Although venture capital in Kansas City has seen an upward trend, there is still a weak spot when it comes to early-stage funding. After working for Sprint Accelerator for three years, serial entrepreneur John Fein was tired of seeing fundable companies move away from Kansas City after not being able to receive funding at an early-state, mostly due to investors seeing a high-risk at the early stage.
According to the Kansas City Business Journal, KC isn’t the only city seeing this trend. Cities such as Detroit, San Antonio and Cincinnati are all facing similar issues. Historically, the Midwest hasn’t been known as a hotspot for tech. The Midwest has produced successful companies in banking, real estate, agriculture and transportation, so many investors see a higher risk when it comes to funding tech startups.
As a result, Fein has launched a new venture capital fund called Firebrand Ventures that targets capital-efficient software and internet startups in the Midwest region, with a focus on Kansas City. Firebrand Ventures brands itself as a “very different kind of venture fund” in that it connects startups and entrepreneurs to valuable resources, including mentors, and it strives to be exceptionally transparent by providing simple “yes” or “no” answers to entrepreneurs.
Steve Roatch, CEO of Twentyseven Global, plays an active role in the startup community of Kansas City and is an angel investor. He’s helped many technology startups get off the ground with his involvement in SparkLabKC, Digital Sandbox, Mid America Angels, and Cultivation Capital.