VCEDA seed grants sow small business growth

Adam Patterson knew if his fashion design company was going to thrive in his hometown of Big Stone Gap, he needed capital — and a new sewing machine.

“Mine was so old, it sewed crooked stitches,” says Patterson, founder of Jones-Hurst Designs.

Patterson received a $10,000 grant in September from a Virginia Coalfield Economic Development Authority program that has been a boon for entrepreneurs in a seven-county corner of Southwest Virginia. The money allowed him to buy a shiny new Husqvarna Viking Designer Epic 2 sewing machine, on which he sews custom-made clothing out of recycled denim. It also allowed him to move his business from weekly pop-up locations to a storefront.

Since launching in 2017, VCEDA’s Seed Capital Matching Fund has awarded $1.8 million to 194 startups, creating nearly 700 jobs in locally owned businesses across varying fields, including restaurants, coffee shops and businesses providing services like drone photography or leatherworking. Grants are geared to startups in manufacturing, alternative energy, information technology, construction trades and tourism.

“We felt like this was the missing component in economic development,” says Jonathan Belcher, VCEDA’s executive director. “There were no grant programs to spur small business growth in the region.”

More than 90% of the businesses survive their first two years, well above the national rate. 

The program’s economic impact has been notable. A 2021 study conducted by Virginia Tech researchers found that VCEDA’s first $1 million in local seed capital funding generated $34.2 million in economic impact. Additionally, the program delivered $9.4 million in wages.

Applicants for the grants first work with the Small Business Development Centers at Mountain Empire and Southwest Virginia community colleges to develop business plans, conduct market research and come up with matching funds in the form of cash, loans or equity. Individual grants are capped at $10,000.

When Henry Morris lost his job in wholesale food sales during the pandemic, he and his wife, Renee, used a $6,500 seed grant to open Henry’s Produce and Market in Duffield. The funding helped them purchase a walk-in refrigerated cooler where they store apples, peaches and other produce in bulk. The business has grown from one employee to six.

“We work six days a week, and they are long, hard days,” Renee Morris says. “I ask Henry all the time if he’d like to go back to his old job, and he says, ‘Not a chance.’”