By Scott Meacham
Copyright © 2014, The Oklahoma Publishing Company
Oklahoma received a huge vote of confidence recently when we scored two of the top five rankings on Kiplinger’s “Top 10 Cities for Starting a Business.” Oklahoma City rated No. 1 and Tulsa No. 4.
Oklahoma was the only state with multiple cities on the 10-city list.
Kiplinger reports that Oklahoma City’s cost of living is 9.7 percent below the average and Tulsa’s is 11.7 percent more favorable. Plus our two largest cities have an educated work force, an advantageous mix of Fortune 500 companies and small businesses, and a favorable economy as indicated by a low unemployment rate.
While affordability is a key measure — especially as a company gains footing and grows — it’s likely not the first thing on an early stage entrepreneur’s top 10 list.
Access to investment capital usually trumps everything else. (Three-fourths of the companies responding to our 2014 client survey said that access to capital was their most critical issue.)
On this count, the Kiplinger ranking calls out specifically the services provided by i2E, including the GrowOKC Fund which is managed by i2E.
It’s a great turn for Oklahoma to receive this type of national recognition as having investment capital for entrepreneurs — especially when the heartland of the U.S. is flyover country for most venture capital firms.
As Kiplinger recognizes, the $2 million GrowOKC Fund can help companies expand into additional markets, add sales channels, and make other strategic investments.
But that’s only part of the story.
To become fundable growth companies, startups first have to prove their concept, find early adopters, and firm up their business proposition.
So, to deliver on the full potential and impact of the GrowOKC Fund and other similar resources, Oklahoma has to tee up a vibrant pipeline of new very early stage deals. Kiplinger calls this out too, with a tip of the hat to i2E’s entrepreneurial model of support services and capital.
As these initiatives succeed, more startups become strong candidates for proof of concept and seed funding. And that’s where our state needs to bolster our resolve to stay on top.
Earlier this year, the Seed Fund, which provides very early stage funding to entrepreneurs was reduced by $2 million as was OCAST’s Research Support Fund which provides grant funding to help entrepreneurs develop promising new concepts. This means that four to eight fewer new companies will get started in the Oklahoma pipeline this year.
Plus we are missing out on the opportunity to use that funding to leverage another $8 to $26 million in private equity.
When expert sources like Kiplinger (and Forbes earlier) cite Oklahoma City and Tulsa as being top U.S. places to start new companies, we ought to be leveraging our reputation—not undercutting it.
Scott Meacham is president and CEO of i2E Inc., a nonprofit corporation that mentors many of the state’s technology-based startup companies. i2E receives state appropriations from the Oklahoma Center for the Advancement of Science and Technology. Contact Meacham at [email protected].
DID YOU KNOW? Oklahoma City has the second-highest number of small businesses per 10,000 people on Kiplinger’s “Top 10 Cities for Starting a Business” list.