Chris Reimer, director of Marketing and Communications at Arch Grants, sat down with Gabe Angieri, executive director of Arch Grants, to hear his thoughts on the state of entrepreneurship and the startup community in St. Louis.
How does Arch Grants’ focus on non-dilutive funding differ from traditional venture capital, and what benefits does this approach offer to our founders?
We’re a nonprofit grassroots economic development organization focused on growing St. Louis’ entrepreneurial ecosystem and economy. We engage over 300 volunteer judges from our region to recruit, evaluate and select tech-forward, scalable early-stage startups to receive non-dilutive grants. As opposed to the venture capital approach, which rightly prioritizes financial returns to investors, our priority is generating economic impact in St. Louis. That translates to jobs created, growth capital raised and taxable revenue generated. The main benefit our founders realize through this approach is our attention to how they, as entrepreneurs and individuals, can succeed and contribute to our community, regardless of their funded venture’s success or failure.
How has the entrepreneurial landscape in St. Louis evolved since 2012 when Arch Grants began providing funding to early-stage startups?
The startup ecosystem has matured a great deal. More startups are taking shape in our region than ever before. We’re seeing greater interest in our program from companies that are farther along in their startup journeys, with ideas that are market-tested, and increasingly, generating promising revenue. The magnet that pulls founders and startups to St. Louis has grown stronger, and the result is a region that is fertile ground for scaling a company. And as large businesses have undertaken consolidations, mergers and acquisitions, we’re seeing talented people coming out of long corporate careers who know St. Louis is the prime location to start something new.
What are some of the unique challenges faced by early-stage tech startups in the Midwest, and how does our funding model help address these?
Access to capital is an important and obvious challenge all startups must face. Arch Grants wants to see more venture capital flow into St. Louis and to companies solving society’s most intractable problems. We also tend to have a more risk-averse investment culture in the Midwest. Our funding approach has and will continue to bolster St. Louis as an “innovation lab,” helping create case studies that draw additional investments from the coasts.
How do you see entrepreneurship contributing to urban renewal and economic growth in St. Louis?
Entrepreneurship is critical to any city’s economic vibrancy. The established cycle of capitalism necessitates the formation of new businesses, the scaling of those businesses and the subsummation of those that are successful by — typically — even larger businesses. Rather than bemoaning the acquisitions of our long-standing corporate leaders like AB, Monsanto and Express Scripts, at Arch Grants we’re thinking about how we capitalize on these opportunities to germinate the next crop of large employers. Early-stage ventures are an obvious catalyst for economic development, but they need a kickstart. If Arch Grants can prime the pump for these companies, giving them a chance to succeed more quickly, we stand to make a positive economic impact in St. Louis. Besides the numbers, people and companies choosing to settle down and grow roots here accretes to our region’s positive self-image and reputation.
Looking ahead, what emerging technologies or industries do you believe have the potential to transform the St. Louis startup ecosystem in the next five-10 years?
We’re seeing huge interest in geospatial, advanced manufacturing and agtech. The NGA West project is generating massive opportunities and a flow of resources. I’m most excited about the emerging use case scenarios of GIS (geographic information systems). We’re starting to see a proliferation of applications focused on improving quality of life via transportation, health care, conservation and farming. We’re especially excited about the expertise that will come out of NGA because those people will start companies, refine the technology and change the world in ways we may not yet be able to imagine.
What advice would you give to aspiring entrepreneurs who are considering launching a tech startup in St. Louis?
Do your research, and ask yourself, “Why St. Louis?” St. Louis is the place to be for a myriad of reasons, and the ecosystem is growing every day. But when it comes to the all-important decision on where to start a business and build your life, figure out how you’re going to leverage and make the most of the significant assets in this region. Make sure you’ll be close enough to your customers. Ask yourself, “Is St. Louis the place where we can leverage our competitive advantage?” Are you ready to enter our community and network to identify the support you need?
Since 2012, we’ve funded over 250 early-stage startups. Overwhelmingly, they’ve found a supportive community through Arch Grants that is eager to help them in any way needed to achieve their goals. Consequently, over 60% of those startups continue to operate and grow in St. Louis — exclusive of the 10-plus companies that successfully exited, such as Observable Networks and Label Insight. Aspiring entrepreneurs, with a bit of due diligence and research, will discover what our companies have come to realize — St. Louis is a hotbed for innovative startups, and is undoubtedly a destination of choice.
Arch Grants is a nonprofit organization transforming the St. Louis economy by attracting and retaining extraordinary entrepreneurs and their startups. We succeed due to the generosity of our donors, volunteer judges, founders and supporters. To get involved with Arch Grants, visit our website.
