SparkLabKC At A Glance
Location: Kansas City | Established: 2011 | Classification: Accelerator
Startups Per Class: 10 | Total Startups in Program History: 20
Key People: Kevin Fryer, founder/managing director; Don Hutchison, founder, Silicon Valley angel investor; Vincent Wagner, founder, investor; Mike Laddin, founder, CEO of LeaderPoint; Al Eidson, founder, leader of Eidson & Partners
Specialty: Internet technology
Notes: Companies are limited to four founders, and must include one experienced coder. Each company gets free office space and seed capital of $6,000 per founder with a maximum investment of $18,000. SparkLabKC investors get a 6 percent equity stake.
Kevin Fryer and his business partners presumed that Google’s decision to make Kansas City the nation’s first test market for Google Fiber, the company’s ultra-fast broadband service, would provide opportunities for new Internet technology businesses.
“So we kept brainstorming and brainstorming, and we couldn’t decide on anything for Google,” Fryer said. “So we decided to do a business accelerator instead.”
That was three years ago, Fryer explained, at a time when Techstars, Y Combinator and other technology business accelerators were already spawning highly successful ventures. Fryer and his co-founders interviewed the operators of eight accelerators from around the country to determine best practices and picked their brains about lessons learned.
The resulting accelerator, SparkLabKC, now has 36 angel investors and about 100 mentors, along with 16 corporate or university partners or sponsors.
On April 21, SparkLabKC’s second class of 10 startups completed the 90-day program, and half of the graduating companies have received additional seed funding or are already generating revenue.
“It’s our job to help these companies become successful because, if we don’t help them become successful, we don’t make a dime,” Fryer said of his accelerator, which gets a 6 percent equity stake in the participating companies. “It is a community effort. People have to be transparent and willing to help or it wouldn’t work. These hundred mentors that volunteer their time, they don’t gain anything out of this other than giving back. So it takes a lot of effort to get these startups up and running.”
Missouri Business Alert: What are some of your success stories?
Kevin Fryer: FormZapper has just joined the SixThirty accelerator over in St. Louis, which only a few financially-based companies get to go through. We have three other of companies that raised their entire seed round. We’ve got five in our class that just graduated that already have revenue — LuckyOrange, Life Equals, Creelio, U-Chic and Minute Movement.
MBA: What are biggest challenges faced by early-stage companies in Missouri?
KF: Access to capital and access to knowledge.
MBA: How do you address those challenges?
KF: By providing seed (funding) and providing over a hundred mentors, and then helping them secure their seed rounds when they come out as worthwhile.
MBA: What are key lessons you’ve learned in building the accelerator?
KF: The most important part of the whole program is the mentoring, the amount of knowledge that’s available to these startups. By having the 100 mentors who are some of the top business leaders in Kansas City, it’s just a huge runway for them.
MBA: What can state and local governments do to make it easier for operations like yours to thrive?
KF: Candidly, not much. We’re a for-profit organization just like anybody else. They promote us occasionally, which helps. But you know what we lack, and the only thing we really lack, is funding for the startups. So the jobs program that they do and stuff like that is extremely valuable, and I do know St. Louis has the Arch Grants program which, over there, is a humongous success. I’d love to see something duplicated like that over in Kansas City.