIG) board would be a group of people willing to invest in the IEC startup and help connect IEC staff and clients with angel investors, banks and other investors.

Beran emphasized Wednesday that his plan is an attempt to synthesize ideas generated from the June 29 meeting and numerous discussions during the past few years. He also said it is a starting point for discussion and is not set in stone.

UAFS has $187,000 in IEC funding available to renovate offices at Chaffee Crossing and hire staff. Beran envisions finding 10 area businesses or individuals who will commit to collectively providing at least $200,000 a year for a three-year period. He said his goal is to have an IEC director job description no later than November with a person hired by spring 2012.

Other points in Beran’s proposal include:
• UAFS students, faculty and staff would be “involved very heavily” in promoting the IEC and using its resources for unique educational opportunities.

• The IEC would be removed from direct UAFS oversight and established as a stand alone operation. “I want us (UAFS) to get out of the business of being the employer for that person (IEC director),” Beran explained.

• The BIG board and IEC director would serve as a “vetting agent” between startup or ongoing companies and potential traditional or unique investors.

• A “revenue stream” from incubator operations could also help fund the IEC.

• The IEC director should be a person who has relationships with the financial community or has proven capable of creating and maximizing such relationships.

• The new IEC might recruit “commercialized ideas” from incubators at research universities to complete their business maturation at the IEC.

Discussions among the Wednesday morning group centered on the types of companies — startup or existing, or both — to be supported, the levels of support offered and the goals of an incubator operation.

“What do we want to incubate?” asked Rep. Tracy Pennartz, D-Fort Smith, adding that she hoped the focus would be to create more higher-paying jobs in the region.

Rusty Myers, economic development director with the Western Arkansas Planning and Development District, agreed with Pennartz, saying that determining the focus of an incubator program is “a key question.”

Continuing on that theme, Craig Pair, president of Fort Smith-based Control Technologies and a board member of the original IEC, said the overall IEC discussion must include some idea of what the participants “want to see as the end result” of the support.

“Philosophically, how do we teach an existing business to grow?” Pair said, adding that there are many options to consider in helping a new or existing business to plan for obstacles and opportunities that are “three to five years down the road.”

With consensus from the group, Beran said the next step will pull together members of the BIG board and a possible advisory group who can then take the overall concept and determine the smaller but important details in making the IEC work. Beran said he is confident that if the group is represented primarily by business owners, the IEC will have “opportunities for multiple tries at success.” Under a university system, Beran said, an early setback or failure is often fatal.

“This is a really good step,” Stockman said after the meeting.

Pair said he likes the idea of an IEC director and board working together to connect IEC clients with potential investors.

“That’s the thing we didn’t have (with the first IEC effort). We did not have that pipeline to financing. … With this, they’ve already vetted the business before they reach out to the investors,” Pair explained.