Startup Communities: Building an Entrepreneurial Ecosystem in Your City

SERVICE PROVIDERS

Every startup community has service providers. These are the lawyers, accountants, recruiters, marketing consultants, and contract CFOs who help startups in many different ways. Some of these service providers are significant companies; others are individual consultants.

The best service providers invest their time and energy for no charge in early-stage companies. As these companies develop, the service providers are rewarded with long-term business relationships with fast-growing companies. In some cases, smart service providers will invest in early rounds, and occasionally the returns from these equity investments can dwarf the fees paid to the firm over time.

In addition to focusing energy on the startups, great service providers can help with the growth of the startup community. Many of the more established firms have marketing budgets that can underwrite entrepreneurship events or they have physical infrastructure, such as a large office, which can be used to host startup events. Some partners at law or accounting firms love working with startups at the very early stages and often have broad networks that can be brought to the table. In all cases, if the service provider is taking a long-term view and looking past the next monthly fee, it can have a very positive impact on the development of the community.

Some service providers and consultants are in it just for the money. These firms don’t understand the “give before you get” philosophy and tend not to ...