St. Louis Regional Chamber transforming region via entrepreneurism
By ALAN J. ORTBALS
The year 2015 was a banner one for entrepreneurism across metro St. Louis, said Jason Hall, vice president of entrepreneurship and innovation at the St. Louis Regional Chamber.
It was a strong year for both capital formation and deployment; great things happened in mentoring and fostering entrepreneurial growth; and St. Louis received widespread national recognition for all that’s been achieved.
Last January, Popular Mechanics recognized St. Louis as the top city on the rise in burgeoning entrepreneurism. Later, CB Insights, an analytics firm that tracks the world’s most promising private companies, their investors, their acquirers and the industries they compete in, revealed that St. Louis had the largest percentage increase in growth of venture capital of any city in the world.
And, just before the end of the year, DataFox, another business analytics firm, named the St. Louis region as the ninth best place to create a startup business, placing it above cities like Austin, Texas, Charlotte and Raleigh, N.C., that enjoy strong reputations for entrepreneurial environment.
“Those are quantitative assessments that reinforce and recognize the work we’re doing with the business plan competitions, the mentoring programs, the capital formation and the infrastructure to support them,” Hall said. “When you put it all together, 2015 was a banner year.”
Hall said that earlier spadework paid off with both the formation and deployment of large capital investments last year. Some $340 million was invested in new ventures in 2015, and one of the single largest venture capital firms in the Midwest, Lewis & Clark Ventures, was formed. Lewis & Clark Ventures is a new, St. Louis-based venture capital firm focusing on high potential investment opportunities throughout the Midwest region. The mission of the fund is to deploy series A and B stage growth capital into companies operating within sectors that include software devices and life sciences, and serving markets such as financial, agricultural, healthcare, and business enterprise solutions.
Express Scripts recently came on board with a record corporate commitment of $25 million to the Lewis and Clark fund. It’s the first time that Express Scripts has ever made a venture capital commitment like that, according to Hall.
“When we see sophisticated money like that being formed and invested here,” said Hall, “you know it’s because the underlying fundamentals are solid.”
Once again, the St. Louis Regional Chamber sponsored the Metro East Startup Challenge.
“They inspire people to take that leap to create a business,” Hall said. “It creates a focal point to take their idea; compete for funding; get feedback. We saw a huge participation in the Metro East Challenge last year.”
Hall said he was excited by the creation of the Pier 51 business incubator in Belleville that opened new capacity for co-working space.
But, one of the most exciting developments in metro St. Louis last year, according to Hall, was the creation of the Midwest Cyber Center of Excellence near Scott Air Force Base.
“The Cyber Center will leverage off of everything that Scott Air Force Base means for technology and cyber,” Hall said. “We were very involved in doing the underlying research to make the case that this region — and particularly anchored by Scott Air Force Base — could support a cyber center of excellence.
“We looked around the country and examined best practices and now we’re looking at the next steps. It’s really leaning in to one of this region’s strengths — our sixth-largest employer is Scott Air Force Base. It’s a leader in cyber and we’re going to leverage that to go deep into that particular sector of technology, starting first with workforce development.”
The longer-range plan, Hall added, “is to make the Scott area known as the place to go for cyber startups.”
Looking ahead, Hall says 2016 is going to be a big year for corporate engagement. He’s working on building stronger partnerships and connectivity between some of the area’s larger employers and startups. That effort is being manifested in a new program called CEO2CEO in which CEOs of large companies are paired with startup CEOs to foster relationships and partnerships. The first CEO2CEO event kicked off with George Paz of Express Scripts and Abby Cohen, co-founder of Sparo Labs, which developed a new device to manage asthma. That event attracted national attention from Forbes magazine.
Last month, the second CEO2CEO event brought together Ward Klein, the chairman of the board of Edgewell Personal Care Co., and Dr. Agnes Scoville, M.D., the 2015 winner of the Metro East Start Up Challenge. A veteran and an ER physician, Scoville and her husband created Pacidose, a medicine dispenser for infants. Hall said he’s found that both parties benefit from the exchange.
“It’s a two way street because the startup CEO not only learns from someone who has experienced great success, but our largest employers can also learn how industry and technology is changing business by looking at it through the eyes of a startup,” Hall said. “That’s going to be a big theme for 2016.”
It was not long ago that St. Louis was thought of by many as an area that was closed to new ideas and new ventures. But, that’s all changed, said Hall.
“We have leapt to the top very quickly,” Hall said. “It has surpassed even what I thought was possible. My sense always was that there was a lot of untapped potential here. By creating infrastructure; by celebrating entrepreneurism in the news; by making it clear where you can go to get funding and support, it’s become easier for people to take the next step. That’s economic development in the modern era.”
Hall said the old model of economic development was to use incentives to try to attract existing businesses to relocate or expand to your community. That has changed, he said, to a “new growth” strategy. Now, St. Louis is developing a reputation as a strong entrepreneurial environment.
“With the capital and support and corporate engagement that entrepreneurs can get here, we’re recruiting people rather than businesses and the businesses are following the people,” he said.
It’s all about “creating more pies rather than just reallocating the pie,” he said.
“Company creation is inherently collaborative, and it has a very positive effect on the region,” Hall said. “We face challenges in fragmentation as a region but this is one of those areas where one plus one can equal three. I have confidence that we can overcome some of the traditional challenges because the startups are going to lead the way. I think they are creating a region in their image and that has me incredibly excited.”