What’s startup support worth? Orgs threatened by budget cuts rally behind ROI numbers
February 27, 2020 | Startland News Staff
Editor’s note: Startland News is a program of STARTLAND, an ecosystem-building organization that is among the participants in an informal coalition of entrepreneur support groups hoping to increase funding for startup support in the 2020-2021 Kansas City, Missouri, budget. This story was produced independently by Startland News’ nonprofit newsroom.
The impact is in the numbers, say leading entrepreneur support organizations in Kansas City — pointing to 2019 data in the face of proposed KCMO budget cuts that would slash funding for local startup and small business support.
Eze Redwood, Twenty30CEO
“Everyday small businesses fight to create jobs and culture in this city, often risking everything to make it work,” said Eze Redwood, a serial entrepreneur and community organizer driving a coalition of support organizations opposed to Mayor Quinton Lucas’ submitted spending plan for 2020-2021. “That’s why it’s so disheartening that the city thinks so little of entrepreneurs that they cut the budget that directly supports small biz to $250,000 out of a $1.7 billion budget. That’s 14/1000th of 1 percent for the people creating 60 percent of the net new jobs.”
“And thus 60 percent of the ‘unexpected’ tax revenue growth,” he added.
Click here to read more about the proposed budget cuts and the startup community response so far.
Two more KCMO Resident Speakeasy Sessions are planned in the coming days — Saturday, Feb. 29 and Tuesday, March 3 — to serve as public budget hearings ahead of the proposed budget’s expected adoption by the Kansas City City Council on March 26.
Click here to learn more about a planned Budget Feedback Takeover, organized by Redwood’s Twenty30CEO effort.
Redwood and leaders from various support organizations plan to present deeper data on the city’s return on investment from financially backing groups like KCSourceLink and LaunchKC, which would see some of the most immediate effects of the cuts.
Among the preliminary ROI numbers for participating support groups, based on 2019 activity, according to a document circulated by organizers:
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- KCSourceLink — 200 sessions and 6,000 attended at Global Entrepreneurship Week; 9,489 community interactions; 114 business started
- LaunchKC/Economic Development Corporation of Kansas City — 275 FTE; $87 million in follow-on funding; aided 53 percent women or minority owned businesses; $250,000 city investment generated $1,172,000 in earning taxes; $900,000 in awards in 2019 to 18 business (up 80 percent in annual awards); KCUP hosts monthly entrepreneurship series that have 200-plus attendees per event; has funded 10 companies at $5,000; has funded five companies at $50,000; provided accelerator education; provided ecosystem building through workshops, events, and free national content
- Block Knowledge — 1,882 trained; 35 jobs created; $3 million in assistance for 68 founders; raised funding for 182 future technical founders
- STARTLAND — 522 KC business news stories and 24,000 subscribers (Startland News); 854 student participants, 55 trained educators, 79 mentors (STARTLAND Education)
- Urban Business Growth Initiative — 93 scholarships; 12 businesses started; $6.1 million increased sales; 105 jobs created and 91 retained
- AltCap — 105 microloans (average microloan is $26,000); microloan total is $2.7 million, which is 88 percent of loan portfolio
- KC Digital Drive — Three grant awards of $10,000 each to startup companies; sent five companies through US Ignite FastTrac Accelerator
- GUILDit — Assisted six sole entrepreneurs to achieve $30,000 in funds; succeeded in meeting 81 percent of 22 sole entrepreneurs’ challenges
KCMO would remove $50,000 for the LaunchKC program and $75,000 for KCSourceLink, if the submitted budget is approved. The budget would retain $250,000 for entrepreneurship support through the Urban Business Growth Initiative at the UMKC Innovation Center/KCSourceLink.
The proposed budget also removes $300,000 for the planned Keystone innovation district project.
Click here to read more about the budget’s possible impact on Keystone.
The final two Speakeasy Sessions are set for:
- 9 a.m. — Saturday, Feb. 29 — Southeast Community Center, 4201 E. 63rd St., Kansas City, MO 64130
- 11:30 a.m. — Tuesday, March 3 — KC Health Department, 2400 Troost Ave., Kansas City, MO 64108
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