For startups in Wichita, one of the primary barriers has historically been access to venture capital.
Fortunately for those launching businesses now, particularly with a technology bent, local stakeholders say that dynamic has begun to change in recent years.
“Significant strides have been made,” said Josh Oeding, founder of locally based Tenzing Capital.
In addition to Tenzing now calling Wichita home, Oeding points locally to Accelerate Venture Partners, which has deployed more than $6 million in the past five years in association with the entrepreneurial organization NXTUS Inc. — for which Oeding previously served as CEO.
Also contributing to the improved environment, he said, is the Network GrowKS Equity fund that is pumping capital into startups around the state.
And, he said, more local companies have found success raising capital for Wichita operations from institutional investors outside of the market.
Then there is the natural organic growth — perhaps best highlighted by the $10 million investment into local startup Weavix by Koch Disruptive Technologies announced in January.
Oeding said growth going forward will be driven by what he hopes is an expanding number of local startups with the kind of scalable ideas that will draw even more investment dollars in and to Wichita.
“There are now more investors writing checks outside the traditional tech hubs than at any time since I've been working in the innovation economy, and the bigger and more meaningful our local companies can become, the better positioned we will be to take advantage of this,” he said.
Quinn Roberston, who helps lead the Accelerate Venture Partners program, said that kind of growth is already showing itself in the numbers just through AVP and NXTUS alone.
After starting 2022 with 30 investors, he says AVP has since doubled that total.
And those investors, he said, are not passive.
“I think they are looking for a more diverse set of ways they can deploy capital,” Robertson said.
To facilitate that, Robertson said AVP has begun crafting more non-traditional investment options in efforts to connect investors with entrepreneurs in ways that make sense for both sides.
While encouraging interested local startups to contact him — “just get something in my inbox (quinn@nxtus.io),” he says — there is also greater resources than ever before for entrepreneurs to find available dollars through open source databases of angel investors.
“That really didn’t exist four or five years ago,” he said.
The key in any pitch, he said, is for the entrepreneur to truly know their story and to tell it well.
“You’ve got to be ready to take a swing when you get in the batter’s box,” he said.
Bootstrapping
Ultimately, Robertson said, the world of venture capital has shrunk in a good way — meaning that it is no longer as important to an area how much investment is generated within that geographical boundary as it is how many viable startups its ecosystem helps create.
But he also doesn’t want entrepreneurs to hang their hats solely on venture capital.
Robertson points to Mailchimp, the email marketing platform acquired by Intuit in 2021 for $12 billion in a deal that made its co-founders worth $5 billion.
In one of the industry’s true stories of bootstrapped success, Mailchimp made it to $800 million in sales before that acquisition with virtually no outside infusion of cash.
That underscores what both Robertson and Oeding said is the concept that good ideas with good founders are going to rise one way or another.
And each is heartened by what they see as a growing number of such companies rising out of Wichita.
“I continue to see new companies get created,” Robertson said. “There seems to be more (startup) activity.”
As that continues, Oeding said, a big milestone for the region will be a large exit — the Mailchimp acquisition would be such an example — to add to Wichita’s startup checklist.
And the more companies that start locally, the better those chances are. And the chances that more of their peers attract investment along the way increases, as well.
“Company founders drive business growth and value creation, and the investment dollars seek them out,” Oeding said. “For me the equation is simple, more founders building real companies solving real customer problems with significant growth will keep elevating the profile of the region.”
