How We Got Here
It is worthwhile to glance back for a moment to the foundations that have enabled the recent growth of St. Louis Tech Startup Ecosystem. Without these foundational efforts, the current progress would not have been possible.
The Missouri Venture Forum was an early provider of connections for entrepreneurs and investors, and the InvestMidwest Venture Capital Forum and the St. Louis Arch Angels have been supporting selected high-growth startups since the early 2000’s, although primarily in life sciences and medical device technology. In 2003, the Technology Entrepreneur Center (TEC) established the first IT-focused incubator in the region, producing compelling tech companies SliceHost, Global Velocity and others.
Innovate St. Louis was formed in 2007 and launched its flagship mentoring program, the Venture Mentoring Service (IVMS). Based upon an MIT mentoring program, IVMS was a pioneer in offering incubator-quality mentoring without the need for a real estate component. Under the same Innovate St. Louis umbrella, ITEN was formed in 2008, thanks in a very large part to the support of the Missouri Technology Corporation (MTC). ITEN’s model didn’t require an incubator and in focusing on tech companies, leveraged the growing ubiquity of high-speed Internet access. The need for tech companies to be collocated with their server array had gone away, and startup companies were freed up to be anywhere.
ITEN’s mission has been two-fold: first to be the catalyst for the emergence of a vibrant startup ecosystem that generates great tech startups; second, to identify gaps in the ecosystem and find ways to address those deficiencies, through events, programs, other innovations, or the encouragement of partners who can provide the needed elements.
In those early days, local tech entrepreneurs had a bleak notion of St. Louis. Many of them felt they were the only tech startup in town, there was no support for them in the community, and to find investors they’d eventually have to go to the west coast. The investors we connected with in those days had a predictably similar view: there were no interesting tech deals in St. Louis and they found their deals through relationships they had through investor groups on the west coast. So both were right, but only because they weren’t connected with each other.
In those early days of 2008 and 2009, ITEN was all about building those connections that otherwise didn’t exist. We used a combination of public and private events as well as trying to chart what was going on and who needed what on a huge excel spreadsheet. To really build a community, though, we soon needed mentors. We looked for individuals who understood the tech startup landscape and/or could provide immediate value to entrepreneurs needing advice and direction. Most of the mentors we’ve brought in are serial entrepreneurs, tech investors and others currently working in the tech space with small, medium or large-scale enterprises. They have expertise across the board, not just in coding and big data applications but also marketing, sales, finance, operations, legal and other specialized needs.
Near the end of 2009, we launched the Mock Angel program, which prepares our most promising ventures for investor discussions. The mentor group affiliated with this program includes a number of investors, serial entrepreneurs and financial experts familiar with valuation issues for startups. This program has been very influential in the community and has produced many of the companies that are gaining great traction today. While we don’t credit all of their success to participation in this program, there is unanimous agreement among the graduates of Mock Angels that it has been of great value to them. About three quarters of the graduates of this program have received outside funding, a statistic that makes us very proud.
This increasing quality deal flow provided opportunities for investors, and in the last couple of years we’ve seen not only a new interest on the part of the Arch Angels in tech deals, but also the founding of Capital Innovators in 2011, FinServe Tech Angels, and then in early 2012 both Arch Grants and Cultivation Capital launched their investment programs. Simultaneously with the founding of Capital Innovators, T-Rex opened its doors downtown providing affordable office space specifically for new tech startups. T-Rex is a huge success story with over 40 companies on two floors of the Railway Exchange building downtown.
There’s no denying that with the advent of new players in the tech ecosystem, some jostling for branding space has inevitably occurred, but the overarching spirit of collaboration and cooperation has carried the day, and is a real hallmark of what’s right with the startup community in St. Louis. ITEN works very closely with all of the organizations mentioned, celebrating their successes as indicative of the overall health of the community. Many of the startups on ITEN Top Ten and Fast TEN lists have benefitted greatly from the support of one and often two or three of these groups.
For example, Yurbuds, Aisle411, Multicoreware, NorseCorp, Food Essentials, Lockerdome and others are emerging success stories that a number of organizations have helped. To quote a familiar saying, “It takes a village.”
Let’s end by coming back to our number one priority, and that’s the entrepreneur and her or his vision, dedication, and team. Without the entrepreneur, investors, funds, and venture development organizations are all useless. As a community, we need to recognize that our region’s future depends upon the success of the pioneers who are creating the successful new high-growth ventures. And as the community embraces entrepreneurship as a foundational element of what St. Louis must become, I believe we’ve shown that given great entrepreneurs (which we have!), our collaborative and growing support ecosystem can accelerate and multiply many times over the community impact and potential success of these new ventures.
We’ve been hard at work since 2008 accelerating tech startups and building the ecosystem needed to sustain a robust flow of new and compelling ventures. Here are some indicators of the results:
The St. Louis Tech Startup Report, capturing 2015 results and trends:
The St. Louis Tech Startup Report, capturing 2014 results and trends:
The St. Louis Tech Startup Report, capturing 2013 results and trends:
The St. Louis Tech Startup Report, capturing 2012 results and trends:
Why start a tech company in St. Louis in one graphic
This graphic covers many of the topics a tech startup might consider when deciding on the best location. Cost of living? Salaries for programmers? Taxes? Educated workers? All better in St. Louis!