Right now there’s really only one great educational institution for those who want to learn how to be an entrepreneur, and it’s called the School of Hard Knocks. That isn’t to say there aren’t some wonderful classes and programs in entrepreneurship at places like MIT, Stanford, and other universities. But those are typically short-lived courses with little, if any, hands-on training. In truth, there aren’t very many opportunities for hopeful entrepreneurs to learn first-hand about the career. And even if you have a passion for building your own business, it’s often incredibly hard to put in the time to do so without giving up your day job—and unless you are independently wealthy or a starving student already, that is often impossible to do.
Today, the Kauffman Foundation of Kansas City, MO, is launching an ambitious program designed to help fill a big gap in the entrepreneurship world by providing two-year fellowships to allow would-be entrepreneurs to build their dream business—salaries and expenses paid—while working side-by-side with mentors who know how to do it. It’s called the Kauffman Entrepreneur Fellows program, and it’s being launched in partnership with three leading venture creation companies—two in Silicon Valley, and one right here in Boston. That would be PureTech Ventures, which is run by Xconomist Daphne Zohar.
There’s a lot to this interesting program (read on). But first it’s important to note that “venture creation” companies are different from venture capital firms because they don’t typically fund entrepreneurs who come through the door with business plans. Rather, they tend to come up with their own ideas for starting companies and then proceed to launch those businesses themselves, often in partnership with VCs. Working with such firms, as opposed to venture firms, would presumably give hopeful entrepreneurs a much deeper training ground in forming their own company.
Zohar says the opportunity to have one or more fellows at PureTech fills a big void and helps both the entrepreneur and the host company. “It’s an entrepreneurial initiative and something that doesn’t exist” anywhere else, she says of the program. PureTech and Kauffman each pay half a fellow’s salary, so PureTech gets a motivated worker at a bargain rate to help it explore new ideas and hopefully launch companies. The fellow, of course, gets financial security and stability and first-hand training—and not just for a semester, but for two years. After that time, the fellow could potentially join one of the companies he or she helped form, or perhaps stay with PureTech.
“It’s real exciting. I wish that there was something like this that existed when I was first starting out,” Zohar says.
Lesa Mitchell, who has the great title of VP, Advancing Innovation, for the Kauffman Foundation, says her organization has long been involved in fueling entrepreneurial flames in different ways. Back in the early 1990s, the foundation convened a group of luminaries on Cape Cod that in 1994 led to a program to help take the venture industry to a new level through what was called the Kauffman Fellows Program. The idea was that the venture industry was mainly staffed by “investment bankers and business guys,” she says. The fellowship program was designed to bring more scientists and engineers into the field by supporting fellowships for them at leading venture firms. The program was a huge success, she says, and in 2003 it was spun off and placed under the wings of a separate entity, the Center for Venture Education, which is based in Palo Alto but still tied to the Kauffman Foundation.
Since then, the foundation helped create the Lenexa, KA-based Angel Capital Association, a leading trade association for angel investor groups around the country. Having worked to bolster both the angel and venture components of innovation, the foundation turned its attention to entrepreneurs themselves.
In addition to PureTech, which has launched a variety of life sciences companies, the other venture-creation firms involved initially with the Entrepreneur Fellows program are The Foundry and Exploramed. Both are based in Menlo Park, CA, and both focus on medical device businesses chiefly, Mitchell says.
Mitchell says fellows will be asked to keep rigorous notes and report back weekly and monthly on process, lessons learned, mistakes, and everything else associated with being an entrepreneur. All the fellows—there will only be 3 or 4 to start—will then be brought to Kansas City each quarter. “We’re sharing lessons and talking about what are we learning,” she says. The idea is to take those lessons “and create greater programs” in other sectors, including information technology, and also study “what are the lessons across verticals.”
“We literally can start figuring out the science of startups as we go,” she says. “I think it will be hard, but very interesting.”
In conjunction with the Entrepreneur Fellows program, the Kauffman Foundation is announcing the creation of an Entrepreneur Postdoctoral Fellows program that will fund entrepreneurship training for 12 post-doctoral researchers at various institutions across the country. More on that program should soon be available on the foundation’s website.
Mitchell says the foundation is the largest funder of economic research in the U.S. relative to entrepreneurship—and that its mission is more important now than ever. “There is now the reality that the only way we’re going to see growth is through the creation of new firms,” she says. In one report the foundation commissioned, Entrepreneurs and Recessions: Do Downturns Matter?, Infectious Greed blogger Paul Kedrosky chronicles the role of entrepreneurs during past recessions. Mitchell’s take: “Many of our great firms have been founded during a recession. In many cases there are more business opportunities now.”