5 takeaways from most entrepreneurial city report

A report analyzing progress on Kansas City’s goal to become America’s most entrepreneurial city highlighted a trove of information on the area’s early-stage business community.

KCSourceLink’s second-annual “We Create KC” report dissects the metro’s entrepreneurial ecosystem, including its headway toward realizing a challenge to become the nation’s most entrepreneurial city.

Expounding on such metrics as jobs created, capital invested and the area’s fastest-growing firms, the 24-page report measures the progress on six specific missions set by area organizations. The missions — such as telling Kansas City’s story, building entrepreneurial talent, engaging the corporate community and maximizing resources — aimed to create tangible goals for the community at large.

“We are headed in the right direction,” said Maria Meyers, director of the UMKC Innovation Center and founder of KCSourceLink. “It begins with having the right conversations about our entrepreneurial community needs and how we can move forward. I think there is a deeper understanding of issues that drive entrepreneurship, especially those around access and availability of capital, which is one of our biggest issues in Kansas City.”

Meyers said that the information in the report not only helps her organization bolster the area economy, but also the metro as a whole.

“This is the first time we’ve ever had data like this — data that really lets us get to the nuts and bolts of what’s happening on the ground,” she said. “This gives us a view of Kansas City entrepreneurship and the issues that will move us forward that we’ve just never had before. I hope we can use this view to chart what works, what doesn’t and to see how we can fill the gaps.”

Here are five key takeaways from the report:

1. Kansas City women and minorities are taking advantage of the area’s microloan program. Since 2012, the KC Regional Microloan Fund has awarded more than $3 million via 262 microloans, which allow businesses that don’t qualify for bank loans to access capital to grow. Women accessed 59 percent of the loans — which averaged about $11,000 in value — and minorities tapped about 45 percent. The report estimates the loans resulted in about 800 jobs in the area.
2. STEM Job growth in Kansas City is outpacing the nation. The Kansas City metro created more than 60,000 STEM jobs in 2014, which is 7 percent above the national average. Computer-related job postings have grown 52 percent in Kansas City since 2014, while mathematical science job opportunities have increased 49 percent.
3. Equity investments have increased dramatically in the last five years. The number of investments in early-stage firms has more than tripled in the last five years. Preseed and seed funding deals — which range from $50,000 to $1 million — have seen the largest amount of growth in the metro, with about 50 total deals in 2014.
4. Missouri startups snagged more deals in 2014, but Kansas deals were bigger. A majority of the beneficiaries of preseed funds were based in Missouri, while Kansas firms raised more Series A funding deals, which range from about $1 to $3 million.
5. At least 25 startups in Kansas City have gained serious traction. C2FO, EyeVerify, DivvyHQ and 22 other early-stage ventures raised several funding rounds in 2013 and added another round in 2014. Sixteen percent of the businesses are in the IT sector, 15 percent in food and 12 percent in education.