Missouri Technology Corp. wants to boost the state's entrepreneurship sector. It's recommended 16 ideas to do so

A strategic plan released Wednesday by the Missouri Technology Corp. includes recommendations to pursue more than a dozen initiatives the report says would help the state better promote entrepreneurship and advance startups.

MTC's report, which is called "Catalyzing Innovation: Strategies for Missouri to Drive Innovation and Entrepreneurship," identifies five main areas where the state's innovation and entrepreneurship economy currently is lagging and offers 16 recommendations to combat those challenges. The items outlined include plans for piloting creative startup financing methods, establishing new programs to help startups more easily find employees and better connecting entrepreneurship organizations across Missouri.

"The creation of this strategic plan allows MTC to continue to support and grow Missouri's entrepreneurs and its entrepreneurial-focused ecosystems for the next decade. This plan will help set the direction for policies, programs and initiatives that foster and support the further growth of entrepreneurs and the advancement of innovation and technology across the State of Missouri," MTC Chairman Dedric Carter said in the report.

MTC launched its strategic planning process in 2021 to examine its own impact in recent years and to develop an outline on how Missouri can drive more economic growth through startups and innovation. Created by the Missouri General Assembly, MTC is a public-private partnership designed to promote entrepreneurship and provide investment to startups and entrepreneur support organizations.

Four of the 16 thought leaders on the steering committee for the strategic planning process are from the Kansas City area. They are: Maria Flynn, managing director of Techstars Kansas City (which recently shut down); Wendy Guillies, CEO of Ewing Marion Kauffman Foundation; Maria Meyers, executive director of the UMKC Innovation Center and founder of KCSourceLink; and Bryan Shannon, founder of TicketRX and a managing director at TreviPay.

MTC's newly released report notes Missouri trails several neighboring states, including Illinois, Tennessee and Indiana, in the number of new net jobs from its early stage companies. The report, which was compiled by Columbus, Ohio-based research firm TEConomy Partners LLC, highlights five "key challenges" Missouri's entrepreneurship and innovation economy faces:

As a response to those challenges, MTC's report includes 16 action items (listed below) grouped around five themes: fund; grow and scale; launch and cultivate; inspire; and connect. Several of the initiatives outlined are designed to provide more financing options for early-stage companies and to help employers more easily find talent to grow their emerging companies.

Specifically, MTC's strategic report said the state needs to support the development of more venture capital funds, targeting a goal of having at least $100 million pumped into angel, preseed and seed funds in the next decade. The report also recommends that $25 million be targeted to "pilot innovation financing options," using revenue-based financing as an example.

Additionally, MTC's report suggests creating a new angel investment tax credit that would offer investors with a transferable income tax credit equal to 25% of their investment in a Missouri startup. The report envisions that program, which would be operated by MTC and the Missouri Department of Economic Development, as providing $100 million in tax credits over a decade, with no more than $10 million in credits provided per year. Another recommendation calls for consideration of launching Missouri Rural Vitality Funds, a new funding mechanism that would allow residents to use personal and alternative assets as collateral for banks to give loans to entrepreneurs in the state's rural regions.

"The creation of Missouri Rural Vitality Funds is a 'novel' concept that, to TEConomy's knowledge, has not been implemented anywhere else in United States," the report said. "It is recommended that additional research be undertaken to understand both state and federal regulations more fully, as well as the level of potential market interest, to assess the feasibility of this concept."

Several initiatives proposed within the strategic plan revolve around developing the state's workforce. They include new entrepreneurial education programs, elevating the state's public relations and marketing efforts and providing $30 million over a decade for an internship program that would connect the incoming workforce with startups. The report also includes several recommendations to help entrepreneurs more easily connect with resources and mentors that could help grow their company. One idea is creating the Entrepreneurial Pathways Program, a statewide project designed to link entrepreneurs with resources pertinent to their companies.

In addition to offering its blueprint to growing Missouri's startup economy, the report released Wednesday also aims to measure MTC's impact. Between fiscal years 2014 and 2021, MTC's investments totaled $75.7 million, resulting in a $6.4 billion economic output and generating $175.6 million in state and local taxes, according to the report.

The General Assembly appropriated $3 million in fiscal year 2022 funding for MTC, tripling the entrepreneur support organization's budget year over year. MTC's funding increase marked a reversal from steep budget cuts it had experienced in prior years. For example, it saw its funding drop 90% from about $24 million in fiscal 2017 to $2.5 million in fiscal 2018. In its report, MTC says its funding drop in 2018 "sent a message throughout the ecosystem that, rather than expand its entrepreneurial investments that had proven successful, the state of Missouri would instead withdraw its support for the ecosystem."

"This has left founders, programs and initiatives questioning whether the support and resources they need will be available," the report said.

A full copy of MTC's strategic plan can be found here. The 16 recommendations included in the report are: