Big Potential in Little Rock
You can be forgiven for thinking that angel investing is a coastal phenomenon. As we’ve observed, the Bay Area still receives as much as 40 percent of the country’s venture capital, with Boston, New York, Los Angeles, San Diego and Seattle collectively receiving around another 34 percent. So where does this leave the rest of the country? Have politicians been wrong in touting small town “Main Street” as the beating heart of America’s economy?
Not so, argues Jordan Carlisle, Director of Entrepreneurship and Innovation at the Little Rock Regional Chamber of Commerce in Arkansas. On the contrary, the charms of a smaller, tight-knit market may offer an alternative to a tech investment sector that has become both larger and more impersonal. If any city is well positioned to combine the community of heartland America with the economic vitality of entrepreneurship, it’s Little Rock.
Though commonly overlooked, Little Rock is accustomed to punching far above its weight. It is where Wal-Mart found some of its first investors and it is home to Acxiom, a marketing tech firm that Carlisle and others call, “the largest company you’ve never heard of.” Combined with telecom company Alltel prior to its final acquisition in 2013, Acxiom was a powerful nucleus for tech expertise and networks around Little Rock. It was not until recently, however, that talent from these giants began to truly spur entrepreneurship.
“Our attitude has substantively changed in the last few years,” Carlisle explains, “The mindset used to be that innovation happened on the coast, that we were lucky to have manufacturing.” Today, things are far different, with more resources for entrepreneurs and a truly magnificent urban revitalization. Some such resources include the ARK Challenge, an accelerator that was established in 2011 that’s now a major catalyst in Little Rock, as well as the Venture Center, an entrepreneurial membership organization formed in 2014, which Carlisle helps lead.
“Before, we asked, ‘should I move out of Arkansas?’ Now I feel that there’s a collective of great talent saying ‘let’s stay here’.” This change in attitude has led to a considerable gain in entrepreneurial momentum, spurred by the rapid beautification of downtown Little Rock, specifically the construction of the Clinton Presidential Center. Carlisle notes that, “for folks who have lived here and started out at Alltel or Acxiom when you couldn’t walk around downtown, the change has been incredible.”
Still, several challenges remain for aspiring founders in Little Rock. Despite a strong tradition of running small businesses and bootstrapping, entrepreneurs still need the networks and expertise that seasoned investors can bring. “If there are folks who are leaving Acxiom or Alltel and they have systems experience, they’ll still need help on how to develop the actual technology, which requires connections to engineering talent outside Arkansas,” Carlisle elaborates. Little Rock is overlooked, and thus lacks the resources, both financial and human, that are available in larger cities. Entrepreneurs can bridge this gap with expertise, networking and guidance, but doing so requires a more concerted effort than in Silicon Valley or New York, where entrepreneurship is more deeply rooted.
For angels who are willing to play the roles of “sounding board, mentor and network,” the potential for a big win is high indeed. In addition to a longstanding finance industry on the cusp of overcoming the uncertainty of tech investment, Little Rock is also renowned for its health care, meaning tech entrepreneurship in that sector is an area to watch. Clearly, the transformation of Little Rock into a unique tech hub will clearly continue well into the future, with plans for the Technology Park and Creative Corridor scheduled to break ground next year. Their location? Where else but Main Street?