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As the St. Louis region continues to cultivate innovative founders, ideas and companies, the need for additional funding sources grows. We asked 10 St. Louis-based venture and private equity firms to comment on the gaps they see for our startups, what they consider when making investments and how they view St. Louis’ current funding climate.
Brian Matthews is Co-founder & Managing Partner of the Cultivation Capital Tech Fund.
From your perspective, what gaps do you see in local funding for startups?
To me, there are two gaps: The “preemie” gap for the ideation phase at $25,000-$50,000, and the “tweener gap,” a mid-seed round where a company has a little more revenue. This gap needs to be filled with $250,000 rounds.
What are some of your organization’s current focuses or goals?
Finding B2B SaaS companies with $50,000 or more in monthly recurring revenue growing at 10-20% month over month. We particularly like FinTech, AgTech and sales tech, but we’ll look hard at any company meeting those metrics.
When looking at potential companies in which to invest, what are the top three factors you consider?
Quality of the founders (mentorability is key), size of the opportunity, along with product, revenue and traction.
What advice do you have for founders seeking capital right now?
Keep your head down, control your burn and get to a product as quickly as possible so that you can talk to customers about product attributes and product/market fit.
Why should investors invest in St. Louis startups right now?
The cost to launch a business has become much more reasonable. Good ideas that come to market can scale much faster then ever before because of all the new social media marketing channels.
This article was published in EQ’s Spring 2016 issue.