Not enough founders in the pre-seed funding stage get the help they need to successfully build their emerging startups, said Toby Rush.
“How can you find, focus and accelerate people before they’ve raised money, before they’ve built their team, before they’ve made all of the mistakes that I’ve made plenty of times and that most entrepreneurs make?” Rush, the serial entrepreneur who famously sold EyeVerify to Alibaba for more than $100 million in 2016, asked.
The answer could come in the form of an old idea made new: the venture studio.
Rush discussed the concept — which is building momentum with Rush and business partners at the helm, but not yet fully launched in Kansas City — at the Third Friday’s speaker series, hosted by OHUB.KC.
“The idea [behind a company chosen for the studio] has to be big enough to be venture backable,” Rush said, describing the potential process for choosing about 15 participating tech or software-based startups over the next four years.
The as-yet unnamed venture studio is still in its early stages, but ultimately is expected to accelerate four to six companies each year via support from an anticipated, double-digit fund, Rush added, noting he wanted to create something that generated a greater impact on the metro than traditional VC-funding.
“Entrepreneurial talent is pretty evenly distributed throughout the world,” he said, noting more opportunities for early-stage startup development could result in explosive growth of the entrepreneurial system — especially as it relates to founder diversity. “The ability to spot that talent and plug them into an ecosystem and networks to really take advantage of that is pretty limited.”
“We want to find, in particular, people of color, women, immigrants — they absolutely have the grit, the tenacity and that growth mindset that we want,” he said of groups underserved by current Kansas City resources.
“These are people who probably don’t have the relationships and network that I now have, right? … We think there’s a really cool opportunity to engage with amazing people and kind of plug them in.”
Founders engaged with the venture studio concept would be provided with such foundational documents as operating and employment agreements and healthcare and payroll guidance, in addition to support from an what is envisioned as a 20-person team of advisors and experts who will help each company prepare for its seed round, Rush said.
Companies in agtech, fintech, healtech, and energy would be among top contenders for the studio, he noted.
“There’s never going to be an application process per se. … It’s never going to be [an interview,]” he told the OHUB crowd, urging them to reach out and introduce themselves. “Let’s get to know each other. Let’s build a relationship. This is a long term relationship building type of scenario.”
“I’m going to be in Kansas City the next few decades. I hope you guys are as well. Let’s start getting to know each other,” he said.
Click here to learn more about OHUB.KC, a partnership between Atlanta-based Opportunity Hub and the Economic Development Corporation of Kansas City.