Startup ecosystem has a new Silicon Valley: Philadelphia

Startup ecosystem has a new Silicon Valley: Philadelphia

By: Beatrice Silva

2 min read July 2020The term “startup” may bring to mind a group of motivated mid-20-year-olds huddled together in a high-tech office somewhere in Silicon Valley. However, the southern part of San Francisco Bay is no longer the only hotspot for young, ambitious people. The Philadelphia Business Journal recently reported that Philadelphia has one of the top emerging startup ecosystems in the United States, according to a new study from the Startup Genome. Although startups are often small enterprises, the role they play in economic growth is extensive. With new entrepreneurs come new ideas, new innovations and new competition for bigger corporations. 

 

While all startups have the ability to transform into a big business, there are many differences between the two. Along with having different visions for growth and sustainability, startups also tend to have a unique relationship with funding. Unlike a traditional business, startups often rely on capital from outside investors or venture capital firms. Running out of money is the second-most common reason for a startup’s failure. An estimated 29% of startups fold because they ran out of cash, according to CB Insights. With that being said, more and more entrepreneurs are opening up shop in Philadelphia because it has a diverse population, an urban atmosphere and most importantly affordable rents. 

“People who do tech startups in Philly still feel that giddy sense of wonder and magic that comes from starting something totally new. We don’t take it for granted. We still feel lucky and grateful to be doing what we’re doing. We’re scrappy. Philly tech is the way I imagine Silicon Valley must have been before the personal computer boom, the first internet boom, and the second internet boom made startup success feel like a foregone conclusion. In the Valley, most employees don’t remember those days. In America, we’re used to thinking of the East as the past and the West as the future. But when it comes to tech, the tables are turned. The Valley is experienced and satisfied. Philly is young and hungry,” Michael Idinopulos, a social business pioneer, wrote in a blog originally for PeopleLinx, now FRONTLINE Selling, and reposted on Robin Hood Ventures

Startups and small businesses are also a crucial part of Philadelphia’s economy. Startups have been proven to boost employment patterns, which leads to more job opportunities. In 2019, small businesses created 57,377 net jobs. Firms employing fewer than 20 employees experienced the largest gains, adding 34,585 jobs, according to Pennsylvania Small Business Economic Profile. Other than economic growth, startups also tend to revolutionize technology. Exyn Technologies, founded in 2014 by Nader Elm, is just one of the many startups using research to create technology designed to keep more people out of harm’s way. Exyn Technologies pioneers autonomous aerial robot systems to improve operational efficiencies and safety for data gathering in underground mining. 

“I think it is interesting as we are watching the use of drones following the emergence of COVID-19. A lot of companies have started testing and demonstrating the capability of using drones to disinfect public areas. I think that is super relevant and very important not only for this pandemic, but it also shows how the industry at large is adopting autonomous tech in all kinds of environments. Also, it is fascinating to think about autonomous inspections and data collection for heavy industry,” Joe Snodgrass, field engineer at Exyn Technologies, told My Dear Drone. 

 

A deeper look into how Philadelphia’s economy is recovering

A deeper look into how Philadelphia’s economy is recovering

By: Beatrice Silva

2 min read – Philadelphia is the seventh-largest metropolitan area in the United States. Its diverse population, affordable rents and urban atmosphere make it an ideal location for entrepreneurs to open up shop. So much so, that small businesses make up 99.7% of its economy, according to the U.S. Small Business Administration Office of Advocacy. The city was on a strong growth course before COVID-19. However, that all came tumbling down when all non-essential businesses were ordered to shut down in Pennsylvania on March 19. 

 

In an effort to limit the damage to the national economy, the federal government rolled out the Coronavirus Aid and Economic Security (CARES) Act on March 27. Part of the act, a loan called the Paycheck Protection Program, has played a particularly important role in Philadelphia’s recovery. The program set aside $349 billion for small business loans intended to help them stay afloat and keep their people employed during the pandemic. Within weeks, the federal aid was exhausted and small businesses were once again left with uncertainty. A second glimmer of economic hope presented itself  when Gov. Tom Wolf allowed Philadelphia to transition into the yellow phase of his recovery plan on June 5. Stay-at-home orders were lifted and in-person retail was again allowed. Despite rising coronavirus cases, most businesses were eager to open their doors under regulated CDC guidelines. 

Two weeks into Philadelphia’s reopening a new obstacle landed in the city’s lap. Some businesses experienced looting and vandalism due to nationwide protests in the wake of the killing of George Floyd, a black man who died after a Minneapolis police officer kneeled on his neck for nine minutes. On June 11, Philadelphia announced a new grant and loan program for small businesses affected by the COVID-19 shutdown and damages from recent lootings. The Restart PHl Loan Fund from the Philadelphia Industrial Development Corp. will be primarily for minority-owned businesses in low-income areas. The $3 million in loans to small businesses can cover costs for things like inventory, technology, staffing and employee training. Philadelphia also announced a $1.4 million “Restore and Reopen Program,” which will provide grants to independently-owned businesses that have suffered from property damage.

“These efforts are intended to provide equitable and immediate relief to ensure our small businesses can sustain themselves and return in a manner that allows them to thrive,” said Philadelphia Mayor Jim Kenney in a statement. 

It may be too early to tell how the region’s economy will fare as it heads into a post-COVID-19 landscape. However, there is one sector that is expected to thrive as a result of all of this. Now more than ever before technology has proven to be a vital aspect of everyday life. One key advantage the industry has is the ability to have its employees work remotely, unlike retail and food services. The tech sector could even play an essential role in igniting the reconstruction of the local economy, according to the Greater Philadelphia Economy League.

 

South Florida CBD Industry Welcomes New Regulatory Clarity

South Florida CBD Industry Welcomes New Regulatory Clarity

By: Sara Warden

2 min read January 2020 — The value of the CBD (cannabidiol) market is expected to surpass $20 billion globally by 2024 and Florida is taking steps to ensure it is well-positioned to take advantage of the market. But opening up a new industry to commercialization comes with teething problems and Palm Beach legislators may struggle to keep up.

 

 

 “We’re witnessing CBD maturing from a cannabis sub-category into a full-blown industry of its own,” said Roy Bingham, Co-Founder and CEO of BDS Analytics in a press release. “Our growth forecast for the CBD market, across all distribution channels, predicts a compound annual growth rate of 49 percent by 2024. This is a great opportunity for all involved, but it means the road ahead will include decisions that need to be informed by the best possible data.”

After CBD edibles were legalized in Canada in October 2019, companies selling these products are struggling to keep ahead of demand. But in Florida, it is legislators who are feeling the strain of regulating this new industry. Amendment 2 legalized CBD use for medical purposes in the state and the 2018 Farm Bill legalized hemp-based CBD products federally. But Florida state legislation previously did not differentiate between marijuana (which contains THC) and hemp (which contains mostly CBD), meaning CBD products are simultaneously legal and illegal in Florida.

But on July 1, 2019, a new law took effect that allowed authorities to regulate CBD and hemp use. “Prior to these rules being adopted and taking effect, we didn’t have regulatory authority,” cannabis director at Florida’s Department of Agriculture Holly Bell told The News Service. “Now we do, and we have that up and going so that we can make sure consumers are protected.”

As a result, Palm Beach’s CBD industry is picking up speed. As part of the regulation, companies selling CBD products must apply for a permit that costs $650 per year. There already are a number of companies in Palm Beach County, including Curaleaf, Earth Florida, Nutrition World and Trulieve.

Zach Bader, co-founder of the USA CBD Expo held the conference in Miami Beach in May last year and told the Miami Herald that the South Florida market is brimming with potential. “There is a really high concentration of retail stores here that are either selling the product or are very interested in learning more,” he said. “We are seeing this industry start to percolate. A year ago, it wasn’t where it is today.” 

Bader applauded the efforts of state authorities to regulate the industry. “Whether you’re in the CBD industry or manufacturing Cheerios, you can’t go out there and make health claims without clinical trials. That’s a standard,” he said.

The Department of Agriculture headed by Nikki Fried is providing workshops to try to eliminate the uncertainty and harness a promising industry for the state. “Having that opportunity and allowing entrepreneurs to do what they do and start the research aspects is my vision for the state of Florida,” she said at the first workshop in Broward County.

 

To learn more about our interviewees, visit:

https://bdsanalytics.com/

https://www.fdacs.gov/

https://curaleaf.com/

https://www.earthflorida.com/

https://nutritionw.com/category/cbd-oil/

https://www.trulieve.com/

https://usacbdexpo.com/

 

Banks increasing support for Philly’s growing small businesses sector

Banks increasing support for Philly’s growing small businesses sector

Writer: Yolanda Rivas

2 min read AUGUST 2019 — The economic environment in Philadelphia, with many world-class educational and healthcare institutions, a diverse population and affordable rents, represent an ideal space for entrepreneurs to start their small or medium-size businesses. At the heart of the small-business community is an industry that plays an essential role: banking.

 

Many Philadelphia banking leaders say they have seen increased demand for lending and other services from small businesses. “Philadelphia has long been home to successful small businesses, but in recent years the collaboration between the public, private and nonprofit sectors is spurring a new level of growth,” Robert Kane, market president at KeyBank, told Invest:. 

 

According to Kane, KeyBank ranks 13th among more than 1,800 SBA lenders nationally. In the last five years, the bank has loaned more than $1.13 billion to small businesses across its footprint.  

Similarly, Philadelphia is one of the largest portfolios in BB&T’s footprint for small business. In an interview with Invest:, Regional President Greater Delaware Valley/Lehigh Valley Region for BB&T Travis Rhodes explained that the number of small business clients the bank is serving in Philadelphia is disproportionately larger than any other market in BB&T’s footprint. As a result, it created the “Bank on Your Success” initiative, which is directed to this community. 

“This free financial knowledge program helps entrepreneurs begin to understand the value of an income statement, a balance sheet and other banking basics. When they begin to think about their kind of profitability, how to manage their short-term assets, receivables and inventory, this education is essential. That education is ultimately what prepares somebody to be able to withstand or to handle the next downturn, because it helps them understand the levers of a company,” Rhodes said. 

Some of the biggest challenges small businesses face are improving cash flow, reducing operating costs, improving financial wellness, balancing growth with quality and hiring and retaining talented employees. To help mitigate those challenges, Keybank has developed Key@Work, which is a comprehensive, no-cost employee financial wellness program. 

“We also have a program, Key4Women, that supports the financial progress of women in business. It’s a great program, offering mentorship opportunities, access to capital and professional development,” Kane said.  

The small-business sector also helps banks to maintain a local presence. “We have small-business relationship managers who know the people in the community and become the point of contact for growing their small-business loans. Business sales also come with a lot of deposits, and that’s been a very healthy growth vehicle for us over the last couple of years,” Rodger Levenson, CEO of WSFS Bank, said in an interview with Invest:. 

Small businesses also have a significant impact on Philadelphia’s employment. According to the Pew Charitable Trusts’ Philadelphia 2019: State of the City report, about 26% of private sector employees in the Philadelphia region worked in small businesses in 2017, a number that was typical for the comparison regions. Also, 17% of Philadelphia employees worked in firms with fewer than 19 employees, second-highest behind the Boston region.

“Small business continues to be the primary generator of jobs and economic activity, not just in Philadelphia but in our entire region. And we see significant growth in our small-business lending activity over the next few years,” Levenson said.  

 

To learn more about our interviewees, visit:

KeyBank: https://www.key.com/small-business/index.jsp 

BB&T: https://www.bbt.com/small-business.html 

WSFS Bank: https://www.wsfsbank.com/Small-Business