St. Louis Launches $100M Initiative to Strengthen Innovation Ecosystem

Business, civic, and political leaders in St. Louis are coming together to raise $100 million in private funds over the next five years to support the Regional Entrepreneurial Initiative, a new effort aimed at helping emerging regional businesses grow and thrive. The project was launched with funding from the federal government and will draw on several ongoing fundraising initiatives in the community. About 80 percent of the funds will be used to provide capital support for startup businesses, with the remaining 20 percent directed toward entrepreneurial support and mentoring, according to the St. Louis Beacon.

In April 2012, the city and county of St. Louis invited stakeholders to develop a regional economic development strategy that would guide efforts to grow and retain high-growth startups. The St. Louis Regional Entrepreneurship Initative Report received financial assistance from the Economic Development Administration (EDA), the state of Missouri, and the St. Louis County Economic Council. The findings of the report suggest that the St. Louis region has a growing cluster of resources to support entrepreneurship, but that they are not of uniform quality and not distributed evenly across sectors. For example, the region's bioscience sector is relatively well-supported through the efforts of such organizations at BioSTL, BioGenerator and the Helix Center Biotech Incubator. Information technology companies, however, have few local organizations and programs to rely on for support. Resources for the agricultural, energy and advanced manufacturing sectors remain scarce and uncoordinated.

Capital support is singled out in the report as a particular area for improvement across all sectors. Successful startups that have stayed in the region have had to attract investment from other areas of the country. While the region has had success in attracting angel and venture investors, businesses lack access to the early stage capital that can bridge the gap between validation funding and series A investment.

In response to the findings, representatives from state and local government, universities, economic development offices, and the startup and investor communities provided input on how to seed and retain high-growth startups in the region. St. Louis leaders constructed the program after reviewing best practices from around the country and received logistical support from JumpStart, Inc., a Cleveland-based VDO that assists regions with developing entrepreneurship.

The principal motivation behind the Regional Entrepreneurship Initiative is to keep St. Louis startup communities from relocating to larger markets like Silicon Valley. The Regional Entrepreneurial Initiative will leverage the resources of successful area programs like BioSTL, Arch Grants, and St. Louis Arch Angels to fund and support high-growth startups. It is projected that 80 percent of the $100 million in funding will be channeled towards increasing the availability of early stage capital, while the remaining 20 percent will be used to provide the entrepreneurial support and mentoring needed to ensure that these businesses become successful. To promote this unified approach to regional development, project stakeholders also will develop a common metrics system to measure the impact of their investment, as well as develop a coordinated marketing and communications campaign to support capital investment in the region.