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A few KC organizations have spawned many startups, study shows

Updated: 2013-06-22T00:53:49Z

By BEN UNGLESBEE

The Kansas City Star

It seems the ancestral gene pool of Kansas City’s homegrown technology startups is rather small. A recent study of Kansas City tech firms shows that a handful of organizations have spawned many of the city’s startups.

Former employees of Sprint, Marion Laboratories, MRI Global, the University of Kansas and the University of Missouri-Kansas City together started the most firms. Sprint and Marion, the company founded by Ewing Kauffman, each gave rise to more than 20 startups.

Those organizations all predate 1970. Employees from five other companies, founded more recently, have also sired their fair share of spinoffs. Those companies are Cerner, Innovative Software, Perceptive Software, Proteon Therapeutics and Archer Technologies.

The study, conducted by Heike Mayer of the University of Bern in Switzerland and funded by the Kansas City-based Kauffman Foundation, tracked the heritage of Kansas City startups and compiled it in a visual map of Kansas City’s “tech galaxy.” The study also asked 214 local companies about their origins and read on the city’s entrepreneurial climate.

It found that Kansas City entrepreneurs have largely financed their own ventures. About 70 percent said they invested their own savings in their companies, and 26 percent received financial support from friends and family. Only 9.5 percent were able to lasso venture capital.

Respondents listed the dearth of local capital as one of the main challenges to starting a technology company in the city. The lack of local talent — technological as well as sales and marketing talent — was also listed as a disadvantage to doing business in the city. That said, graduates of nearby universities in both states are important to business owners as sources for new employees.

And though companies struggled to find new talent close to home, they did say local mentors are a valuable source of new ideas.

To reach Ben Unglesbee, call 816-234-4072 or send email to bunglesbee@kcstar.com.

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