Entrepreneurship hub

economic-dictionary

The entrepreneurship hub is a place where highly qualified professionals and investors with great wealth come into contact. The goal is to develop innovative companies.

One of the advantages of entrepreneurship hubs is that they house brilliant minds capable of designing promising startups. These, in turn, may seek the support of investors who operate in the same area or nearby places.

At this point, it should be clarified that startups are distinguished by offering very rapid growth if they achieve success. Thus, not every innovative idea qualifies in this category.

A classic example of a startup is Facebook. His business model was always exponential. This, because the social network can gain users without the need to increase its staff.

Social entrepreneurship

Characteristics of the entrepreneurship hub

Among the characteristics of the entrepreneurship hub are:

  • It allows the formation of a community of creatives.
  • The hub can grow to the point of becoming a region recognized as a hub for entrepreneurship. A clear example is Silicon Valley in California.
  • A key element for the hub to work is the presence of angel investors. These are wealthy individuals who are willing to bet on talented professionals with good ideas. Although not all the initiatives they sponsor prosper, when they do, they pay off high profits.
  • The hub does not need to offer special benefits such as low taxes. The great advantage of these locations is access to a network of contacts.
  • Just as a hub can grow significantly, it can also be abandoned at some point for various reasons: the appearance of another innovation center, the increase in the cost of living, new laws for hiring personnel, among others.

Entrepreneurship hub example: Silicon Valley

The most emblematic example of an entrepreneurship hub is the Santa Clara Valley in California, one of the richest areas in the world. This region is popularly known as Silicon Valley, a name used since the 1970s for the existence of microchip and semiconductor factories made of silicon.

California is one of the states with the highest tax burden in the US However, there have been a series of circumstances over time that led to the emergence and consolidation of a powerful hub.

The origin of Silicon Valley as an entrepreneurship hub

It all started in 1959 in Mountain View, a city located in Santa Clara County. Fairchild was born there, the first company financed entirely with a venture capital fund. The firm was founded by eight young former employees of the Shockley Semiconductor Laboratory company.

The venture of this group, known as the eight traitors, was solved by Lawrence Rockefeller and other wealthy people whom he convinced. Following this highly profitable investment, the Rockefeller family founded Venrock Associates, one of the first venture capital funds. Thus, they established their headquarters in Palo Alto, another city in the Santa Clara Valley.

To these facts we must add the human capital trained at the prestigious Stanford University, also located in California. Such professionals can then easily be incorporated into Silicon Valley.

In short, the Santa Clara Valley meets all the conditions of an entrepreneurship hub: high-level workforce, investors with little aversion to risk and creative minds.

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