As we get ready to close the book on the year that was 2013 and look forward to the year will be in 2014, I’d like to take the opportunity to present a few things that I’d like to see come together for the Iowa startup community. This is the second of three posts aimed at different segments of our community: startups, investors, and media.
Investors - we need more of you.
Based on the conversations that I’ve had with founders in our state, it easy to say that “lack of access to capital” is the single biggest issue holding back our startup community. It was the biggest issue when I moved home to Iowa in 2009 and its still the biggest issue in 2013. My wish is that we can do something about it in 2014. Here’s a few ideas:
First, we need more investors to self-identify so that startups can find them more easily. The formation of the Plains Angels group in mid-2012 was a start and at least there is now a defined path to get an audience with them. However, by design, that group doesn’t release any identifiable information on its members or their investments so it’s more mysterious than it could be (should be?).
AngelList is a great way to identify investors globally but the current (admittedly incomplete) list for our state only shows ten or so Iowa-based investors who have backed local startups. The fact there are ten in their directory is a good first step but realistically we need to see that number grow tenfold.
Second, we need venture capitalists from the established markets on the coasts to invest in Iowa companies and raise the profile of our community. I was so hopeful that Union Square’s 2012 investment in Dwolla (Des Moines) would kickstart this behavior that I publicly predicted it. While Dwolla did it again this past year we haven’t, yet, seen it consistently from others. I doubt that it has anything to do with the quality or viability of the startups here (I’ve heard several people say of one local startup “if they were building that company in San Francisco they’d already be funded”) and I wonder if we’re not doing enough to maintain our connections to those communities. Dwolla founder Ben Milne’s travel ahead of those capital raises was well known and maybe that’s what’s missing. To borrow/paraphrase the advice of 5by founder (and I/OWA conference keynote speaker) Greg Isenberg:
Finally, we need startups here to exit and create wealth that can (and needs to be) reinvested in the startup community. This is the the Holy Grail of startup community building: the moment that people who understand technology startups in Iowa and are committed to technology startups in Iowa have significant money in their pocket because of technology startups in Iowa is the moment that we’ll see investment speed up considerably.
Look for the last post in this series (Media) on Monday.
Photo Credit: nicolopaternoster on Flickr