About a year ago, a group of Kansas City entrepreneurs noticed a troubling pattern — they were having the same conversations over and over again with their peers.
“We got kind of tired of continuously hearing the problems that a lot of our peers were having in creating new entrepreneurial businesses," says Blake Miller, partner at Think Big Partners and managing partner of The Collective Funds, "While also hearing from our other peers that are in more professional businesses that they wanted to support more entrepreneurial endeavors and things that were happening in Kansas City but didn't know how to.”
So, as entrepreneurs are prone to do when they see a problem, they set out to fix it.
Miller, along with colleagues Alex Altomare, co-founder of the BetaBlox accelerator, Erik Wullshleger co-founder of the Sprint Accelerator and Shane Spencer, an independent fund manager, formed The Collective Funds, a venture capital group that targets early-stage Kansas City entrepreneurs.
They started accepting applications for funds last week and hope to infuse $10 million into area startups over the next two to four years.
Collective Funds says, aside from being focused solely on Kansas City startups, they are different because they plan on involving their partners in the entire process of an investment.
In a traditional investment model, limited partner investors, or LPs, invest with a management team and then become a silent partner, trusting that the management team will make the best decision with that money.
At its core, The Collective will have a similar structure.
“But the four of us came together because we all provide services to the entrepreneurial community,” Spencer says.
The Collective's LP base is made up of 35 individuals, many of whom are fellow innovators and entrepreneurs.
“We can leverage these skills, knowledge and expertise of those LP members, ultimately affecting the investments that we make. We're really creating more of a community around the investment rather than just a pure finance play,” Spencer says.
The collective will target startups in the seed stage — one the earliest rounds of funding.
“It’s always hard to quantify the opportunity in any industry or across any sector, but when we looked at Kansas City and isolated it as an ecosystem, there is a very defined gap here in this early stage for startup funding,” Altomare says.
Miller says that Kansas City is in a high growth trajectory, and he hopes The Collective can capitalize on that growth. The group plans on making their first investments this summer.
Lisa Rodriguez is a reporter and producer at KCUR 89.3. Connect with her on Twitter @larodrig.