Part of EPIcenter’s mission is to foster an energy innovation ecosystem in the Southeast. This includes making Georgia an attractive place for energy and cleantech-focused startup companies and helping them succeed. But that success does not depend on the founder’s creativity and stamina alone. A mix of public and private funding sources and access to entrepreneurial support organizations (ESOs) are just as important—which is where Paige Clayton’s expertise comes in.
“During my PhD training, I studied North Carolina’s Research Triangle Park—a rich ecosystem of biotech firms—to understand how ESOs and regional policies can promote innovation and entrepreneurship,” says Clayton, an assistant professor of city and regional planning who recently became an EPIcenter faculty affiliate. “Since energy is a sector targeted for growth in Georgia, I hope to help foster similar regional ecosystems and policies that support the success of energy firms.”
Clayton’s interest in startups has family roots: Both grandfathers were entrepreneurs, and one still ran his company at the age of 89. That, and studying technology transfer as an undergraduate researcher at Georgia Tech, spurred her interest in science and technology startups. After earning graduate degrees in public policy at the University of North Carolina, Chapel Hill, she returned to her hometown in 2020.
Startups are drivers of American innovation, whether they help develop fast Covid-19 tests or powerful electric vehicle batteries. All but 0.1% of U.S. businesses are small—with fewer than 500 employees—yet mighty: They account for 46.4% of private sector employment. And virtually all of today’s Fortune 500 companies once started small, notes Clayton.
Georgia’s historical startup strengths are in computing and engineering. Notable technology leaders trained at Georgia Tech, and Atlanta’s downtown hub includes Microsoft and Google. Although much of Georgia’s entrepreneurial activity is concentrated near Atlanta, several battery and electric vehicle makers have recently built large manufacturing centers around the state. This, says Clayton, will likely attract new energy and cleantech startups. She has developed a user-friendly data dashboard about the state’s support infrastructure to help founders connect with ESOs that fit their needs.
ESOs range from those focused exclusively on mentoring, financing or coworking spaces to incubators with a full suite of services: physical space and equipment, mentors, support staff and networking opportunities with private investors. Clayton’s in-depth analysis of the Research Triangle Park identified a significant benefit of standalone-mentoring ESOs: Firms who used them received more funding from public and private sources than non-mentored firms.
Georgia has a reputation of welcoming diverse entrepreneurs, including historically underrepresented groups. ESOs targeted to women or Black founders can be helpful at early stages of launching a startup, says Clayton. However, research has shown that women may find it more difficult than men to obtain private funding. Thus, it is important for targeted ESOs to connect founders to broader networks of venture capitalists.
Some ESOs result from entrepreneurial recycling: the decision of senior entrepreneurs to re-invest their capital, experience and networks into new endeavors after exiting their own firm. A perfect example is David Cummings, a serial entrepreneur who founded the Buckhead neighborhood’s Atlanta Tech Village. “The Village has become one of the country’s largest incubators and launched many successful companies,” says Clayton.
Another interest of Clayton’s are the two largest federal funding sources for entrepreneurs: the Small Business Innovation Research and Small Technology Transfer (SBIR/STTR) programs. Government support is especially important for early-stage startups that need to validate a high-risk technology before the private sector will invest. This non-equity funding allows founders to maintain ownership and control of their firm.
Interviews with entrepreneurs and scholarly evaluations have identified the slowness of the SBIR/STTR award process as an impediment. With a new grant, Clayton will analyze the role of accelerated funding for different technology sectors, business strategies and founder demographics. Understanding the nuanced impact of faster turnaround times on startup success will generate targeted practical advice for new founders. It will also inform discussions about state-level SBIR/STTR matching programs to support entrepreneurship and economic development.
While federal funding can be critical for early-stage startups, accelerators are designed to help more established founders scale their business. Thus, Clayton anticipates synergies with the new Cox Cleantech Accelerator, which provides capital, expertise and networking to grow Georgia’s cleantech firms.
“Many different people and organizations are committed to building out Georgia’s historical strengths in computing and engineering to the energy and cleantech sectors,” says Clayton. “I’m excited to contribute to that effort in my EPIcenter role and to apply what I’ve learned in North Carolina toward creating a world-class entrepreneurial ecosystem in Georgia and the larger Southeast.”
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Story Written by: Silke Schmidt
Priya Devarajan || Research Communications Program Manager