Gateway CEI Incubator Planning 500 New Jobs for Region

Officials with a new business incubator at GateWay Community College in central Phoenix say they hope to add nearly 500 jobs to the area within the next few years.

To accomplish that goal, they know they must carefully select businesses and startups with potential to grow and excel.

The Center for Entrepreneurial Innovation has 35 spaces available, but only two businesses have completed the center’s rigorous application process. The facility, which cost about $6 million to build, seeks to house and develop early-stage companies focused on biotechnology, clean technology, renewable energy, technology and software, and professional services.

“We provide a phenomenal amount of entrepreneurship service,” Executive Director Jeff Saville said. “All entrepreneurs see something shiny, and they will chase that for a while, but it’s our job to make sure they are staying focused.”

Phoenix has in interest in the development. The city contributed about $800,000 to the project — using 2006 voter-approved bond money — and it also helped leverage a $2 million grant from the Economic Development Administration, according to John Chan, Phoenix’s community and economic development director.

Chan said the city has targeted bio-life sciences and “young emerging enterprises” as industry sectors to focus on: “These sectors attract high-quality jobs and have high-growth potential.”

The Center for Entrepreneurial Innovation staff and mentors work closely with each of the budding businesses, both residential and affiliate. So far, only Voltmarc Technology Inc., a circuit tracing and monitoring research and development company, and Arbsource, a biotechnology company, have successfully signed on. An advisory board must approve all participating companies. Saville said they have about six more companies in the “pre-incubation queue.”

“I take pride in CEI being an incubator that advertises a high degree of selectivity,” Arbsource founder and CEO Mark Sholin said. “Resident companies have to have not only an excellent business model but also a strong network and sufficient financial traction to be able to support habitation at CEI.”

Arbsource, which deals with waste-water treatment in the food and beverage industry, was founded in August of last year. The company took up residence in the Center for Entrepreneurial Innovation in July, after leaving SkySong, the Arizona State University Scottsdale Innovation Center.Sholin decided the company had enough money to branch out and find a larger space with new networking opportunities.

“We went in with an open mind and had high expectations,” he said of the GateWay project. “CEI has the perfect mix of office space, lab facilities, mentoring, and business-development resources to complement what we have built so far with Arbsource.”

Along with its 35 spaces, the center offers the resources of 85 mentors whose clients, both residential and affiliate, can utilize, according to marketing assistant Monique Jones.

“We lean heavily on our mentors to really help us manage the clients and help the clients,” Saville said. Mentors dish advice and provide support in areas such as human resources, accounting, public relations, social media and day-to-day activities.

The center also provides furnished offices, eight equipped wet labs, shared conference rooms and break room, and equipment needed for day-to-day office activities.

Although companies lease the space on a year-to-year basis, the incubation program takes from two to five years.

Despite Arbsource leaving SkySong for the Phoenix-based project, Saville said the center collaborates with all incubators in the area. He called the relationship between the incubators a “neat ecosystem.”

The National Business Incubation Association estimates there are 7,000 business incubators in the world, and typically 87 percent of companies that graduate from such programs stay in business three years later.

“What we want to get out of this is opportunity to get in front of investors and to grow the business so that we can create jobs here in Arizona,” said Mark Mahoney,Voltmarc Technologies Inc. founder and inventor. “This is a huge asset to our business, it really is.”

Saville said the center pursues companies that have a business plan that can produce jobs, and helps foster companies that are not yet ready to join the program. Saville’s goal is to add 500 jobs to the Phoenix community in three to five years, but he has 10 years to accomplish that goal.

As the center grows, Saville said the GateWay Community College campus, near 40th and Washington streets, and surrounding area will become a hub for entrepreneurial activity.

The center had a small-scale opening in October and began accepting applications in March. Jones said they will host a grand opening in the spring, following the completion of the remaining construction in December.

“I’m just amazed at the opportunities out here,” Saville said. “I’m meeting some of the best startup companies I’ve seen in a long time.”

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Congratulations to Sanjay Dhole, Maricopa and Now Arizona State Star!

Sanjay Dhole is Technology Coordinator for the Maricopa SBDC in Phoenix, and recently awarded the Star Peformer Award by the Arizona SBDC Network in July in Prescott, Arizona. He will go on to the National level in September, and the Association of Small Business Development Centers will recognize him as an outstanding SBDC employee at its 32nd Annual Conference, Tuesday, September 11, 2012 in New Orleans. ASBDC State Stars are SBDC employees exhibiting exemplary performance, significant contribution to their state or regional SBDC program, and shows a strong commitment to small business. Congratulations to all of this year’s State Stars!

For the Facebook posting from ASBDC go to the following link…

Arizona Entrepreneurial Efforts Showing Results!

Arizona entrepreneurs are creating more jobs, making more money and are expressing more optimism about the future of the economy than counterparts in other markets, according to the Global Entrepreneur Indicator.
The GEI, an annual survey from the Alexandria, Va.-based nonprofit Entrepreneurs’ Organization, surveyed entrepreneurs around the world to measure their success and their predictions for the future.
Arizona entrepreneurs rated highly, surpassing their counterparts from across the globe.
In the past six months, 62 percent of Arizona entrepreneurs added full-time employees compared to the global average of 59 percent, according to the survey.
During that same time frame, 71 percent of local entrepreneurs reported an uptick in revenue. The global average was 68 percent.
Revenue wasn’t the only increase, either, with 60 percent of Arizona entrepreneurs reporting an increase in their businesses’ net profit, whereas only 16 percent reported a decrease over the past six months.
While there are conflicting indicators and data about whether or not the economy is on the mend, 41 percent of Arizona entrepreneurs are optimistic the U.S. economic environment will improve in the coming months.
Though fewer than half are optimistic about the economy’s future, 85 percent of local entrepreneurs said they would start a new business in the current economic climate, according to the EO survey.
The numbers back up the notion that Arizona is a great place to start and do business, said Jason Rush, chairman of Entrepreneurs’ Organization Arizona.
“There is a good environment for entrepreneurial companies in Arizona,” he said.
Rush said that many of the members of EO Arizona are not cutting back, but instead are expanding and hiring.
David Anderson, chair of the communications committee with EO Arizona, said the survey results indicate what everyone has been saying: small businesses are going to drive the economic recovery.
“It’s stronger in Arizona (because) this is a very predominant small to mid-size business market,” Anderson said. “What the EO survey represents is the economy is growing across all sectors.”
Because of Arizona’s dearth of larger companies, entrepreneurs are key to Arizona’s economy, said Max Hansen, CEO and co-founder of, a recruiting company which has experienced exponential growth in the past year.
“Since we don’t have many Fortune 500 businesses headquartered in Phoenix, I think the community has kind of thrived in small businesses, which in turn has started to develop new businesses and entrepreneurs,” Hansen said.
Hansen cited the burgeoning incubator scene in the Valley as one of the reasons why entrepreneurs fare so well in Arizona.
“Arizona is just an excellent place to start and launch a business,” Hansen said.
Rush said because Arizona’s population skews younger, it is natural there would be more entrepreneurial ventures and businesses in the state.
“It creates more opportunities for them to do new and different things,” he said.
Arizona offers access to the West Coast, has an attractive cost of labor, diversity of labor and some legislative actions that make Arizona attractive as a market, Anderson said.
Rush admits even with the strong numbers from this survey and stories from EO members, everything is not rosy economically in the state.
“I think things are starting to come back in different segments,” he said. “Is it perfect? No. Is there full access to capital that’s probably really needed? No. But it’s better than it was a couple years ago.”

5 questions to answer when planning your social-media greatness

Developing a social-media marketing strategy is much like developing a business plan; you must determine and understand what you want to do, and how you plan on doing it. And, like a business plan, your social-media strategy is essential in realizing success and effective results. Here are five questions that should be asked in the process of developing a strong plan.
1. What are your goals?
To start with, everyone on your team needs to be on the same page as to the reason for adding social-media marketing. What do you hope to get out of your efforts? Whether your goals are to spread brand visibility, drive website or in-store traffic, or increase sales, having a defined goal is essential in the development and direction of the rest of your plan.
2. Where will you be?
Social media is more than just Facebook and Twitter. While they are the current leaders in traffic and active members in the United States, they are by no means the only effective options. LinkedIn is steadily growing in popularity, and an excellent choice for B2B-focused companies. The location-based Foursquare, while a niche service, can be a wise addition for businesses that want to increase traffic in bricks-and-mortar locations. Pinterest is another possibility with a lot of potential for the right industries.
3. Who will be in charge?
Many companies and professionals go into the planning process under the mistaken impression that social-media marketing is a simple hands-off, set-it-and-forget-it process. While there are some helpful tools that can automate portions of a social-media plan, success requires requires a substantial amount of time and energy. From planning and creating content to monitoring results and interacting with followers, social-media marketing can be time consuming. Figure out who in your company will have the time and resources to lead the effort or the social-media team, if you have one.
4. How will you implement your strategy?
Launching a social-media campaign with the vague plan of “posting things” is a common rookie mistake, and one that often leads to frustration and failure. Determine what type of content you plan on posting, which tools you will use to manage your social-media sites, and at least a rough initial posting schedule that can be updated and tweaked as needed.
5. How will you measure success?
Social-media managers must be prepared to show higher-ups how social media is performing, and why it’s worth continued allocation of resources. How you will measure success ties back into the overall goals that were determined and agreed upon. Decide ahead of time what metrics will be monitored and recorded to track success and show the value of your social media marketing efforts.

Seedspot Incubator Chosen for Startup USA Arizona site

Startup America Partnership will launch an Arizona chapter this fall, bringing to the state more resources and relationships to keep Arizona’s talented entrepreneurs at home to create local jobs.

The new chapter, to be called Startup Arizona, will look to accelerate the growth and recognize the talents of local startups with a series of local events, resources and peer mentoring programs at the business, college and high school levels.

Startup America Partnership is a national movement that seeks to connect the country’s startups with resources and expertise they need to grow.

“We’ve had our eye on Arizona for quite some time,” said Startup America Partnership CEO and co-founder of, Scott Case. “There has been a lot of activity coming out of this region and we’ve been waiting for the right team to come in and really put fire behind the Startup America mission and join the now 27 startup regions across the country.”

Startup Arizona will provide a variety of support services to support any stage of a new business. The region intends to focus on socially conscious ventures that create positive impact in the world and counsel established business on how they can be more socially conscious.

“We also have a strong desire to energize local high schools with entrepreneurial mentoring programs in an effort to spark creativity at an early age,” said Brandon Clarke, who helped bring Startup America Partnership to Arizona.

Local incubator Seed Spot will serve as the anchor for the Startup Arizona chapter.

“Seed Spot is proud to serve as the anchor for the Startup Arizona movement and help build an ecosystem that supports entrepreneurs that are focused on more than sheer profit,” said Courtney Klein Johnson, co-founder of Seed Spot.

Startup Arizona’s official launch will coincide with the launch of Seed Spot this fall at a special event held at the incubator’s new headquarters at the corner of 24th and Washington streets in Phoenix. The event is scheduled for Oct. 4. Phoenix Mayor Greg Stanton and Startup America CEO Scott Case are expected to attend.

Startup America Partnership launched on the steps of the White House in 2011. Its mission is to provide startups access to the corporations, investors, and services they need to grow. It brings together startups and local champions from around the country focused on creating successful networks for young high-growth companies to thrive. AOL co-founder Steve Case (no relation to Scott Case) chairs the Partnership and the Kaufman and Case foundations are its founding partners

Crowdfunding Taxable? Really?

The goal: $950,000. Instead, when the campaign ended August 8, so many gamers and game developers had pledged $99 (or more) to get the new Android-based Ouya that the company raised $8.6 million, making it one of the biggest crowdfunding success stories ever.

“We’ve been in the public consciousness for only 30 days, and we sold over 60,000 boxes,” Uhrman says. “There’s a good audience (on Kickstarter) for the product we’re trying to build, and it allowed us to move very quickly.”

But one important thing has been overlooked: taxes.

“We’ve been talking about that, but we have been so busy,” she says. “Luckily, we have good accountants, so they’ll sort it out for us.”


Crowdfunding on sites like Kickstarter or Indiegogo Inc is a relatively new way to raise funds. It allows an entrepreneur to get proceeds for a specific project, often offering “rewards” to those who pledge.

When Kickstarter began in 2009, crowdfunding was largely used by musicians, film makers and other creative types to raise small sums of money for projects that might not make any money. But as it’s grown — in some cases, becoming an alternative to venture capital — the dollars involved have gotten bigger.

Ouya is one of eight campaigns to raise at least $1 million on Kickstarter. All told, Kickstarter backers have pledged more than $300 million since its launch, while competitors like Indiegogo have also grown rapidly.

“Crowdsourcing is becoming a popular way for start-ups to raise cash, and the companies that receive the cash may not realize the proceeds are taxable,” says Murray Solomon, a tax partner at accounting firm EisnerAmper. “They may get a very unpleasant surprise when they build all their prototypes and spend all the money.”

In fact, if you raise more than $20,000 on Kickstarter from more than 200 people, you’ll get a Form 1099-K (a new tax form introduced in 2011 and required for third-party payments above that threshold), courtesy of Amazon Payments, which processes transactions for the site.

Indiegogo, which allows pledges by PayPal or credit card, notes in its agreement that users “shall have full responsibility for applicable taxes” on their projects’ funding. (Kickstarter and Indiegogo both declined to discuss tax issues.)


If you’re planning to crowdfund, here’s what you need to know.

If it’s a sale, it’s taxable.

Say, for example, a startup uses a crowdfunding site to raise money to develop a new iPhone accessory, and offers “rewards” — as these campaigns typically do — of those accessories in various combinations for different pledged amounts.

“That’s the most common situation, and it’s taxable because you get something in return,” says EisnerAmper’s Solomon.

Even funds below the 1099-K reporting threshold remain taxable, says Solomon.

This spring, Pizza Delicious, a New York-style pizza place in New Orleans, raised $18,300 on Kickstarter for a new pizza oven, offering pizzas, bumper stickers and T-shirts to those who pledged.

“We thought it would be a cool way to get people excited and drum up support for projects,” says co-owner Greg Augarten. “It’s taxed like any other income, but it’s still worth it.”

Just because the funds are taxable, though, doesn’t mean you’ll actually owe tax on them. If your business expenses are higher than the money you bring in, you may not owe anything.

Michael Guenther, a certified public accountant in Sacramento, who works with video game companies and has three Kickstarter clients, says most such startups would not owe tax in the first year because of the combination of business costs and tax benefits, such as the research and development tax credit.

“Most Kickstarter companies would use nearly 100 percent of their Kickstarter funds to build whatever it is they’re looking to build,” he says.

That’s generally the case for musicians and other creative types raising small sums for specific projects.

Ken Thomson, a Brooklyn-based composer and saxophonist, raised $2,665 last December for a new album. Most of his 89 backers paid $25 and will get the CD when it’s done.

“It casts a wider net, and we were able to get more pre-orders,” Thomson says.

But the idea that he’ll owe taxes after spending at least $10,000 to produce the CD makes Thomson laugh. He figures he won’t owe taxes since he expects his expenses to dwarf the money he raised.

“I dumped the entire amount of money I got from Kickstarter into the studio, and then I have to figure out how to give everyone CDs,” he says. “When you make a record, you assume you are going to lose money on it.”


There are situations in which crowdfunded pledges may not be taxable. Some may be considered gifts, others donations. Once the JOBS Act, which allows startups to solicit investors online as a way to encourage funding of small businesses, takes effect, some contributions may be considered “capital contributions,” and not taxable when they’re received.

In general, a gift is a contribution in which the giver gets nothing in return. Gifts are not taxable to the recipient, and gift givers are allowed $13,000 a year per recipient tax-free. A recent do-gooder campaign on Indiegogo raised more than $700,000 for a bullied school bus monitor to take a vacation.

“That’s the perfect example of what would be a gift,” EisnerAmper’s Solomon says.

Charitable donations, to a registered 501c3, are another exception. Donations may be both tax-free to the non-profit and tax-deductible to the donor.

With crowdfunding still a niche business, accountants are puzzling over the lines between different tax situations. As EisnerAmper’s Solomon puts it: “I think it’s so new that there are going to be some gray areas.”

(This story in 8th paragraph, corrects description of eight $1 million-plus efforts to campaigns, because they were not all start-ups.)

(Editing by Chelsea Emery and Dan Grebler)

Use Stories to emphasize your small business Brand

Stories are like verbal DNA. They are the tiny packets of information upon which teams, enterprises, and societies have always been built. And they’re important for everyone from big companies, to small business, to startups. Why? Because stories are the most powerful tools human beings have ever developed for expressing their values and getting others to share and act upon them.

Shout facts or commands at someone and be ignored, especially if you’re a small-business owner or entrepreneur. Tell them a compelling story that encourages them to share your values and you begin to create a powerful sense of “Us.” A sense of “Us” is exactly what managers need to get teams to accomplish amazing things. It converts customers into evangelists with your logo tattooed on their arms. It turns investors in champions for your success. It’s no wonder Plato declared a few millennia ago, “Those who tell the stories rule society.” They also rule the world of business.

Telling stories sounds simple right? It once was, but after a century of increasing industry jargon, reliance on facts and data, and broadcast media that guaranteed audience attention, our storytelling muscles have atrophied. The most powerful communication tool in human history has been left to rust on the shelf.

As information noise and clamor continue to get worse, it seems we are all waking up at the exact same moment and deciding we’d better try something new (or old for that matter). So, it seems that stories are back in style in boardrooms, in creative agencies, and even on the presidential campaign trail.

Of course, mastering a complex and ancient art isn’t just a matter of following a rote formula, but there are simple ways we can all start using storytelling to sell ourselves, our products, and our causes.

The first step on the journey to storytelling mastery is to confront the old ways of communicating that simply don’t work anymore—and probably never will again. The age of broadcast and top-down communications taught us a lot of bad habits that kill our chances to tell a good story. These habits can be broken down into communicators’ “Deadly Sins.” Repent from these and you’ll have a clean slate with which to set out on step two—creating stories that truly resonate.

The sin of vanity:

The great storytellers of the past never told us how great they were. The best stories reminded us of how great we could be. That’s the heart of The Hero’s Journey, by Joseph Campbell, the single template for all great stories across all times. Stories remind us we can be heroes. Today, most of us stand up in front of our teams or customers and tout our accomplishments, our credentials, and our benefits. It’s time to face the facts: Narcissists just aren’t very engaging storytellers.

The sin of authority:

Stories are persuasion tools that capture our imaginations and stir us emotionally. They do what stats and data simply can’t. Still, most of us instinctively rely on building up our own expertise, laying out a case for our ideas or brands with a string of seemingly undeniable facts only to hear the crickets chirp in reply. Why? Because our audiences have come to see facts as bendable—the experts from scientists to Supreme Court justices have an agenda these days. Storytellers, on the other hand, focus on truths based on values and aspirations, bringing in the data as support, not the main attraction.

The sin of puffery:

There was a time when a detached, booming voice of a corporation could order audiences around. Think of those old Cadillac ads: “There’s never been a better time to buy, so hurry in!” Today, audiences demand a human voice from those that inspire them to action. Blogs and Twitter have made us expect an inside view to the humanity of those behind the businesses we love. Embrace your human voice or watch your stories flop as you tell them in the detached voice of God.

Wait, no touting of accomplishments and features? No leading with facts and figures? No ordering people to action? What’s left?

Just ask the people at Chipotle (NYSE: CMG), who have built an iconic story-based brand and one of the fastest growing fast food chains in the world. Their strategy reflects the markers of all great stories—and you can see that strategy expressed in two moving and wildly viral minutes here.

Audiences love this video and the whole Chipotle story-based brand because every communication from them is:


Stories matter to us because they are based on human-scale characters we can root for or oppose.

Next time you want to lead your team or customers to action, put down the facts and claims and embody your message in a core character your audience will see as role models. Hint: this lead character should not be you. Note how the Chipotle van only appears at the very end of the hero’s journey.


Stories elevate emotional engagement to the level of, and often beyond, intellectual understanding.

When we connect with our audiences on the level of deeply held values, we instantly create emotional resonance. Chipotle connects with audiences’ desire for “food with integrity”—integrity-filled treatment of people, animals, and the planet. Ask what deeply held values your enterprise shares with its audiences—then put them at the center of your stories.


Stories allow people to feel that they have experienced things that they have only seen or heard. We learn something when we hear them.

Get clear on the “moral of your story” before you tell it, then put that moral at the center of every story you share as a leader or as a brand. Through this, you’ll find consistency and your rich human voice.

Of course, we have only scratched the surface here. But there is a rich and exciting journey ahead, a world of endless challenges and possibilities, for any business leader or entrepreneur who wishes to tell stories. The best will build enterprises that rule the future.

Jonah Sachs is the cofounder and chief executive officer of Free Range Studios. He is the author of Winning the Story Wars: Why Those Who Tell (and Live) the Best Stories Will Rule the Future (Harvard Business Review Press, 2012).