PopBookings probably wouldn’t be in business today without the early support — and more critically the investment dollars — of the Missouri Technology Corporation, Erika Klotz said.
“It really allowed us to do more quicker,” the PopBookings co-founder and CEO said. “For any startup, speed is everything. It allowed us to get credibility right out the door, a lot quicker than we would’ve without MTC.”
Klotz, a speaker on the “Maximizing the Fundraising Process” panel at this week’s Techweek KC event, said PopBookings was a two-time recipient of MTC investment: $75,000 in IDEA funds from MTC, followed by another $300,000. (In between rounds, PopBookings won a $50,000 grant in the inaugural 2015 LaunchKC competition, which itself is supported by MTC funds.)
“They’re, at this point, basically a partner in our business,” she said of the state-run investment program.
But the Missouri Technology Corporation’s future is uncertain.
The agency’s budget was cut substantially from nearly $23 million in 2017 to $3.4 million in spending authority for 2018. More recently, Missouri Gov. Eric Greitens’ office released a report suggesting MTC existing programming be replaced with a privately-managed innovation fund.
“Initially they helped us get our company off the ground,” she said.
Video Fizz applied for $200,000 in IDEA funds, wherein MTC would match funds from an accredited investor to get the company as much as $400,000, Steward said.
“Essentially they knew their investment would be doubled by the Missouri Technology Corporation,” she said. “And that’s how our entire company was started. It was our first level of funding outside of personal money.”
Another $150,000 in follow-on funding a year later helped VideoFizz continue to develop, she said, further preparing the company for greater private investment.
“I think the due diligence process that we went through with MTC forced us to get the information that we needed to talk to other investors,” Steward said. “And the fact that the Missouri Technology Corporation had done due diligence on us validated us for other investors.”
Like Klotz, Steward said her business likely wouldn’t have succeeded without MTC.
During the legislative session, she wrote a letter in support of the agency’s funding program, she said, describing the company and job growth at VideoFizz as a result of the state investment.
MTC’s funding aid has been particularly good for the Kansas City and St. Louis areas because of the high concentration of technology-based entrepreneurship, said Gary Sage, research and policy officer for the Economic Development Corporation of Kansas City.
“It’s almost a foregone conclusion that those companies need some kind of early-stage capital,” Sage said. “The Midwest in general just doesn’t have that early-stage capital to be able to help those emerging businesses. Unless somebody’s got an awful lot of funding coming from friends and family, or out of their own pocket, it’s just very difficult to sustain a business for two or three years while they’re putting together their team and finding those initial sales that will sustain them over time.”
PopBookings was able to grow its staff from three to 10 employees in a matter of two years with MTC’s help, Klotz said.
“There’s no question it’s working,” she said. “Without MTC, it’s really tough. And it could potentially chill a lot of those early-stage companies right out of the gate.”