TMCnet News
Start-Ups Get a Boost with a Flurry of New Support [St. Louis Commerce Magazine (MO)](St. Louis Commerce Magazine (MO) Via Acquire Media NewsEdge) Several companies and organizations in St. Louis are seeking to boost the region's entrepreneurship through a variety of new recruiting, education and grant opportunities. "St. Louis is seeing a coming together of government, non-governmental organizations and private sponsors to fuel the growth of start-ups here. They're creating a space where the average person can safely try out a new business or product idea without having to find all the resources themselves," says Jody Shelton, project coordinator-new ventures and capital formation at the RCGA. "When organizations across the board work together, it allows for economies of scale and creates an environment where all can benefit." Employment is growing in the smaller sectors of the business market. In the period 2004-2009, 570,000 St. Louisans were employed in firms with fewer than 100 employees and 168,000 were self-employed entrepreneurs, according to the Bureau of Labor Statistics. Combined, that reflects nearly half of the workforce in the St. Louis region. By supporting the growth of these smaller companies, these figures are sure to continue increasing, business advocates say. Here's a rundown of some of the newest entrepreneurship-catalyzing efforts across the region. Capital Innovators Capital Innovators awards 12 weeks of mentorship and $50,000 for early stage tech start-ups in return for a small stake in the company. They only work with five companies at a time, providing them mentorship, helping them hone their business model and pitch to increase their chances of success in receiving additional funding. "Our goal is to provide start-ups with the capital they need while providing the services necessary to get a company off the ground free or at a significantly reduced cost," Judy Sindecuse, CEO/managing partner, says. Their program is offered twice a year and recipients are decided through an application process. The goal is to bring lasting entrepreneurship to St. Louis. Word of what they are doing is spreading, with 30 percent of applications coming from outside of St. Louis during the last round. Sindecuse is encouraged by the collaboration and support among the start-up community. "We've all figured out that the best way for us to do this is to work together." Arch Grants To stimulate a start-up culture in St. Louis, Arch Grants holds a business plan competition in which winners receive $50,000 in grants in addition to mentor support, affordable office space, and free or discounted services. Winners must move their venture to downtown St. Louis to qualify. The majority of the 420 applicants were from St. Louis or Missouri (75%), another 92 applicants came from other states, and 11 were outside the U.S. The start-ups represent a range of industries, including: * 21% - Business and Financial Services * 17% - Information Technology * 15% - Technology * 11% - Entertainment and Leisure * 8% - Energy and Biotech Finalists pitched their business concepts in April and grant winners will be announced May 7. To enable the organization to provide even more grants, venture capital firm Advantage Capital Partners has committed $300,000 over the next three years to the effort in honor of the firm's 20th anniversary, Senior Managing Partner Scott Zajac says. Advantage Capital joins Peabody Energy, Emerson and other companies and individuals who are funding the venture. Arch Grant's goal is to increase employment and establish St. Louis as a place where entrepreneurs want to start and grow their businesses, organizers say. "I've been encouraged by the response of the entire community. St. Louis has such an eco-system of support for start-ups like I've never seen before. And it's easier to move a small start-up to St. Louis than a huge Fortune 500 company," Executive Director Sarah Spear says. Catching Up with Innovate VMS For five years, innovate venture Mentoring Service has been creating teams of volunteer mentors, experienced business people and entrepreneurs to advise early stage entrepreneurs. To date, lnnovateVMS has 131 mentors who are active in the program. Some are retirees white others are still in business. "The mentors are the heart of the business" Executive Director Pete Peters says. lnnovateVMS is supporting 93 ventures through its mentorship program, and 29 percent of the mentors provide financial support to the program. Each venture has a team of mentors that is between three and six members strong. The unique feature of the mentoring program is that the mentors aren't assigned. instead, they self-select the entrepreneurial endeavor they wish to support. "This means they come into the program interested in the venture they're going to work with," Peters explains. Since its inception in May 2007, InnovateVMS has had a significant economic impact in the St. Louis region by assisting 134 startup companies. Those companies have created 540 jobs (full and part time, 2011 only), generated $35.5 million in revenue and raised $39 million in funding. InnovateVMS says 83 percent are still going concerns, demonstrating that the program helps startups avoid early business failure. The original focus of the program was strictly education. But the economy prompted a course correction and now the focus includes economic development. "We need to focus on economic development because we need to be able to grow from the inside - grow locally," Peters says. "I actually think we're ahead of where we thought we'd be when we started in 2007," he adds. "But we have a long way to go because of the shift in the economy. It's a different world out there now." Ventures come from a variety of sources and cover a wide range of industries. "About one-third are referrals from universities, 30 percent through mentors and other proteges and the remaining 40 percent hear about us in the press, through public speaking and from other investment and entrepreneurship organizations," Peters says. A few of the newest firms added include: * An outdoor products company with new technology for remote monitoring and operation of boat lifts * A novel medical device company with a unique, nanotechnology-based process for the detection of lung and other cancers * A company with unique formulations of lactase for the in-home preparation of lactose-free milk and treatment of foods for lactose-intolerant people * An electronics manufacturing company with technology that prevents transit workers from using cell phones while driving The major industries involved in the InnovateVMS program include consumer product/retail (32 percent), e-commerce/software development (22 percent) and healthcare/life science (20 percent). The remaining 26 percent is composed of social services, manufacturing, green/clean energy and other technology development. "I see the program growing. I would hope that as we become more of a regional program we start some satellite programs in Columbia, Mo., Columbia, Ill., and even in other cities," Peters says. "This program can be replicated anywhere." Startup Weekend St. Louis' first Startup Weekend in January was a 54-hour entrepreneurial experience that gave budding entrepreneurs the opportunity to network with others eager to take part in possible blockbuster ideas. The concept for the Startup Weekend originated in Colorado in 2007. Today it's funded by a grant from the Ewing Marion Kauffman Foundation in Kansas City and run by a Seattle non-profit that trains facilitators around the world. While slanted toward the information technology sector, non-IT participants came to network and participate as well. "The main purpose of the event is to bring anybody with an entrepreneurial spirit into a fast-paced and fun event," Shelton says. Entrepreneurs pitched their ideas with the best ones moving to the group development stage, really the focus of the weekend. "The Startup Weekend is really a microcosm of what it's like to work in a new business venture," says Shelton. "At this stage, a new idea needs resources and talent - and those are the people who formed the teams designed to take the idea from its basic premise to something closer to being reality. "The goals of the weekend are to connect like-minded people," Shelton says. "We encourage the groups to continue working together after the weekend is over to not only move an idea forward but to facilitate the necessary connections for future endeavors." T-REx Incubator Located in the Railway Exchange Building, above Macy's department store, is a unique space dedicated to burgeoning IT start-ups. Affectionately called "T-REx," (TEC @ Railway Exchange) the 12th floor is a hub of innovation and collaboration. The concept developed from a partnership between the RCGA, Partnership for Downtown St. Louis Community Improvement District and the St. Louis Development Corp. Start-ups share space with Arch Grants and Capital Innovators. "There are over 20 companies with 50 to 60 employees on the 12th floor," Shelton says. "We're at capacity and are looking for additional floors to grow." Tenants must be in the IT sector and are required to go through an application process. Once approved, they become members of the Technology Entrepreneurs Center, which gives them access to events, mentors and office space sized for their venture. "It's a great space for IT entrepreneurs to converse, work together and collaborate," Shelton adds. Olin Cup Competition The annual Olin Cup Competition harnesses the entrepreneurial potential in the St. Louis region. An unprecedented three teams were selected to receive up to $50,000 each at the annual Olin Cup awards ceremony in February, sponsored by the Skandalaris Center for Entrepreneurial Studies at Washington University, Polsinelli Shugart, the RCGA, Olin Business School, RubinBrown and Lopata Flegel & Co. The winning teams were: * SoMoLend, a web- and mobile-based peer-to-peer lending company; * Eyelten Therapeutics, a firm developing therapies to treat age-related macular degeneration; and * Loadmaster Toolkit, a pocket computer with custom software to streamline loading and managing cargo on military aircraft. A $5,000 student prize was awarded to Ryan Rakestraw, a first-year MBA student at Olin Business School and a member of Freiezo LLC, a company developing high-efficiency distributed-wind energy systems. "This year's 40 entrants for the annual competition were outstanding," notes Ken Harrington, managing director of the Skandalaris Center. "So many great things - Arch Grants, Capital Innovators, the recent Startup Weekend - are increasing the support system for entrepreneurs and helping to build the innovation environment in our city." (c) 2012 St. Louis Region Commerce and Growth Association |