Digital Sandbox KC backed with ‘unprecedented’ second grant

Digital Sandbox KC, a project funding source for startup businesses, has gained $1.15 million in backing partly through a federal grant.

A three-year $500,000 grant came from the U.S. Department of Commerce through its i6 Challenge. Digital Sandbox KC said this is its second i6 grant and that the repeat award is unprecedented.

Jeff Shackelford, director of Digital Sandbox, said it helped that the program has been successful and that it had been lining up other backers going into the application.

“We already had our ducks in a row, that we would need to match the funding,” Shackelford said.

The Kansas City program received a $1 million i6 Challenge grant in 2012, which helped launch it in February 2013.

Matching funds boosted the recent infusion to $1.15 million. This money is coming from the Ewing Marion Kauffman Foundation, the Missouri Technology Corporation, Cobalt Ventures and the Henry W. Bloch School of Management at the University of Missouri-Kansas City.

Shackelford said the original grant had expired last September. The new funding, which comes over three years, means he and others at Digital Sandbox can spend more time focusing on companies in the program and less on fund raising.

This was the first time the Commerce program allowed groups to seek a second round of funding, said Maria Meyers, director of the Innovation Center at UMKC. Previously, the i6 Challenge grants were limited to establishing programs.

“One of the big issues we have in the Kansas City region is having enough early stage funding,” Meyers said. “Up until the birth of the Digital Sandbox in 2012 we didn’t have any of this kind of funding.”

Since startup, Digital Sandbox KC has funded 46 projects that helped early-stage businesses advance significantly toward their goals. Typically a $20,000 grant, its support has paid to build a prototype to help a young business attract further investment, hired programmers to develop or enhance an existing product, provided legal advice with issues surrounding a business or other “proof-of-concept” projects.

For example, it recently announced funding for four area companies.

Digital Sandbox KC says its efforts have helped create 23 new businesses locally, and that 33 of the companies with its project funding have been able to attract $17.7 million in additional funds.

Digital Sandbox also has gained support from local businesses, including Hallmark Cards Inc., VML Inc., UMB Financial Corp., Sprint Corp., Cerner Corp., RareWire, the University of Kansas, Burke Payne LLC law firm and Union Station. Others have joined to provide support, including R2fact and Garmin Ltd.

This story was originally published March 30, 2015 at 2:08 PM with the headline "Digital Sandbox KC backed with ‘unprecedented’ second grant."