ST. LOUIS — Few St. Louis entrepreneurs can rival the success of Jim Eberlin.
Within the past two decades, the St. Louis entrepreneur has launched and sold three St. Louis-born technology startups. But when Eberlin first sought capital to support his ventures, he had to travel hundreds of miles to find funding. It’s an experience he recounted recently at an event hosted by the Missouri Technology Corp.
“I had trouble raising money locally here, so I went to Silicon Valley,” Eberlin said. “It was kind of funny because the investors were like ‘Jim, a tech company in St. Louis? I don’t get it. You guys are known for beer.’”
For much of the past 20 years, startups have often harbored the notion that success meant tying your fate to Silicon Valley, whether it be through sourcing funding there or physically relocating. But the pandemic has served as something of a geographic equalizer. In 2011, Silicon Valley venture firms only invested $3 billion in startups outside of the Bay Area, New York and Boston. Last year, that figure grew to $13 billion, according to data from Washington, D.C.-based venture capital firm Revolution, and it’s projected to continue growing.
That creates an entirely new, and largely wide open, competitive landscape among metro areas that believe their startup communities have what it takes to be the next major tech hub. St. Louis, which in the past decade has experienced significant growth in startup fundraising, lucrative exits and the number of locally-based funding organizations, is certainly in the game. But so are dozens of other peer metro areas.
“Whether we like it or not, we are competing with them,” said Sam Fiorello, president and CEO of the Cortex Innovation Community. “It’s not just that we’re competing with Boston, San Francisco or San Diego, we’re competing with Indianapolis and Nashville and in the food and agriculture sector with places like Madison, Wisconsin, and Des Moines, Iowa. We have to remember that.”
Recognizing that the game has changed, the Business Journal sought to get a clearer picture of the competitive field with the goal of understanding how — or if — St. Louis stands out amongst its metro peers. In doing so, we reached out to Seattle-based financial data firm PitchBook, which offered us some insight on which data points would best be used to measure the health of a regional startup economy.