New investment fund would encourage small business growth in Columbia

Local tech startups could see a financial windfall in the near future.

Business experts at places like the Missouri Innovation Center, REDI, the University of Missouri and the city of Columbia are finalizing a way to financially support newly created businesses in the area to get them up and running.

“If you don’t have these programs a lot of those ideas are going to go places where they can get that type of funding,” saidSteve Wyatt, the associate vice chancellor for economic development at the University of Missouri. “This allows us to help them get planted here and hopefully develop really deep roots in our community so it can reap the benefit of that.”

They’ll award between $25,000 and $100,000 to several different entrepreneurial efforts with the use of the newly created Missouri Innovation Accelerator Fund.

“What we want to do is help those early stage companies start,” Wyatt said. “That early-stage capital is really hard for them so this accelerator fund has been a collaborate effort of the city, the university, a lot of individuals in the community all coming together to create a fund.”

The city of Columbia recently pledge a few hundred thousand dollars it had set aside for this purpose. It will combine those funds with the other funds from the university and private individuals. The fund is expected to have about a million dollars to use.

Bill Turpin, the president and CEO of the Missouri Innovation Center, graduated with an engineering degree from the University of Missouri and has spent more than 30 years as a serial entrepreneur. He was the founding CEO of four startups and a senior executive at different companies that include Netscape.

Turpin said he came back to Columbia from California two years ago and has been working to revitalize the city’s entrepreneurial base ever since.

“Columbia has centennial investors and that does a good job for middle stage companies but there was really nothing in Columbia for early stage companies,” Turpin said. “We were losing companies to St. Louis, Kansas City or farther away. Or no one was starting a company because it was too hard to get funding for a really early-stage company.”

Turpin and Wyatt said the fund functions as more of an investment, not a loan.

“If there’s an event where we can cash out or a lot of times it can be bought out, there will be a return to the fund,” Wyatt said. “The fund will distribute the profits depending on how much was the investment, so there will be a payback to the investors.”

Turpin said they will probably invest in many different local businesses because one or two businesses out of 10 are huge successes and would mean that they would get back sometimes more than they invested.

He said they’re also using “impact investing.”

“This fund does good in two ways because it helps the local economy but it also makes the world better,” he said. “Hopefully the companies we’re investing in do good things as well.”

Both Wyatt and Turpin said they believe with investment funding as an option, it might encourage many businesses to stay and boost the economy.

“They’re going to buy buildings, hire people, buy services all those sort of things that help the local economy,” Turpin said. “You have to grow them locally.”

They hope to award some of their first investments in the fall and so far tech businesses (computers, software development) will be the only area of focus. Eventually Turpin said they might expand if they see success with this current fund.

Turpin said he expects to spent several years growing the entrepreneurial base in Columbia.

“Nothing happens all at once,” he said. “It’s our starting point, I think.”