Kansas City has traction, said Davyeon Ross, but the city and its support network must keep the ball moving.
“It’s impressive how much these startups and companies are contributing to the community and the economy,” said Ross co-founder and COO of ShotTracker, reacting to data within Startland’s 2018 list of Top Venture Capital-Backed Companies in Kansas City.
Based on self-reported figures from 46 qualifying firms, those companies featured on the list posted $436.66 million in capital to date and nearly 1,150 jobs created.
“We as an entrepreneurial community have upped our game on the quality of companies,” said Ross, whose Merriam-based tech firm is featured in the list. “It’s a testament to the quality of programming and resources — things like Digital Sandbox where you can receive a $15,000 investment so you can actually build a prototype and de-risk the deal. Even a relatively small investment like that can mean paying a graphic designer for six months.”
“But we shouldn’t get comfortable,” he quickly added.
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While it’s exciting to see his peers’ companies growing — many quickly — Ross noted investments are just one play in an otherwise lengthy game.
“Raising capital is more of a milestone than an accomplishment. It means that more than just the founders believe in what you’re doing,” he said. “It’s validation, and it also means you don’t have to self-fund the business — [but] it can mean you’re maybe not where you want to be from a revenue perspective.”
Such early-stage investments are essential to many high-growth companies — particularly for the founders and early employees, Ross said.
“Although you’re building a company, you still have to eat. Money is money,” he said. “Every little bit helps.”
It’s the same sentiment Maria Meyers used to describe boosters and backers of Kansas City’s entrepreneurial culture.
“There are literally thousands of people now supporting this effort. It’s become a very strong movement in the community,” said Meyers, founder of KCSourceLink, as well as executive director of the Innovation Center at the University of Missouri-Kansas City.
Organizations like the Civic Council of Greater Kansas City, KC Rising, and the Greater Kansas City Chamber of Commerce have played a big role, she said, as have fund managers, investors and organizers of programs like KCInvestED.
Kansas City is starting to move the needle, as evidenced by the figures reported in Startland’s list, Meyers said.
“It’s wonderful that these companies are willing to be so open about their progress because that helps us to continue the conversation about how to improve capital access in Kansas City. It gives us a great baseline for watching what happens over the next few years,” she said. “We would expect that with all the effort we’ve put in to increasing capital access that we would see this trend continue.”
Strengthening investment numbers are an outcome long envisioned by organizers of KC Rising, a regional economic development effort, said Ron LeMay, CEO of Main Street Data and managing director of OpenAir Equity Partners. LeMay and ShotTracker’s Ross serve on the KC Rising Innovation and Entrepreneurship work group.
“Since we started KC Rising, it’s been amazing to see the change in the atmosphere — the change in attitudes toward early stage companies,” LeMay said.
Ross credits much of that change to the snowball effect success can have on a community like Kansas City, he said.
“Exits have helped trigger reinvesting. Some of the best investors are entrepreneurs because they know exactly what every one of these companies has to go through. They’ve already lived it,” Ross said. “EyeVerify’s success [the company sold to Ant Financial in 2016 for more than $100 million] opened the doors for a lot of investors. They made a good return and were like, ‘Hey! I can do this a lot more because there’s money to be made here.’”
Estimating a company’s anticipated timeline for an exit in Kansas City at five to eight years, Ross said the next big success story could come from many of the company’s included among Startland’s list.
“Activity begets activity,” he said. “There isn’t a silver bullet — it’s a combination of wins, better resources, people who are exiting and dumping money back in, and investors who are getting better educated on the startup process.”
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