Startup, investor, corporate worlds collide; Ron LeMay’s message for KC: Sit down and talk

Ron LeMay wasn’t willing to watch entrepreneurs flee Kansas City to build their game-changing companies on the coasts, he recalled.

“That’s a prescription for disaster over time,” LeMay, CEO of Main Street Data and managing director of Open Air Equity Partners, said of the way he viewed entrepreneurial progress in the City of Fountains as recently as four years ago.

“I wanted to provide some leadership to try and increase awareness of the quality of ideas and this market and willingness to fund those ideas,” he said.

LeMay’s interest in innovation and entrepreneurial support manifested into action over the course of two decades, he explained, noting how he’d worked to co-found October Capital — a family investment vehicle designed to provide seed funding to a diverse range of industries — alongside his son, Lance LeMay, in 1999.

“That’s 20 years ago now, but the combination of my activity with our portfolio companies and trying to accelerate the innovation and increase funding opportunities and canvassing the area … pretty much sums up my current activities,” LeMay noted, adding the effort sparked the idea for Open Air Equity Partners — where he’s committed to hands-on interactions with the fund’s portfolio companies, such as Pepper.IoT and C2FO.

Connecting the dots

Accelerating innovation is also LeMay’s goal with Main Street Data, a company dedicated to gathering precision data and using it to improve industries that have fallen behind the curve.

Eager to help, LeMay’s hands-on approach saw him ask the fund’s portfolio companies what they needed most from Kansas City — a strategy worth employing to further move the needle on innovation beyond the mark where it’s come to rest, he said.

“We had probably 20 entrepreneurs in the room. … The question I asked them is, ‘What do you need to be successful here?’” he recalled. “The answer was  … ‘We’ve got a lot of great ideas but no capital availability.’”

Sleeves rolled up and ready to find solutions in his sleuthing, LeMay called on Kansas City-area wealth leaders and explained the role they could play in bridging the gap and developing the city’s entrepreneurship pipeline, he said.

“The next day, literally, I had a meeting of some of the wealthiest individuals and family offices in the city. Wealth amounting to tens-of-billions of dollars. And my question was, ‘Why aren’t you investing in early stage businesses?’ And the answer was ‘There are no good ideas here.’”

Astounded yet satisfied, LeMay and his partners had identified a critical need with an easy solution: Ideators and funders need to talk, he explained.

“[By talking] we could connect the dots between people who had ideas and needed funding and those who had the capacity to fund them,” LeMay said. “We’re still working on that.”

Several initiatives have been born of the heart to heart, including the KCRise Fund — founded by Darcy Howe — LeMay noted.

“The KCRise Fund in particular is an effort to get people more acquainted with the opportunities in the Kansas City area. So they have a diversified portfolio of companies,” he said. “They only invest behind professional investors who really know what they’re doing.”

Additionally, the proposed Keystone Innovation District has served as the latest means for replenishing the well, LeMay noted, showing support for the Kevin McGinnis-led project near the historic 18th and Vine District.

A bridge to corporate KC

While a number of steps have been taken to further aid entrepreneurs and create runways for growth, there’s always more that could be done, LeMay said.

If Kansas City wants to see exponential acceleration in its entrepreneurial ecosystem, it needs to embrace corporate innovation, he explained.

“Frankly, that’s an area we’ve made less progress in than other spaces. … Entrepreneurs would tell me, ‘All I need is a contract with … pick your name. With Hallmark, with Cerner, with Sprint … whoever,’” he explained of the line of thinking many founders express.

LeMay’s dive into the financial and investment pool followed an array of senior leadership experiences — which included a seven-year run as president and COO of Sprint — where he first realized the need for a bridge between the startup and corporate worlds, he said.

In LeMay’s experience, Kansas City entrepreneurs believe corporate support could help them legitimize their ideas — enabling them to take their work a step further and potentially adding to the Kansas City pool of legacy companies, he clarified, noting the importance of regeneration.

Corporations often see startups as offering services, not needing a cash infusion, LeMay elaborated on the misconceptions many entrepreneurs he’s worked with have expressed to him through the years.

“I’ve been working with a number of the large corporations here, sharing with them the experience I had at Sprint,” he detailed of his conversations with some of Kansas City’s most-recognizable companies. “[In the 1980s], we were growing like crazy. As a consequence, I didn’t want to hire all the resources we needed as employees so I began to outsource — initially thinking it was all about cost reduction.”

What LeMay and his team at Sprint discovered was much more valuable, he said.

“The biggest benefit we got was insight into how smaller, more nimble, leaner companies operated,” he said

Such a realization has continued to serve as fuel in LeMay’s talks with Kansas City’s corporate leaders.

“I’m telling the larger corporations that there are huge benefits in working with these smaller companies because you’re going to learn a lot about business practices,” he explained of the value he sees in collaborating with startups, who don’t have a clouded view of their industry and could offer fresh perspective.

For Kansas City’s startup ecosystem to thrive, corporations have to be unafraid of stepping up with support, ending decades of bureaucracy and showing support to companies quietly building in their shadows, LeMay said.