During her career in the finance world, Irene Hsieh has worked with a full spectrum of funding — from early stage funding to corporate debt and equity to highly structured asset-backed financings.
So when Fresno, the fifth largest city in California, recognized the need for funding to help fuel a movement in startups and the broader business community, Hsieh’s extensive experience proved to be critical.
Some context about Fresno: more than 500,000 people live and work in the economic center of California’s sprawling San Joaquin Valley. It’s known as the breadbasket of California because of its agricultural diversity and high production levels. In many ways, Fresno exemplifies agricultural hubs across the country.
Although Fresno provides the ideal environment for entrepreneurs seeking to pioneer innovations in agricultural technology, clean tech, and food tech, it’s been difficult to attract the same types of capital investments that readily fly around in Silicon Valley.
That’s why Fresno came to FUSE Corps. Though government agencies may have access to funding to take on these kinds of issues, what FUSE adds is the capacity of an executive-level, entrepreneurial changemaker with private-sector experience to the equation, someone who can design a strategy that meets public sector rules and expectations. That, paired with the urgency of a year-long deadline, goes a long way in getting traction.
As a FUSE fellow, part of Hsieh’s mandate included finding a way to catalyze public-private financing for the startup community. Startups, especially in regions that need to diversify to stay competitive, have the potential to jumpstart the economy with new jobs, and to revitalize downtowns.
UNDERSTANDING THE LANDSCAPE
Hsieh’s first task: to understand Fresno. Who were the major players? What were the barriers to entry? What business or cultural shifts would need to happen for an endeavor like this to succeed?
Over the course of months, Hsieh met with a cross-section of government, academic, nonprofit, and for-profit stakeholders, including entrepreneurs, funders, and service providers. As a newcomer to Fresno, most of Hsieh’s initial meetings were with individual people and organizations, but once she was able to glean the landscape of local business and political dynamics, she was able to convene different parties she knew could work well together. What’s more, with her deep private-sector experience, she knew the terms and conditions that would attract private-sector attention, and was able to leverage that knowledge.
During her fellowship, being part of the Mayor’s office helped to open doors to many
conversations, and people were willing to respond to Hsieh. FUSE Fellows are positioned to draw the best from both worlds: to external stakeholders, they represent a senior-level executive, which gives them access to people that a typical hired consultant often struggle to secure. And as individual independent consultants, they can maneuver around government more easily and apply private sector thinking and techniques as appropriate.
To bring each of the stakeholders into the conversation, Hsieh drew on her experience from both the private and public sectors to convey the value proposition in a way each party could understand.
“I tried to ‘walk the talk,’ so people could see my genuine enthusiasm for the work, and how committed I was to make it happen,’” Hsieh says. “I strive to be transparent about how I was doing things, which I have learned is a key ingredient to building trust.” [Read more about her tactics here.]
What she found was that, although startups in Fresno had lots of test data attesting to the merits of their ideas and were relatively careful in managing costs, there were real challenges in attracting capital. Value propositions were not being clearly articulated in ways that funders could appreciate. Entrepreneurs needed help with identifying paths to scale up, understanding the financial impact of their business decisions, or developing a structured marketing strategy.
DESIGNING SYSTEMS IN PLACE
Hsieh decided to focus her efforts on implementing startup models for what she called the Fresno Advantage: manufacturing, technology, agriculture, water, energy, food and related production services. Hsieh then developed a framework based on each stage of a startup and what type of funding would be needed to advance from one phase to the next — from company formation to developing minimum viable products, to scaling up — and then worked with local stakeholders to develop and implement a specific strategy.
To get traction, Hsieh did what she thought was most appropriate to be effective, without reinventing the wheel. She identified organizations that already existed, had “good bones,” and exemplary leaders, those with private sector experience.
Hsieh also identified the most effective and appropriate tools to fill in gaps. She researched different models that applied to early-stage startups and had a consistent, substantive track record of successfully helping entrepreneurs secure financing. And all along the way, she made her stakeholders partners in the vision and strategy development process, so they understood the whys and hows of her strategy, and to empower them to keep the momentum going after the end of her fellowship.
This is where her background in finance was critical. Hsieh, who advises entrepreneurs and teaches workshops that demystify startup financing, has experience across a range of industries including banking, manufacturing, energy, and clean-tech. Her background and expertise helped provide structure and form to Fresno’s nascent entrepreneurial community.
An example was Hsieh’s work with building out the program at Fresno State’s, Water, Energy, and agriculture Technology (“WET”) Center. The value proposition: to accelerate the commercialization of WET technologies by developing, testing, and scaling, just as any startup in Silicon Valley would. She secured a partnership with Village Capital, a global startup accelerator and seed fund. And to build momentum for the effort, Hsieh helped open up a portal for national interest in Fresno for agricultural technology startups by securing Fresno’s position as one of 16 inaugural cities selected for a national initiative launched by Village Capital, the Kauffman Foundation, the Sorenson Impact Center, and Rise of the Rest (established by Steve Case, AOL co-founder and architect of Present Obama’s Startup America Partnership.) This offered Fresno a deep network of relevant funders including the government, user groups, and investors. And just as importantly, Hsieh identified key factors that would help build community, develop customers, and secure funding.
To help ensure sustainable traction, she was instrumental in elevating the stakeholder relationships she had built to structure the funding proposal that secured $500,000 in funding to cover the cost of launching an ag tech startup accelerator for the WET Center – a federal government innovation grant that Fresno had been unable to secure in prior years. In fact, it was the first startup accelerator in the San Joaquin Valley, and the first in the Central Valley, excluding Sacramento and Salinas.
In short, she found a way to tell the story of entrepreneurs in Fresno and the greater San Joaquin Valley to attract funders and fuel the momentum of the local startup and broader business community.