Barbara Pruitt, 816-932-1288, firstname.lastname@example.org, Kauffman Foundation
Study says more mentoring would boost the region's dynamic high-growth startup scene
(Kansas City, Mo.) July 18, 2013 – A Ewing Marion Kauffman Foundation study released today found that, while the Kansas City region has many entrepreneurial strengths, those assets could be tapped further to help young companies attain even greater success.
The study, "Leveraging Regional Assets: Insights from High-Growth Companies in Kansas City," says that more mentoring between experienced and startup entrepreneurs could add fuel to the region's business engine. The study's conclusion is based on interviews with 22 Inc. 500|5000 information technology, biotechnology and business services firms in the Kansas City area. Founders were asked about their views on the strengths and viability of Kansas City's entrepreneurial ecosystem.
Most of the founders reported that locally based mentors had played a significant role in their success.
"While the study shows that Kansas City's entrepreneurial community is somewhat fragmented, it also reveals that, overall, startup leaders benefit from an inherent culture that is supportive and friendly," said Yasuyuki Motoyama, Kauffman Foundation senior scholar and author of the report. "The small-town environment often contributes to higher-quality professional leads and the quick establishment of trusted business relationships. Entrepreneurship leaders therefore need to take more intentional, formalized steps to connect experienced and new entrepreneurs."
The study notes that people outside the region often overlook Kansas City and its successful entrepreneurs in economic development studies.
Other findings include:
- Lack of venture capital or angel investment does not hinder the growth of Kansas City firms. Very few of the high-growth firms interviewed reported receiving venture capital or angel investments. Instead, most were self-financed or received financial assistance from founders' close friends and families. Some bootstrapped by adapting their firms to customer needs to achieve growth, while others scaled up only as revenues increased and additional customers were found.
- Kansas City firms have access to a high-quality regional talent pool. Most interviewees believe Kansas City offers high-quality talent with a strong work ethic. Growing firms often have long-term employee development strategies to hire young people and train them to be first-class professionals.
- Most Kansas City entrepreneurs find support from customers, vendors, and/or collaborating firms in the region. These regional connections lead to innovations and growth.
Many high-growth firms serve only the Kansas City area or a limited market of regional cities. The company founders see this focus as a business strength, recognizing that a firm does not have to capture a national or global market to be highly successful.