Kansas City boasts being one of the best cities to launch a startup. But the city that hopes to be America’s “most entrepreneurial city,” is still missing one key ingredient — seed capital to get young businesses of the ground.
KCSourceLink, which is a network of organizations that support the creation of small businesses, released a study last week detailing the city’s shortcomings when it comes to funds available for entrepreneurs.
Bobby Burch, editor-in-chief for Startland News, says there is a lack of cohesion and communication between investors in the area which has created problems for entrepreneurs, sometimes even forcing them to relocate to a city where funding is more readily available.
“I’ve certainly heard plenty of stories from the startups that I have covered in the difficulty of obtaining capital that they need to grow, not only from investors from the outside but also inside the community,” Burch told host Steve Kraske on Up To Date.
Burch said improving access to funding for young businesses will boost the economy.
“Studies by the Kauffman Foundation show that that it is the companies that are less than five years old that are the net job creators in our country today, so its important to get these young companies started, ” Maria Meyers, CEO and founder of KCSourceLink told Kraske.
The study was released in conjunction with a new effort called We Create Capital, which aims to fill the gaps in funding for entrepreneurs.
In addition to identifying who is currently getting funded and at what levels, the study identifies existing gaps and how to bring additional funding into Kansas City.
“We’re certainly leaving a lot of money on the table from federal sources," Meyers said. "For instance, we could increase our micro-lending here significantly by accessing some additional funds from the United States Small Business Administration. We also know that there are a lot of investors out there that aren't very well connected and we think that helping to connect some of the investors could also drive up private investing."
Burch said the We Create Capital initiative has some lofty goals — to the tune of $180 million by 2020. If they are achieved, he said, they would go a long way in growing the economy.
