It’s easy to see why startup founders look to the coasts to raise venture capital or hire a star head of growth. Hollywood has misinformed the masses that startups don’t exist outside of these ecosystems. The notion that founders need to migrate to the Valley in order to successfully build a technology company is long outdated. Garmin and Cerner were both born and grown in KC.
So, what does the center of the United States have to offer startups? I’m not too sure about the startup scene in Lebanon, Kansas (the actual center of the U.S.), but a mere four hours away in Kansas City you may be surprised by the growing startup scene.
Kansas City is marinating startups in funding, networking, and hiring opportunities to beef up the city’s startup infrastructure. While Chicago came out on top in TechCrunch‘s list “Best startup cities in the Midwest,” KC Tech Council president Ryan Weber tells Startland News he believes Kansas City’s closest rival is Minneapolis, a city he believes his will eventually overtake.
Today Kansas City looks much different than the startup community I left behind in 2013. When I returned in January, I had no idea if I would find founders of scalable companies in my backyard and was even more surprised that experienced local individuals were investing. Due to the hard work of Brad Feld and Steve Case, there is a real belief in the Rise of the Rest, the idea that high-growth companies can now start and scale anywhere, not just in a few coastal cities. The support system that came from this has attracted Midwest and coastal-based angel investors to the city, 89 of which mentor startup companies at Techstars KC.
Let’s look more closely at what Kansas City has to offer startups.
Whether you’re looking to start a new venture from scratch or hire team members to further your company’s mission, Kansas City has plenty of opportunities to meet the right folks:
- 1 Million Cups — Every Wednesday at the Kauffman Foundation
- “An event for local entrepreneurs to meet and present their startups to the thriving peer network of founders in Kansas City.”
- KC Roundtable — Every other Thursday at Eggtc.
- “A group of 20 and 30-something Kansas City entrepreneurs who meet regularly to support and collaborate on each other’s businesses.”
- Venture Lounge — Every month at various locations
- “A non-profit organization dedicated to connecting entrepreneurs to the resources they need to grow and scale.”
- Kansas City Women in Technology — Every month at various locations
- “A grassroots organization helping to grow the number of women in technology careers in Kansas City.”
Along with Techstars’ Kansas City accelerator program, there are a plethora of additional opportunities to engage with the startup and corporate community in the city. Startland News offers a great calendar of events surrounding KC’s entrepreneurial ecosystem, so if you’re in town, come meet up.
According to Crunchbase, Kansas City has seen at least 93 seed, angel, VC and equity crowdfunding rounds, totaling about $192 million, between January 2015 and July 2017.
Blooom, ShotTracker, PopBookings, PayIt, and Bardavon are a few examples of companies based in Kansas City that have raised over $1 million apiece (in some cases much more) during the past 12 months. There are a variety of different national funding sources in these deals, further proving that venture capital will invest wherever innovative companies are based.
For example, Blooom’s series B was sourced from investors in Minnesota, Atlanta, Virginia, Ohio, and San Francisco, on top of local investors. Investors from across the nation are looking for a piece of the action.
Kansas City tech startups also punch above their weight in the number of jobs they’ve created. According to KCSourceLink, startups in the area have created over 16,000 jobs every year since 2012.
The report also states that startups created 7.7 percent of all jobs in the city in 2016. And these jobs tend to be high-paying, with average pay escalating from about $37,000 to $52,000 per year. Compared to the average wage of $44,000 per year, the Kansas City startup scene is moving quickly to continue the upward trend in job creation.
In 2012, Kansas City became the first major U.S. city to receive Google Fiber, which offers gigabit internet speed. The high-speed internet not only solidified Kansas City as a permanent home for larger companies, but it also attracted additional players to see what Kansas City had to offer.
Virgin Mobile USA selected Kansas City as the location for its new headquarters in 2016. Virgin Mobile USA CEO Dow Draper considered bringing the company to Seattle, but the low cost of living was the final factor that solidified the move to Kansas City.
Other major tech companies in the market include Honeywell, General Motors, DST Systems, Garmin, Cerner, and Ford Motor Co.
More than just BBQ
Kansas City has more to offer than baseball and BBQ, and anyone who has spent a weekend in the city can feel the energy. But if you’re looking for BBQ startups, we have those too.
While Kansas City might not compare in size to a startup ecosystem like Chicago, the city’s rapid growth in tech jobs and VC funding will continue to increase our clout in the worldwide tech rankings. But just like BBQ, the longer wait time, the better the outcome. We may have a ways to go in Kansas City, but we’re used to waiting for the good stuff. Every week I am contacted by someone new who is returning to KC from the coast or I am introduced to someone new who is moving to KC. Our mentors at Techstars KC are the proof that there are super experienced individuals in our ecosystem, and together we are growing the future.
Lesa Mitchell is the managing director of Techstars Kansas City.