A piece just appeared in BusinessWeek discussing the odds of getting funding from Venture Capital organizations. Things aren’t too promising, perhaps 1 in 100 plans get funded. The odds get worse when you get into fly over country. (yes..where we live)
Location counts, too. California is home to 41% of the companies VCs
funded last year. An additional 13% were in New England. If you’re not
in a medical or tech sector and you’re not located in a hotspot like
Silicon Valley or Boston’s Route 128 corridor, your chances of getting
VC funding are virtually nil, Shane says.
Let’s look at Iowa for a moment. We have very smart people here. We also have quite a few tech start ups happening around the state. I’ve met plenty of these people and they’re just as smart as the folks out west. So what’s the problem?
Is it that Iowan business ideas are horrible and unfundable?
Are we but simple farmers that don’t understand the big city?
Are we less intelligent than those on the coasts?
Do we have so few high net worth individuals that there is no such thing as Angel investing?
The answer is no to all of the above.
The problem we face is that the Iowa investment community is not well organized, is risk averse, is hamstrung by a state government that wants to take credit for economic development successes, and has little appetite to do anything first.
- Show me a fund in Iowa (state or otherwise) that has a quick and painless pitch funnel system that hears plans weekly…or even monthly. Can I submit the plan or form on line in 10 minutes?
- Show me a fund that has "quick grants" for $25k-$100k for prototype or concept development with no strings attached. It’s called RISK capital for a reason…it’s not "pretty much a sure thing because 10 other people have been successful at this capital".
- Show me where all the plans that "didn’t make the cut with the current state/local funded accelerator programs" go. I bet there are some real gems out there rotting because schedules were full.
- Show me how I can qualify for Iowa state money without employing a state "paperwork filler outer".
Organize. Collaborate. Fund. Tap into the expertise that’s here. The side effect will be achieving the goal of stemming the famous Iowa brain drain. If you want people to stay here, you need to give them a reason to passionately work 80 hours per week and not care about the fact that it’s 8.3 degrees outside. You need wages to come up. You need RISK capital to flow here. You need success stories to emerge that don’t have Pappajohn or a state funded business accelerator name tattooed on their backs .
I’ll be happy to post revisions to this post when someone proves me
incorrect or too bold. This post is a call to action Iowa angel
investors. If you need someone to organize you, I accept the challenge. Call me.
UPDATE – We now have a name for you. It’s Central Iowa Angels (CIA) (www.centraliowaangels.com)