Open letter to KCMO: Entrepreneur community makes 0.1 percent budget ask ‘for backbone of our economy’

Editor’s note: The following open letter was produced independently of Startland News by a coalition of small business and entrepreneur support leaders and signed by more than 210 members of Kansas City’s startup and business community. The opinions expressed in this commentary are the authors’ alone. The signatories are provided courtesy of the authors.

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Mayor Quinton Lucas and KCMO City Council,

We’ll be honest, we don’t envy your position given the difficult decisions in front of you. The budget priorities you are looking to fund in the name of equity and inclusion are admirable — free public transportation, affordable housing, and public safety. We too would like to see them become a reality because we too are deeply passionate about building a more equitable community.

Women and minority-owned businesses struggle to access capital at the same rate as white and male-owned businesses. The average revenue growth rate of minority-owned businesses in this region lags that of white-owned businesses. Adding to the urgency to address these issues, communities of color in this region are projected to grow faster than almost any other region in the country over the next 20 years.

For these reasons, equity is not only a societal imperative. It is an economic imperative.

We — a united Kansas City entrepreneur community — are writing to you today because funding community services should not come at the expense of small businesses and entrepreneurs — our city’s primary job creators and renewable source of the tax revenues needed now and into the future to fund impactful community services.

Our ask is for 0.1 percent of the 2020-21 budget to support small businesses and entrepreneurs.

We find that it can sometimes be difficult to understand just how much struggle, sacrifice, and risk go into building a business, as well as the impact entrepreneurs have on the community. We hope this letter provides some good context and serves as a catalyst for further conversation.

The reality is entrepreneurs often risk their homes, strain their family life, max out credit cards, sacrifice friendships, and forgo sleep to follow their passions and create change in their community and world. Statistically, about half will fail, but many will beat the odds and build companies that employ neighbors, inspire those around them, positively impact our city and maybe even become the next iconic Kansas City brand. Yet, entrepreneurs don’t ask for much.

Between 2014 and 2018, entrepreneurs — new firms with fewer than 20 employees — created 75,359 new jobs equating to 58 percent of all net new jobs in the Kansas City metro over that time. In 2018, all companies with fewer than 20 employees plus early-stage companies with more than 20 employees contributed $37.6 million in earnings taxes alone — 13.9 percent of the total earnings tax revenue — not to mention the many other taxes and fees they paid. This number is near 25 percent when considering small businesses under 100 employees.

Despite this, the updated proposed budget shrinks the already meager funding for small business and entrepreneur support efforts outside of KC BizCare operations — KCSourceLink, LaunchKC, OHUB, and the Urban Business Growth Initiative (UBGI) — from $470,160 to $251,667, a 46 percent decrease. City funds were leveraged at least 1-to-5 by all of these programs to garner more funding and there are many other programs that would do the same.

Additionally, the 46 percent decrease doesn’t include the elimination of $300,000 supporting the Keystone innovation district. In total, that is a $518,493 reduction in entrepreneur and innovation support efforts outside of KC BizCare, which itself provides critical small business services and needs a larger operating budget to grow it’s efforts.

It is especially notable that the defunding of support for our most prolific job creators comes on the heels of the $35 million Waddell & Reed incentive package that included the diversion of Economic Activity Taxes.

Also notable is that despite a nearly half-billion-dollar smaller budget, Johnson County committed $682,000 to support entrepreneurs in 2019. Over the past 10 years, they calculated a whopping $694,768 return on every $1,000 invested. And Topeka, despite only having a $96.5 million budget, has allocated $500,000 annually to support entrepreneurs or 0.5 percent of their budget. 0.5 percent of KCMO’s budget is $8.65 million.

Can you blame us for feeling under-appreciated and under-valued?

If we truly want to be the Most Entrepreneurial City in America as many civic leaders have proclaimed, it will absolutely require support from our city.

Our ask is 0.1 percent.

KCMO funding has supported countless entrepreneurs of all types; high-tech to no-tech and high-growth to lifestyle. Here are small sample of the companies KCMO funding has supported:

1. Potion Yarns has scaled online, routinely exceeded quarterly goals and increased profitability by over 10 percent thanks to Entrepreneurial Mindset Training made possible through UBGI attributed founder Johanna Miller.
2. Bungii — which has now raised over $13 million and currently employs 30 Kansas Citians — was a recipient of a LaunchKC grant which “was the thing that kept Bungii’s doors open thru some tough times,” said co-founder & CEO Ben Jackson.
3. Empire Highrise USA is expected to grow its team by 50 percent in the next year and 150 percent in the next three thanks to guidance from the ELEVATIONLAB Growth Venture made possible by UBGI which has helped owner Jorge Aguilar mindfully expand his operation.
4. BacklotCars — which now has 180 employees, raised over $38 million and recently leased the entire 11th floor of Lightwell — was invested in by the KCRise Fund thanks to a chance meeting at a KCInvestED dinner, a program of KCSourceLink.
5. Ladybird Style Lab & Salon at 503 Southwest Boulevard likely would not have gotten off the ground if it weren’t for multiple ELEVATIONLAB courses made possible by UBGI according to founder Molly Bingaman.

And this is only the tip of the iceberg. For more insights into the impact of Kansas City entrepreneurs, see KCSourceLink’s 2019 We Create KC report and Startland News’ 2019 Top VC-Backed Companies list.

So, if we want more jobs, let’s not take our small businesses and entrepreneurs for granted.

We challenge you to dig deep and think creatively to find 0.1 percent to support Kansas City business builders. They are, after all, the backbone of our economy and a major reason we are able to fund the impactful community services in this and future budgets.

And finally, this letter obviously puts the focus on you as KCMO leaders but this challenge extends to all Kansas City institutions and corporations especially those that have a stated focus on small businesses and entrepreneurs. Actions speak louder than words.

We stand ready to collaborate however possible to make Kansas City the Most Entrepreneurial City in America.

It takes a village!

Sincerely, the Kansas City entrepreneur community

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Signed by:

(If you would like to sign, click here.)

Adam Arredondo, Co-Founder & CEO, STARTLAND (formerly Kansas City Startup Foundation)

Eze Redwood, Founder, Twenty30CEO

Danny O’Neill, Bean Baron, The Roasterie

Christine Kemper, Founder, Kemper & Company LLC

Bill Gautreaux, Managing Partner, MLP Holdings LLC

Neal Sharma, Co-Founder & CEO, DEG

Jeffrey J. Jones II, President & CEO, H&R Block

Lenora Payne, Founder & CEO, Technology Group Solutions (TGS)

Darcy Howe, Founder & Managing Director, KCRise Fund

Ron LeMay, Managing Director, Open Air Equity Partners

Toby Rush, Founder & Entrepreneur

Tim Barton, Founder, Edison Factory

Jeff Simon, Office Managing Partner, Husch Blackwell LLP

Thalia Cherry, Founder & CEO, Cherry

Marshall Lockton, SVP, Lockton Companies

Harry Campbell, Founder, Outlook Partners

Anita Newton, Co-Founder, MightyGood Solutions

Victor Hwang, Founder & CEO, Right to Start

Greg Kratofil Jr., Kansas City Co-Office Managing Partner & Chair of Technology Transactions Practice Group, Polsinelli PC

Alan Lowden, Chief Information Officer, H&R Block

Elizabeth Solberg, Chief Executive Officer, Communications Partners LLC

Mary Jeannine Strandjord, Director on Corporate Boards

Entrepreneur community leaders:

Ruben Alonso III, President, AltCap

Susana Bruhn, Founder & Director, GUILDit

Lauren Conaway, Founder & CEO, InnovateHER KC

Kevin McGinnis, President & CEO, Keystone Community Corporation

Dan Smith, Co-Founder, The Porter House KC

Dennis Ridenour, President & CEO, BioNexus KC

Donald Hawkins, Founder & CEO, Griffin Technologies and Co-Founder, KC Collective

Bo Lais, Founder & CEO, Lula and Co-Founder, KC Collective

Matthew W. Marcus, Co-Founder, STARTLAND

Davin Gordon, Business Development Officer, AltCap

Quest Moffat, Founder & Digital Mercenary, Block Knowledge (ProjectUK)

Xander Winkel, Executive Director, Ennovation Center

Jeff Shackelford, President & CEO, Enterprise Center in Johnson County

Melissa Vincent, Executive Director, Pipeline Entrepreneurs

Lyndon Breckenridge, Ecosystem Development Lead, OHUB.KC (Opportunity Hub)

Tim Denker, Chair of the Board of Directors, Velocity Lee’s Summit, Inc.

Megan Adams, Founder & Manager, Firebrand Collective

Terri S. Turner, Founder & President, Kansas City Coworking Alliance

Morgan Perry, Business Outreach Specialist, Mid-Continent Public Library

Entrepreneurs & small business owners:

Harrison Proffitt, Founder, Bungii

Gerald Smith, Founder & CEO, Plexpod

Davyeon Ross, Co-Founder & President, ShotTracker inc

Matthew Condon, Founder & CEO, Bardavon Health Innovations

Erika Klotz, Co-Founder & CEO, PopBookings

Bo Nelson, Owner-Operator, Thou Mayest

Justin Davis, Founder & CEO, BacklotCars

Blake Miller, Founder, Homebase

Bek Abdullayev, Founder & CEO, Super Dispatch

Chris Cheatham, Founder & CEO, RiskGenius

Chris Costello, Co-Founder, blooom

Jeff Rohr, Founder & CEO, SquareOffs

David Embry, Co-Founder & CEO, Mylo

Ben Jackson, Co-Founder & CEO, Bungii

Chris Brown, Founder, Venture Legal

Zarif Haque, Founder & CEO, DRAIVER

John Boucard, Founder & CEO, Tesseract Ventures

Brad Sandt, Founder, President & CEO, Menlo, Inc.

Luke Einsel, Founder & CEO, Thirsty Coconut

Mark Davis, Co-Founder & Chief Data Officer, realquantum

Doug Burris, Co-Founder, Growth Acceleration Services

Brett Posten, Co-Founder & Principal, Highline Partners

Matt Sellers, Co-Founder & CEO, Rack Performance

Hugh Khan, Principal, Highplume, LLC

Stacey Johnson-Cosby, Founder, Real Estate Investor & Real Estate Sales, ReeceNichols Realtors

Tammie Wahaus, Founder and CEO, ELIAS Animal Health

AY Young, Founder, Battery Tour & AY-MusiK

Matt Watson, Founder & CEO, Stackify, LLC

David Biga, Founder & CEO, Particle Space

Thuong Ngjyen, Co-Founder & COO, Lean Start Lab

Mark C Ferrel, Founder & CEO, Amanda Blu & Co.

Casey Reyner, Owner, Casey Reyner Arts

Anurag Patel, Founder & CEO, Helix Health, LLC

Pierre Barbeau, Co-Founder & CEO, Moblico

CaRessa Hutchinson, Founder, ModRN Health

James L Bogle, Owner, Just In Time Consulting

Dr. Saroj Gupta, Founder & CEO, Asuun and Interacshn

Shekhar Gupta, CTO, Interacshn

Julie Cortes, Founder, The Freelance Exchange Of Kansas City

Joshua Montgomery, Founder & CEO, Mycroft AI

Andrew Kallenbach, Founder & CEO, LendingStandard

Ricardo Dimarco Bare, President, The 816 Technology Company

Lauren Lawrence, Founder, Stenovate

John Rake, Founder, GorillaBot Labs

Isaac Collins, Owner, Yogurtini

Lisa Ragan, Founder & Owner, Safely Delicious, LLC

Michael H Fry, Co-Founder & CEO, Brown Button Estate Sales

Kaitlin Abdelrahman, Co-Founder, The Souk/Global Caravan

Jeff Evans, Founder, Mean Mule Distilling Co

Steven Coen, Founder & CEO, SaRA Health

Jillian Carlile, Founder, TravelHive

Rachael Qualls, Founder & CEO, Venture360

Glen Dakan, Co-Founder & Managing Partner, Liquify Group

Delvin Higginson, Founder & CEO, Relay Trade Solutions

Mishawnda Mintz, Co-Founder & CEO, WhatupHomee LLC

James Mintz, Co-Founder & COO, InvestMintz Properties, LLC

Larissa Uredi, Co-Founder & CEO, No-Where Consultants

Crystal Sheffield-Baird, Founder, Crystal Clear Storytelling

Lyndsey Gruber, Founder & CEO, PEPPR LLC

Erin Zimmerman, Founder & Visibility Strategist, EZ Visibility

Allison Berey, Founder & CEO, M:CALIBRATE

Edna Martinson, Co-Founder, Boddle Learning

Catina Taylor, Founder, Dreams Consulting

Sarah Shipley, Founder & CEO, Shipley Communications LLC

Kiersten Firquain, Co-Founder, Happy Food Co

Jordan Williams, Founder & CEO, Keefe Cravat

Kim Naramore, Co-Founder, TravelHive

Katie Mabry van Dieren, Owner & CEO, The Strawberry Swing (SSICF, LLC)

Tony Caudill, Founder & CEO, aware3

Adam Herbig, Founder & Owner, DigBig

Katherine Alsip, Co-Founder, ThriveOn Concepts LLC

Parker Graham, Co-Founder & CEO, Destiny

Sheryl Vickers, Founder & CEO, Select Sites and CRV LLC

Gwendolyn & Debra Washington, Owner & Manager, Wanna Scoop Cafe & Ice Cream

Heather Spalding, Co-Founder & CEO, Cambrian

Joel Teply, Co-Founder & CTO, Cambrian

Sunny Sanwar, Founder & CEO, Dynamhex

Neelima Parasker, Founder, President & CEO, SnapIT Solutions

Ben Schultz, Founder & CEO, LaborChart

Brody Dorland, Co-Founder, DivvyHQ

Matt Moody, Founder & CEO, Bellwethr

David Hulsen, Co-Founder & COO, RFP360

Eric Tucker, Founder & CEO, Digital Baron, LLC.

Jeff Lynch, Founder & CEO, Idle Smart

Bruce Ianni, Co-founder & CEO, ShotTracker

Jay Peterson, Owner & CEO, Apex Energy Solutions

Mary Kay O’Connor, Founder & CEO, PatientsVoices, Inc.

Debra Washington, Co-Owner, 2 Washington LLC

Janay Reliford-Davis, CEO, Camp CHOICE, Inc.

Jeff Dunn DO/MBA, Founder & CEO, Redivus Health

Allen Gibson, Founder & CEO, CAPE Industries, LLC

Dominique Davison AIA, Founder, DRAW / PlanIT Impact

Rachel Clara Smith, Co-Founder & CTO, SquareOffs

Edgar Palacios, Founder, Latinx Education Collaborative

Teresa Dirks, Founder, Artist Teresa Dirks

Maxfield Kaniger, Founder & Executive Director, Kanbe’s Markets

Grant C. Gooding, Founder & CEO, PROOF

Stephen C. Wilson, Owner & Creative Director, WilsDesign

John Epperson, Co-Founder & VP Product, Retail Software Solutions Group, LLC

Edson Soriano, Founder & Managing Director, Parallel 42

Dustin Abercrombie, Founder & CEO, PreScreend

Laura Gilchrist, CEO, Kid Champions Consulting, LLC

Nick Yecke, Co-Founder, Picwood

Christopher Eads, CEO, Alphatech

John Bertrand, CEO, Daupler, Inc.

Reginald Gray, Co-Founder & Investor, Co-Founder of Black Privilege, Inc & Co-Owner of Sabor Latino Restaurant & Bar

Henning Schwinum, Co-Founder & Managing Partner, Vendux LLC

Lacey Ellis, Founder & CEO, Loom/LittleHoots

Roberto Pietrogiovanna, Manager, Legacy Fence

Matt DeCoursey, Co-Founder & CEO, Full Scale

Brian Kearns, Founder & CEO, CTEGig

Nicola Price, Principal, B2BC Mobile Tax & Solutions

Waira Mungai, Founder & CEO, Lume Lifestyle LLC

Dodie Jacobi, President & CEO, Dodiodo, Inc

Johnny Wolff, Founder & CEO, HomeRoom

David Bentley, Co-Founder & CEO, DEA-Media LP

Alec Grawe, Co-founder, SteerLyfe

Colton Ropson, Founder & CEO, Unscale LLC

Stuart Minshew, Founder & CEO, The Unleashed Startup

Jeffery T Kostos, Founder & CEO, Spear Power Systems, Inc.

Steff Hedenkamp, Founder, Owner & President, Red Quill Communications, Inc.

Pierre Yancy, Co-Founder & Managing Partner, Lumova Energy

Kwinton Scarbrough, Founder & CEO, PawConX, LLC

Hai Chen, City Director, House of Genius

Latoya Redick, Owner, RedickBeautyAffect

Brandy Archie, Founding Director, AccessAble Living

David Barnes, Owner & COO, Tallgrass Freight

Jeff Callan, Founder & CEO, Tyghtwyre

Heaven Hamilton, Founder, The Marketing Paralegal

Aaron Elyachar, General Manager, Elyachar Investments LLC

Jeffrey Weiner, Co-Founder & CEO, Realquantum

Luke Wade, Founder, KC Crew and LeagueAlly

Roberto Camacho, Founder & Managing Partner, Wobblrs

Tracey “the Safety Lady” Hawkins, Founder, Owner & CEO, Safety and Security Source, LLC

George T Brophy, Founder & COO, Ultimate LLC

Theresa Schekirke, Founder, Schekirke Consulting

Connie Campbell, Founder & President, Human Interactions, Inc.

Nicholas Franano, MD, President & CEO (both companies), Artio Medical, Inc. and Flow Forward Medical, Inc.

Oie White, Owner, I Brew Perfume

James McGee, Founder, Black Vine Worldwide Media Group, LLC

Grant Trahant, Founder, Causeartist

Robert Zhou, Founder & CEO, Big 6 Media, LLC

Kurt Van Keppel, CEO, KVK Consulting

Tim McCoy, Founder, Brands That Speak, a Yoodle company

Entrepreneur community members & supporters:

Matthew Mellor, Strategy & Development, STARTLAND

Jessica Powell, Director of Engagement, KC Collective

Stephanie Campbell, VP, Communications & Operations, Leanlab Education

María Miller, Engagement Manager, STARTLAND

Chad Feather, Associate, KCRise Fund

Ashwin Shashindranath, Managing Director, Evergy Ventures

Apurva Kasam, Product Manager, Super Dispatch

Kevin McPherson, Machine Learning Engineer, Bellwethr

Adam Rukin, Manager, Pepper IoT

Ivraj Seerha, Product Manager, Bellwethr

Nate Crosser, Business Analyst, The Good Food Institute

Nduulwa Kowa, Program Manager, OHUB.Campus, Opportunity Hub

Veronica Alvidrez, Experience Manager, STARTLAND

Elaina Brownlee, Community Manager, Spark KC

Tommy Wilson, Program Manager, LaunchKC

James Thomas, Vice President, Wells Fargo Bank

Hanna Taylor, Small Business Specialist, Mid Continent Public Library

Ethan Hutcheson, Wealth Manager, Metcalf Partners Wealth Management

Nate Olson, Director of Sales, Crema

Katie Kimbrell, Director of Education, STARTLAND

Wilson Horn, Associate Product Manager, Super Dispatch

Jeff Phillips, SVP, Landmark National Bank

Isaac Thibault, Sales Manager, Swell Spark

Sterling Douglas, SPM, Sony Music

Kirk Lakebrink, Senior Product Strategist, H&R Block

Hannah Lakebrink, Senior Campaign Strategist, Digilant

Jake Edwards, Project Lead – Municipalities & Non-profits, Fre3dom Interiors

Dustin Sollars, Career Navigator, Liberty Public Schools

Natalie Berigan, Product Manager, RFP360

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Authors’ note: Many other community leaders are supportive and would add their names if not for conflicts of interest.

If you would like to sign, click here.