Hometown capital is validating, said Darcy Howe, but it isn’t everything.
Half of the firms in Startland’s 2018 list of Top Venture Capital-Backed Companies in Kansas City received 50 percent or more of their funding from KC investors — a promising indicator of local support that suggests to outside investors that a company is ready to take a next big step, said Howe, founder and managing director of the KCRise Fund.
“Those who already have a higher percentage of capital from outside of Kansas City probably are the more mature companies on the list,” she said. “They’re able to get their initial funding in town, build something sustainable from that initial funding and have enough pattern recognition to institutional investors that it overcomes the idea of ‘Where are they located?’”
“It doesn’t really matter where the company is from,” added Davyeon Ross, co-founder and COO of ShotTracker, a Merriam-based tech company that landed on the list. “But it takes time to get to the right stage, to get the momentum you want, to build something that is exciting and strategically makes sense to everyone.”
The 46 companies in the Startland list posted more than $436 million in capital investments, according to self-reported data. Of that, about 30 percent or more than $130 million was from within Kansas City.
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Now with 29 employees, ShotTracker has amassed $21.5 million in capital since its founding in 2013. High-profile investors like basketball legend Magic Johnson, former NBA commissioner David Stern and baseball player Ryan Howard have helped push the firm to 89 percent outside capital support — though ShotTracker notably also is a portfolio company of Howe’s KCRise Fund.
Ross, who serves alongside Howe on the Innovation and Entrepreneurship work group for KC Rising, a regional economic development effort, was pleasantly surprised by the strength of investment support across the metro, he said.
“It’s powerful to see how much money is being deployed in and from within Kansas City,” Ross said. “It goes to show that people are getting more and more comfortable with the tech and startup space. That’s been somewhat of a challenge for Kansas City because it’s been more of a brick-and-mortar, real estate-centered city in the past.”
Hometown support feels affirming, said Howe, but she reiterated its ultimately limited impact for typical growth-stage companies.
“We want more people in Kansas City to get what’s going on and have the pleasure of participating, but we know in the end you’re going to need more capital and that’s why we’re developing relationships around the country,” she said. “Successful companies aren’t just locally funded. These companies need to think about their global reach — not just outside the region.”
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