Dear ITEN Network:
The ITEN Team wants to extend our New Year wishes! Hope everyone is enjoying a happy and healthy Holiday Season. However, before we turn our collective energy and attention to the work of 2017, we want to share a recent St. Louis Business Journal article that featured ITEN’s very own, Francis Chmelir.
ITEN’s Chmelir: Startups still face ‘challenging’ funding conditions
Dec 29, 2016, 11:37am CST
By Brian Feldt
St. Louis Business Journal
Employment at local tech startups has more than doubled since 2011, a sign of St. Louis’ growing entrepreneurial community. But while startups continue growing – and hiring – investors have struggled to keep pace.
Through the first three quarters of 2016, according to PwC’s MoneyTree Report, investors pumped $171 million into 29 deals, down slightly from last year’s pace of $184.3 million over 34 deals. Those figures are for the entire state of Missouri, but most of those totals were invested in St. Louis area ventures.
The Business Journal caught up with ITEN Executive Director Francis Chmelir to gauge 2016 and it’s impact on local tech startups as well as where opportunity exists heading into a new year.
For starters, how would you describe 2016 as it relates to startup success? While we didn’t have a ton of huge exits, which we certainly still need in the tech startup ecosystem, I think we still made positive momentum going forward. Look at all the incubators around town – places like the Downtown T-REX and Cortex – and they are all full and you’re seeing lots of focused meetings around innovation and entrepreneurship. And that’s not just from startups, it’s from corporate partners, too, which is a very positive trend.
Who are some entrepreneurs or startups that aren’t known well around St. Louis but maybe should be? We’re really impressed with Chris Deck and what he’s doing with Deck Commerce and Tom Stemm from Ryvit. Both of them had operated successful services-based IT businesses and pivoted. Tom left (as chief strategy officer of GadellNet) and founded Ryvit (which enables software vendors to brand and resell integration plugins). Chris turned Deck Commerce (which has developed cloud software for omnichannel retail clients) into a more product oriented company. Both are now more scalable in shorter periods of time. Another company that doesn’t get a lot of play is Hoperator (which combined artificial intelligence and human interaction to increase bookings and guest experience for hospitality clients). Those were just a few guys who really understood the industry and what they were going after. Briefly, a few others include Ellen Prinzi of Olio City and Amanda Patterson of Health Call List.
What is St. Louis doing right for startups? I think we’re getting better at doubling down on the sectors that we do really well. And that is plant science, with things like The Yield Lab, and fintech, with SixThirty and SixThirty Cyber. We’re starting to figure out our identity a little bit. That may mean that certain things won’t work as well here as they do other places.
Corporate engagement has long been a focus for ITEN. How is St. Louis doing in that regard? Things continue to happen on the corporate engagement front. Corporations are more often looking for startups and those one-to-one matches where a startup could help solve a problem they have. At ITEN, we work hard to make sure there is a sustainable pathway in which startups can interact with the right elements of a corporation. We’ve approached five members of our corporate engagement program – Ameren, Enterprise Holdings, Mercy Health, Monsanto and RGAx – and I think in those cases, we are spending time with corporation innovation teams figuring out how to interact with them as well as the limitations they might be under. In 2017, we may see some new venture creation coming out of those dialogs.
How is startup funding going? We’re still gathering the numbers for the year-end figures, but my sense is if we have not increased slightly, we’ll be about on par with 2015. It’s still challenging to diversify and get more investors into the mix. Funding is on my list of big challenges for our region – for startups and support organizations. There is still uncertainty about how we can continue funding startups and how it can be sustainable.
If you had to sum up 2016, as it relates to startups, in a Tweet, what would it be? Tenuous and a bit of uncertainty. We’re hopeful a new administration in Jefferson City sees value in startups and increases funding for sources like the Missouri Technology Corp.
Where is the opportunity in 2017 Startups are an economic development opportunity with real cross-state appeal. We can broaden startup investors and bring other investors to the forefront. Kansas City and St. Louis really compliment each other and raise the bar for each other. We’re interested in making sure that happens through meaningful collaboration.
(Brian Feldt covers technology, venture capital, startups, real estate and sports business. )
Here’s the link to the original article: http://www.bizjournals.com/stlouis/news/2016/12/29/iten-s-chmelir-startups-still-face-challenging.html