A “huge issue,” MacLellan said, is establishing a seed fund to help startups. Often, entrepreneurs with ideas need a small amount of capital to test the viability of their idea before they can take it to the bank for a loan or raise investment capital. MacLellan said a fund that could provide seed money in the $5,000 to $30,000 range would be a big boost for local entrepreneurs.
Regional Economic Development Inc. plans to shift most of its emphasis from establishing tax abatement programs and attracting new businesses to a focus on fostering entrepreneurs and growing startups.
REDI, a public-private partnership funded by local government, the University of Missouri and private businesses, including the Tribune, is in the midst of writing a strategic plan, expected to be complete in August. Committee Chairman Jeff MacLellan said its five members want REDI to put the majority of its focus — 51 percent — into fostering local entrepreneurship. The group previously spent about 30 percent of its staff time and financial resources on entrepreneurship, MacLellan said.
The committee will recommend REDI spend 20 percent of its time on attracting new businesses, down from 25 percent. The committee wants REDI to reduce from 25 percent to 10 percent the time and effort it spends on business climate, which involves setting up local tax incentives such as a Chapter 100 Bond policy and the current effort to establish an enhanced enterprise zone. REDI should spend 10 percent of its time retaining and helping existing businesses grow, down from 15 percent, according to MacLellan’s report. The rest of the time and money is what it takes to run the normal administrative functions of the office.
“It’s a strategic shift in resources,” MacLellan said in an interview earlier this month. “We will still … be interested in the other” economic development strategies, “it’s not like we’re going to abandon them.”
Since REDI Director Mike Brooks became president of the organization in 2009, the group has become more involved in the local startup community. REDI has helped coordinate events such as the annual Entrepreneurial Summit and “economic gardening” gatherings, which offer local innovators a place to network and learn about community resources. When it built its new offices in the parking garage at Fifth and Walnut streets, REDI paid for office space for the Small Business Technology Development Center, which offers business counseling services.
The organization also is opening a collaborative workspace in its offices, where entrepreneurs can work side-by-side with like-minded people. Set to open soon, the space will be operated by The League of Innovators, which offers similar workspace for startups at the Museao Building on Buttonwood Drive.
One idea to grow local startups is to give out “CoMo Bucks,” which would entitle people to free advice and counseling from professionals such as bankers and lawyers who could assist with the nuts and bolts of starting a business. The committee also wants REDI to build a stronger database of resources for entrepreneurs and set up a mentor program with local business people and retired professors.
A “huge issue,” MacLellan said, is establishing a seed fund to help startups. Often, entrepreneurs with ideas need a small amount of capital to test the viability of their idea before they can take it to the bank for a loan or raise investment capital. MacLellan said a fund that could provide seed money in the $5,000 to $30,000 range would be a big boost for local entrepreneurs.
Brant Bukowsky, a REDI board member and a founder of Veterans United Home Loans, said in an interview earlier this month that a startup fund is an idea he hears often. The cost of starting a business has gone down, he said, and a little money upfront can lead to a high-growth company later.
“Some people still think you need $100,000, $150,000, $200,000. … They just need to understand they need to get some progress on the idea and validate the concept,” Bukowsky said.
