A New Idea for Growing Start-Ups in Rust Belt Cities
On a quiet, leafy street in Lansing, Michigan, just off one of the town's main drags, we found The Center for New Enterprise Opportunity (NEO for short), a new start-up incubator in Lansing. Bootstrapped for $10,000 with the help of local builder Kincaid Henry Building Group and the Ingham County Land Bank, their recently renovated building is home to 18 companies that NEO hopes mature into sustainable companies that stick around the city.
After all, that is what Tom Stewart, one of the managing partners of NEO and our main tour guide, did. He's a local guy who really wants to help the community he was raised in. Let's just say that helping the city of Menlo Park is not what is on the minds of most Silicon Valley tech types.
That's why NEO incorporated as an unconventional organization type, the L3C, or low-profit corporation. L3Cs can only exist in Illinois, Louisiana, Maine, Michigan, North Carolina, Rhode Island, Utah, Vermont, and Wyoming. Practically, they provide the legal structure for companies to accept some donations from foundations tax-free, while also making some money. More conceptually, L3Cs are a legal vehicle for officially enshrining social good into a corporation's charter. It's fair to say that they are at the cutting edge of socially responsible business practices.
What is most impressive about NEO is the long view its founders take. They want to build businesses that are going to last, not to line their pockets, but to build their city. It's an impressively forward-looking approach to making Lansing better. Despite its role as the state capital and the presence of Michigan State University next door in East Lansing, Lansing proper has had a falling population since about 1970, though not nearly as precipitously as Detroit to the east. Though the outflow of people has slowed, the city continues to struggle with an image problem.
And man, if you're a Bay Area resident, you can't help but see the possibilities of the town. Right near a major research university, you can buy a fixer-upper for less than $15,000. Yes, you read that correctly. Not $1,500,000 or even $150,000, but $15,000. I'm pretty sure that's about three months of rent in the Mission these days.
This post originally appeared on The Atlantic.