Bouncing Back After the Missouri Technology Corporation Cuts
St. Louis continues to build steam as a great place to start a business. Any number of national articles provide the stats to support that. However, as startups often meet headwinds, a startup ecosystem itself can too, from time-to-time. As many in the St. Louis and broader Missouri startup ecosystem are aware, a very significant source of early stage capital has been reduced this year – a definite headwind for the early stage environment in the state.
The significant cuts to the Missouri Technology Corporation (MTC) made this year are, by some estimates, in excess of $20 million. Given the impressive list of companies that have been funded in part by MTC, we would agree that these cuts do pose at least a short-term challenge for the Missouri startup ecosystem.
However, the entrepreneurial spirit across our region never ceases to amaze us, so we predict that Missouri startups will do what they always do best: pivot where needed to accelerate development even without the historical level of MTC funds. Past that, it appears that more private funds are coming online than ever before, which will help fill that gap. Not to say the ecosystem couldn’t use more, as we all know it could, but the year-over-year increases in private funds are encouraging.
It seems that we are not alone in our positive outlook for the startup ecosystem in the state. Based on the recent results from Governor Greiten’s Innovation Task Force “Pulse Survey,” it appears a large percentage of survey participants are bullish on Missouri’s startup ecosystem. A few key stats that impressed us from the survey are:
- 70% of the 1,818 survey respondents agreed that “The climate for entrepreneurship and innovation in Missouri seems to be improving.”
- 67% of the same group of respondents agreed that “Overall, Missouri is a great place for entrepreneurs and innovators to start a business.”
While these stats are encouraging, there were a few that suggest the state could use a boost in capital and other incentives for startups and entrepreneurs. For example:
- Only 14% thought that “State support for entrepreneurs and innovators (e.g., through funding, tax incentives, infrastructure, etc.) is sufficient for new tech startups.”
- A slightly higher percentage, 24%, believe that “Entrepreneurs and innovators in Missouri have access to capital needed for new tech startups.”
Our key takeaway from these stats is that while the majority of the survey respondents are bullish on Missouri as a great place to start a business, they are clearly less than happy with the capital and incentives available. We too are confident that Missouri is the right place for entrepreneurs to start their businesses, and we are hopeful that with strong companies more private capital will follow to fill in the MTC funding gap. If the state steps up its efforts, that will be the icing on the cake.
What’s your take? We’d love to hear it, so please contact the Anders Startup Team to discuss more.