From rural roots: Supporting rural entrepreneurship for over three decades

Rural communities are the backbone of our region. Unfortunately, they are often left behind when it comes to economic development. The lack of resources, infrastructure, and access to capital can make it difficult for small businesses to thrive there.

That’s why for over three decades, the Entrepreneur Fund has been committed to supporting rural entrepreneurs by providing access to flexible financing paired with business advising.

Born out of a need to diversify industry on the Iron Range in the late 1980’s and early 90’s, EFund emerged with two main priorities: support entrepreneurs to start and grow small businesses that would create steady incomes for themselves and others, and to renew the entrepreneurial culture in the region.

“We had pretty much evolved into a company town atmosphere with large employers and lots of employees and less, and less small business growth,” said Mary Mathews, co-founder of the Entrepreneur Fund.

From the beginning, Mathews and co-founder Nick Smith saw the need for the local people to create and sustain their local economy. Whether it was starting a restaurant, offering a needed service, or turning a side business into an economic opportunity, the small EFund team found a way to help small businesses get off the ground.

“Every business starts with one person,” said Mathews. “They start with somebody who has an idea or a better way of doing something. So, by increasing the number of people who start a business and by making it possible for them to grow, it just increases the economic vitality.”

Today, we stay true to those rural roots. In 2022, over 60% of our clients live and own businesses located in a rural community, which in our region excludes the populations of Duluth/Superior and St. Cloud. Of the $24.5 million in lending last year, $13 million went to rural businesses. Our advisors spent over 6,000 hours with rural business owners in 2022, going over cash flow projections, building strategic plans and much more.

“Just about everywhere you go, there's businesses that the organization has touched at some point in the region."

Mary Mathews, Co-founder and first CEO of the Entrepreneur Fund

Entrepreneurial development in northern Minnesota

Almost everything EFund did in those early years was counter to traditional economic development strategies in the region. At the time several micro-enterprise organizations across the country were deciding to either focus on training or focus on lending, but EFund was committed to doing both.

Mathews and her team realized that the business education and training they provided was critical to their clients’ success. But without the financing, many didn’t get the opportunity to launch because they didn’t qualify for traditional business loans.

“We found that the businesses that were most successful, were the ones who had accessed both our training and our financing,” said Mathews. “We developed a relationship with those business owners. We stuck with them, they stuck with us, and we were both invested in their success.”

Mathews said it didn’t take long for them to start hearing stories about business owners who were encouraging and helping friends and family members start businesses. Those business owners began to be more involved in their communities by chamber organizations, running for office and just overall having more of a say in what was happening in their communities.

“It was extraordinary to see those things happening,” she said.

Why is rural entrepreneurship important?

 Rural entrepreneurs play an important role in their communities. They power the local economy by providing services and products that are sometimes difficult to find otherwise. They create quality jobs that sustain a vibrant place to live, work and raise a family. But with limited resources and opportunities, they often struggle to access the same resources that urban-based businesses take for granted.

“Rural businesses are typically severely underbanked, and there is also a lack of services. Providing accessible capital and services for small business to sustain and grow is critical to the health of rural communities and the economy,” said Shawn Wellnitz, current CEO of the Entrepreneur Fund.

Small businesses in rural communities often lead the way in terms of ideas and innovation—incorporating new technologies, creating unique partnerships with other businesses in the area, and becoming self-sustaining while also serving as cornerstones of their communities. Mathews saw that back in the early 90’s and she still sees it today.

“To see the ongoing commitment to entrepreneurs, and to really creating an entrepreneurial culture in northern Minnesota and northwestern Wisconsin, I am so proud that the mission that we envisioned in 1989 still is as true today as it was back then,” said Mathews. “So, for the next 30 years, I think there is no there's no reason why the Entrepreneur Fund wouldn't continue with the same kind of commitment.”

Wellnitz credits Mathews for her vision over 30 years ago.

“Mary was a trailblazer on a lot of fronts,” he said. “She was one of the very first to recognize the importance of creating an entrepreneurial ecosystem, and the impact of pairing lending with services. Her heart has always been centered around serving rural communities, and we’re proud to honor her legacy by never letting that rural focus fade from our mission.”

Learn more about our impact on rural entrepreneurship in Minnesota and Wisconsin and our commitment to serving small business owners in our 2022 Impact Snapshot.