SparkLabKC is a collaborative process, not just for the companies who complete our accelerator program, but also for the founders, mentors, and investors who work “behind the scenes” to make the program happen. Each piece of the puzzle is integral to our success and the success of our participants. The benefit of our program is apparent to the entrepreneurs who compete to be a part of each class, but what about our investors?
Investors are an important part of the SparkLabKC equation because they provide the funding for the accelerator companies. That usually means $18,000 per company plus the program expenses. Our investors in Class 1 and 2 come from many corners of Kansas City and from a variety of backgrounds. They are all accredited angel investors and know that their investment in the SparkLabKC companies is not much different than gambling. Their risk is shared across all 10 companies in each class. If some hit it big, they win… if some falter, they lose. That’s life in early-stage company investing. It’s a high-risk endeavor, but one that can reap many rewards beyond a healthy return on investment.
Why have so many Kansas City investors chosen to take a gamble on “a startup (SparkLabKC) that helps startups?”
In the case of SparkLabKC, I believe the reasons run much deeper than a simple return on investment. In recent conversations with our investors, I’ve found that profit is far from the primary motivating factor. Turns out there are many reasons they share their time and money with our accelerator companies.
One of the things I am most proud of is the community that SparkLabKC has created. Our sponsors, mentors, and startup founders have made the most of the ability to network, collaborate, and learn from each other. We have surrounded ourselves with a diverse group of intelligent and driven people who have a lot to offer. One of the greatest strengths of our community is their willingness to share knowledge and make connections.
One of our investors shared that he has “been able to gain exposure to interesting people and business ideas and make a couple of personal investments (beyond the SparkLabKC investment)” due to his participation in SparkLabKC. I love facilitating the kind of interaction that enriches both parties.
Another investor said, “The most interesting part to me is when the founder's passion meets the reality of all the challenges of positioning a company for success and seeing how they choose to respond.” He is describing that pivotal moment when great ideas collide with the harsh realities of the business world and the founders get the chance to respond in an innovative way. The excitement of witnessing new ideas grow and change is rewarding to all of us who are involved in encouraging and supporting these transformations.
One of the most common pieces of feedback from investors is that their involvement in SparkLabKC has led to greater awareness, interest, and excitement about the local startup community. It’s an energetic, dynamic part of the Kansas City business community.
I believe these young companies have a lot to give back to the more established enterprises in our community.Their enthusiasm and passion for innovation is infectious. The startup world offers an infusion of energy and talent to Kansas City’s economic landscape, and our investors are firsthand participants in making that happen. As our graduates find success, they too will contribute to the momentum and prestige of the Silicon Prairie and have their own chance to give back to the community that supported them from the start.
Invest in People, Not Ideas
A commonly heard truism in the SparkLabKC offices is that “investors don’t invest in ideas – they invest in people.” This is more than just words. I’ve seen a lot of great ideas that didn’t have the right people behind them. I’ve also seen some mediocre ideas that had a great team. All they needed was some refinement and they were off to the races with something very viable. It’s amazing to combine enthusiastic people with great their ideas and mentors that help them grow the idea through engagement and collaboration.
I’m very grateful for the incredible investors that have rallied behind our efforts in support of entrepreneurship and innovation in Kansas City. I’m glad that their participation is rewarding for them as well. Their enthusiasm for our work makes it all possible.
Interested in learning more about becoming an investor in SparkLabKC? Please contact me at KevinFryer@Overlap.com.