Key Findings of Missouri Capital Formation Study
The Disconnect Between an Idea and a Business
Missouri ranks 9th among states in attracting federal R&D grants.
Yet, Missouri ranks 27th in university start-up businesses.
What this means: Missouri is NOT capitalizing on federal research money coming into the state because we lack incentives to convert new discoveries into commercialized products, businesses, and jobs in Missouri. Other states are capitalizing on our research.
Funding for Missouri-based Start-up Companies
Despite the dramatic increase of venture capital funds located in Missouri during the past ten years, there has been a downward trend of venture investment into Missouri’s entrepreneurial firms during that same period. This is an indicator that Missouri is not growing enough new technology start-ups and not maturing existing ones to the point where they can attract venture capital investors. (See graphs on opposite page)
Missouri’s portion of all U.S. venture capital dropped more than seven times over the past ten years…We are losing ground to our surrounding states.
Why Is Venture Capital Investment Not Coming to Missouri?
Missouri has fallen behind other states in part because of its lack of state investment in capital formation programs.
States geographically surrounding Missouri (our “Neighboring States”) spend an average of $2.79 per capita on capital formation programs. States identified as being technologically similar to Missouri (“Tech-Similar States”) spend an average of $2.94 per capita on capital formation. In stark contrast, Missouri spends only 10¢ per capita on these programs.
Additional Reference Material
2008 Annual Report Missouri Technology Corporation
House Bill No. 189 First Regular Session, 95th General Assembly
2008 Midwest Healthcare Venture Report, Bioenterprise
MoneyTree Report: 2008 3rd Quarter Summary, PricewaterhouseCoopers
2008 Impact Report, Oklahoma Center for the Advancement of Science & Technology (OCAST)
Maryland Venture Fund Annual Report, Maryland Department of Business & Economic Development, June 2005
The 2007 State New Economy Index: Benchmarking Economic Transformation in the States Kauffman Foundation and Information Technology and Innovation Foundation
The 2008 State New Economy Index: Benchmarking Economic Transformation in the States, Kauffman Foundation and Information Technology and Innovation Foundation
Some of the helpful references used by Dr. Parry of the Bloch School:
National Association of Seed and Venture Funds
Venture Investors
National Science Foundation (NSF)
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