Teams of University of Arkansas students make their presentations in rapid succession as I watch Matt Waller, dean of the Sam Walton College of Business. Waller smiles, nods and claps. His enthusiasm is contagious.
I’m in Adohi Hall on the UA’s Fayetteville campus, attending what’s known as Demo Day. The event is sponsored by the McMillon Innovation Studio, which serves as an innovation hub for students.
The studio’s mission, according to the university, is to “develop future leaders, entrepreneurs and innovators by cultivating their creative mindset and connecting them to opportunities to make real-world impact. Students in the studio are given access to valuable mentorship and resources, providing further support to cultivate their creative skills and empower them to deliver impact innovation.”
I’ve come to northwest Arkansas in an attempt to better understand the region’s thriving startup culture. I’m being hosted by the UA’s Office of Entrepreneurship and Innovation. I go first to its headquarters on West Mountain Street in downtown Fayetteville, the Brewer Family Entrepreneurship Hub.
The Hub, which opened in 2017, was once the offices of the Fayetteville Chamber of Commerce.
Students associated with the Hub have 24-hour access. The place even has its own signature coffee brand. I also visit Startup Village on Block Avenue, which has reservable desk and office space for faculty, student and alumni startups. Membership is free, and companies are selected through an annual membership application process.
The Office of Entrepreneurship and Innovation works closely with nearby Startup Junkie and the Fayetteville Public Library, forming an innovation corridor. Farther north, a Bentonville facility known as the Greenhouse supports entrepreneurs in the development of ideas in outdoor recreation, health care and software applications.
Waller, an internationally known expert in the area of supply chain management, began his UA career as a visiting assistant professor in 1994. He was named a full professor in 2007 and has been the Walton School dean since 2015. He says that when he was named dean, it was made clear to him that a key goal of the Walton School is to increase student innovation.
Also in attendance at Demo Day is Mike Malone, who began work in April as the UA’s vice chancellor for economic development. Few people are better connected in Arkansas than Malone. From 2006-16, he was president and CEO of the powerful Northwest Arkansas Council. In that role, he oversaw the creation of regional development strategies that have helped make northwest Arkansas one of the fast-growing areas of the country.
From 2016 until earlier this year, Malone was vice president for corporate and community affairs for Runway Group, formed by Sam Walton grandsons Tom and Steuart Walton to make direct investments in the areas of workforce development, talent attraction, business recruitment, outdoor recreation and philanthropy.
Malone earlier lived in Washington, D.C., and held staff positions at the White House, Federal Emergency Management Agency, U.S. Senate and U.S. House of Representatives.
“No one I know advocates for our state more effectively than Mike Malone, and he’s an excellent choice to implement the university’s bold vision to expand economic opportunity for all,” Steuart Walton says. “Mike’s impressive career has given him a breadth of experience that will no doubt strengthen relationships, energize partnerships and catalyze entrepreneurship and innovation that puts Arkansas at the top of the list for business and talent attraction.”
Malone will share oversight of the UA’s Institute for Integrative and Innovative Research (known as I3R) with John English, vice chancellor for research and innovation, and I3R executive director Ranu Jung. The institute was established following a $194.7 million gift from the Walton Family Charitable Support Foundation. That followed a $23.7 million grant from the foundation that was designed to bolster the university’s research and economic development infrastructure.
Late last month, the UA Board of Trustees approved a $137.6 million budget for the facility that will house I3R. Almost 30 faculty researchers will work across academic disciplines at the facility.
“While the university already has a large economic impact on our state, emerging opportunities like the establishment of I3R, enhanced support for startups and entrepreneurs, and growing partnerships with businesses and communities have us poised to see our economic impact grow considerably,” Malone says.
Entities reporting to Malone include the Office of Entrepreneurship and Innovation, the Office of Industry and Community Engagement, the World Trade Center Arkansas, and the UA’s Arkansas Small Business and Technology Development Center. Malone will work with businesses across the state to commercialize faculty and student research.
Another partner is the UA Technology Development Foundation, a nonprofit organization whose mission is to promote and grow a knowledge-based economy. It’s focused on development of the Arkansas Research and Technology Park, which has a campus of more than 100 acres in south Fayetteville.
An annual event that helps put northwest Arkansas on the map of entrepreneurs is the Heartland Challenge, held in April at Crystal Bridges Museum of American Art at Bentonville. Student teams come from across North America to participate, with the winning team receiving $100,000. The challenge awards $25,000 for second place, $10,000 for third place and $5,000 for fourth place.
Students gain experience and network with business leaders as they attempt to raise venture capital. They also become familiar with what’s happening in northwest Arkansas.
“We’ll be honest with you,” Sarah Goforth, executive director of the Office of Entrepreneurship and Innovation, told participants. “A major goal of the Heartland Challenge was achieved the minute you set foot in northwest Arkansas. … Between mountain biking trails and unparalleled outdoor amenities, world-class arts and culture venues, and a vibrant venture scene, our pocket of the Ozarks has a lot to offer.
“What’s less obvious until you’re here is the community of support you so quickly can find here, whether you’re a founder, a remote worker, a builder or a backer.”
The university plans to do an annual report known as Arkansas Capital Scan to identify capital resources available to businesses, identify gaps and list opportunities for programs and policies to attract business investment. The first such report found:
• With the onset of the pandemic, new business applications in Arkansas grew at a historic rate.
• The number of patent filings for new technologies is increasing, but entrepreneurs still report difficulty accessing sufficient seed capital.
• Venture capital investment in Arkansas companies lags significantly when compared with peer regions.
• While businesses in the life sciences received a larger share of angel/seed deals, venture capital dollars flowed to a diverse set of industries.
• 100 percent of the venture capital invested in Arkansas in 2020 went to companies founded by white males.
• Companies based in northwest Arkansas and the Little Rock metropolitan area received nearly all of the equity investments in the state.
• Banks are a significant source of commercial lending across Arkansas and dedicate a larger portion of their portfolios to such commercial loans than the national average. Credit unions in particular serve as an important liquidity channel for Arkansas small businesses.
According to a 2021 report from Innosphere Ventures: “The majority of venture capital is concentrated in just three states: California, Massachusetts and New York. Startups and entrepreneurs in northwest Arkansas and many regions in the heartland are often overlooked and underserved in terms of availability of capital.”
Rex Nelson is a senior editor at the Arkansas Democrat-Gazette.