St. Louis is shaping itself up for a brighter future for startups after recovering from a rough 2016 with corporations shutting down, football teams relocating, and major acquisitions that took jobs away.
In most recent news, the St. Louis Regional Chamber, in collaboration with venture capital firms, including Cultivation Capital – announced the emergence of $5 million in seed funding.
Despite the general notion surrounding the economical and social issues that the city faces, a report by Inc.com in 2016 showed that it was in fact the 5th best city in the United States to start your business.
Andrew Smith, Vice President, Entrepreneurship and Innovation St. Louis Regional Chamber of Commerce
In the optimistic words of Andrew Smith, VP of Entrepreneurship and Innovation at the St. Louis Regional Chamber to Inc.com, “Our research shows that if you are an entrepreneur with a solid idea and a pitch deck, your chances of getting funding in St. Louis are higher than almost anywhere in the US. That wasn’t the case 10 years ago,” adding, “but if we want these companies to survive and thrive, we have to fill the funding gap and make sure they have access to pivot capital.”
The need for funding is a fact that the entire chamber agrees on, including its CEO Joe Reagan, who, at the funding announcement in the Chaifetz Arena said, “It became clear there is an emerging gap in the startup funding continuum.”
While this isn’t the chamber’s first horse in the race, it’s definitely the most significant. “It’s our largest investment into entrepreneurship,” commented Smith, remarking that the funds will go to businesses in “post early seed and pre-series A” phases.
In 2013, the chamber funneled more than $1 million in the form of venture funds that went to accelerators that included SixThirty, Prosper Women Entrepreneurs, and Stadia Ventures.
Following the same direction as Trump’s administration, the current goals of the funding are jobs, jobs, and jobs. The direction truly became clear when Twain Managing Director Matt Badler said, “The hope is to fund 25 to 30 businesses over the next couple of years to allow them to hire employees, get products, and hopefully some of them will go on to larger funding rounds.”
Shining a brighter light, Cliff Holekamp, general partner and co-founder of Cultivation Capital, dubbed those companies as “the big companies of the future.”
Accompanying the encouragement from the government and related businesses, the city’s economic status fairs in its advantage. Jonathan Allen, CEO of Longneck & Thunderfoot, winner of last year’s Arch Grant competition – highlights his company’s successful relocation from New York to St. Louis.
“The day to day cost of living is low too. In the early days of L&T, when we first started in New York, I used to rent my Brooklyn apartment on Airbnb to help lower my living costs. In St. Louis, for the same cost of renting out a single room for a month in NYC, I now rent an entire apartment. You can get a downtown designer loft overlooking the Mississippi for similar prices too,” wrote Allen in his article.
Allen also pointed out the ease of making connection in a city that has just over 315,000 people, as opposed to over eight million people in New York.
In his final praise he said, “It’s a city that is not scared to reflect on itself and understand how it got where it is today. It’s run by a people who put their insights into action. People who know what they are doing and why they are doing it.”