SixThirty At A Glance
Location: St. Louis | Established: 2013 | Classification: Accelerator
Startups Currently In Program: 4 | Total Startups Assisted: 8
Key People: Jim McKelvey, founder/managing director, co-founder of Square; Hal Gentry, director, serial software entrepreneur; Brian Matthews, director, co-founder of Cultivation Capital; Jay DeLong, director; Matt Menietti, venture partner, COO of GoodMap
Specialty: Financial services technology
Structure: Companies receive $100,000 in exchange for an equity stake between 5 and 10 percent. Each company is paired with a lead mentor that gets to know one of the companies and serves as adviser to the startup’s leaders. At least one member of a startup responsible for business development must be in St. Louis to participate in incubation programs.
When St. Louisans Jack Dorsey and Jim McKelvey and their co-founder Tristan O’Tierney started Square, they had the technology behind their mobile payments device ready in three weeks. But it would take 18 months before they had the licenses and relationships with financial institutions to allow their customers to move money.
That wouldn’t surprise Matt Menietti, a venture partner at McKelvey’s SixThirty “fintech” (financial services technology) accelerator, named for the height and base width of the Gateway Arch, 630 feet.
“It’s really hard for fintech startups to make it,” Menietti said. “You really have to have access to the rails and earn some validation through a pilot or partnership agreement … with a larger financial institution in order to get traction.”
The eight companies SixThirty takes in each year will be given access to the connections and resources that will hopefully get them to the next level in terms of business opportunities and capital accumulation, Menietti said.
Companies first receive $100,000 cash in exchange for an equity stake between 5 and 10 percent. The four-month program includes educational programs and networking opportunities for the startups, but the main focus is refining the companies’ operations.
At least once a week, the companies’ leaders meet with SixThirty representatives to review their progress. They can make requests, ranging from introductions to potential partners to help with fundraising. Each founding team is also paired with a lead mentor who serves as their specific advisor on-call to handle operational issues or more sensitive problems like difficulties with an employee.
Missouri Business Alert interviewed Menietti about early challenges, lessons and successes for the accelerator. The answers below are edited for length and clarity.
Missouri Business Alert: What are some of SixThirty’s success stories?
Matt Menietti: A company called Upside. They’re based out of San Francisco, but they currently maintain a tech and development office here in St. Louis. They were able to raise a significant round after the program through one of our investors, Cultivation Capital.
MBA: What are biggest challenges faced by early-stage companies in Missouri?
MM: A big one is funding … trying to get the attention of funds and press and people who view the Midwest in general as flyover country. But I think that’s changing as we start to invest in companies that are solving real problems and that are able to justify that with revenues. So I think for companies that are growing in our backyard, they can get started because we have organizations like Arch Grants or SparkLab … that can (provide) them with that seed funding. (Others challenges are) where are they getting the second- and third-tier checks, and are they outgrowing our communities with what they need to raise?
The next thing is our own talent. How do we recruit young, knowledgeable, particularly technical talent to these areas? There are initiatives like LaunchCode and other tech meet-up groups that are seeking to solve this issue and make these cities and this region more attractive because people are hiring, and it’s an opportunity for these co-founders and engineers to help build something from the ground up.
MBA: What are the needs of a typical startup that comes into your program, and how do you address those?
MM: I think it depends on the particular industry they’re in within financial services and technology. It could be … an online escrow company based out of Australia (PromisePay); so in order to do business in the U.S. they need money transmitter licenses. There are some compliance and regulatory hoops that we need to jump through, so that’s a major challenge we’re working through with them.
Now with a homegrown company called Gremln that does social media compliance … compliance isn’t really an issue for them. It’s, “Let’s go through our Rolodex and figure out who knows the name of a senior marketing officer at a regional bank or someone that deals with social media for their financial institution.” We solve the problem that they’re having in their everyday job, and they’re able to sell that product internally so that they can get clients.
MBA: What are key lessons you’ve learned in building this accelerator?
MM: We’re seeing that even in a very specific vertical like financial services, or financial technology, there’s just a wide spectrum and array of these types of companies … and they all have their own issues and challenges.
MBA: What do you see in the future for Missouri startups and their communities?
MM: I think a lot of times cities are like, “How can we become the next Silicon Valley?” I don’t really subscribe to that; we’re going to have our own things that make our cities and our regions great, and we shouldn’t strive to copy what’s going on in San Francisco and even New York. We should focus on, what do our cities do really well? And I think that’s where SixThirty (has) really taken that to heart. St. Louis as a financial hub is one of the top in the country, and so let’s build on that. That’s an area that even a Silicon Valley may not be able to compete with the proximity and strength of the financial services community in our city.