Loans, Grants and Equity Funding

Guide: Loans, Grants and Equity Funding Part Nine

Venture Capital

Venture capitalists (VCs) invest money in newer businesses. These capital investments come later in the business cycle after the company has already had investors. Many entrepreneurs think “big money” when they consider venture capital. But it can be a complicated relationship – and it’s not for everyone. Here’s how it works.

Venture capital basics

Who are venture capitalists?

VCs are private-equity investors. VC firms invest funds provided by limited partner investors. These limited partners can be pension funds, insurance companies, foundations and even individuals with ultra-high net worth.

These firms provide funding to companies that show potential for significant growth. In exchange, VCs get an equity stake in the business. VCs see investing in new or expanding companies as a high-risk, high-return activity. They’re looking to make more than they could investing in the stock market.

What’s an equity stake in a business?

An equity stake means owning a percentage of the business. When a VC invests in a business, they do it in exchange for a percentage of the business. This means they gain significant control over company decisions.

How much do VCs invest?

Venture capitalists usually make good-sized investments, and those numbers are going up. In 2020, more than 10,800 U.S. companies received venture funding. And 3,680 venture funds had $548 billion in assets under management, according to the National Venture Capital Association. The amount of money that VCs invest in individual startups obviously varies. However, they invest after the initial investing rounds, after a business has had time to get their act together and really show potential.

Do VCs invest in the Midwest?

You bet. California and New York have the highest rate of VC investments in the country. In 2020, Missouri ranked 24th and Kansas ranked 38th among states for capital invested by VCs. That money matters. Missouri companies raised more than $475 million in venture capital through a total of 79 deals. And Kansas companies raised almost $100 million through 21 deals.

Is finding venture capital a good idea for my business?

Possibly. Read on – or call KCSourceLink at 816-235-6500. Our Network Navigators provide free help. They can point you to the resources that are right for you and your business, no matter what funding stage you are in.

Who should work with a VC?

Venture capital funding can be a good fit for businesses that are about to see significant growth. But the owners need to be in the right mindset.

Before you meet with a VC, you and your business partners need to answer some tough questions:

Am I willing to give up some ownership and control of the company?
Can I show that the company will likely show significant revenue and earnings in the next three to five years?
Can I demonstrate that my company will produce a solid return for investors?
Am I able to take guidance from investors and accept decisions from the board of directors even if I don’t always agree?
Do I have an exit plan that might mean I’m not involved in the business in three to seven years?

If your answers indicate major company growth and flexible business partners, finding a VC might be a smart next step. And if you’re not there yet but headed in that direction, KCSourceLink can help you take those final steps. Reach out to our Network Navigators.

How do I prepare to meet with a VC?

Once you’ve taken an honest look at your company, you need a solid business plan and executive summary. It should include:

Financial overview for at least the next three years
Sales and marketing plans
Goals for the next three to five years and the actions you’ll take to reach them
Exit strategy

This list might appear short, but those four bullet points represent a lot of heavy lifting. You need a detailed road map for your business and a pitch that perfectly represents it.

We highly recommend working with an expert to find the best investment group and prepare your pitch. Many resources are listed here. Not sure where to start? No worries. Call KCSourceLink at 816-235-6500. We can connect you for free with the experts who can help you reach your goals.

Who Can Help?

Provider Information
Accelefund Accelefund helps aspiring entrepreneurs invest in their own companies using their retirement savings, without paying taxes, early withdrawal penalties or taking out a loan. We’ll walk you through a streamlined and simple process, with personalized service and expert guidance every step of the way.
ArtsKC - Regional Arts Council ArtsKC has developed programs and services designed to “unleash the power of the arts.” This includes programs for the arts community, the business community, and services to the civic community. Each specific program or service we provide to artists, arts organizations or the community at large was developed to address a need within our local arts ecology. ArtsKC continually assesses and adjusts our services to respond to the needs of our growing arts community.
Capital Access Center The Capital Access Center is a free service to help a business find Capital Resource Partners. The Capital Access Center (CAC), part of the Kansas Small Business Development Center (SBDC) and funded through the 2020 CARES Act, is a consulting service to small business owners needing Capital (Loans, Lines of Credit, etc).
Community Capital Fund Since 2012, the Community Capital Fund has deployed more than $1,500,000 to neighborhoods and grassroots organizations, as well as entrepreneurs and small businesses, organized nine Community Development Workshops that have collectively drawn more than 2,100 community leaders, and fiscally sponsored ten social ventures that have raised more than $1,500,000 collectively.
Enterprise Center in Johnson County The Enterprise Center in Johnson County (ECJC) is a venture development organization providing resources and connections to accelerate the success of early-stage companies.
equity2 equity2 was founded to provide patient capital for new and growing businesses and community-enhancing projects. We utilize Qualified Opportunity Zones as a tool for marrying capital with impact, combining both definitions of equity to achieve positive social and economic returns.
Hispanic Chamber of Commerce of Greater Kansas City The Hispanic Chamber of Commerce of Greater Kansas City is dedicated to the creation, advancement, promotion and development of economic opportunities within the Hispanic market and business community.
Innovation Stockyard The Innovation Stockyard operates the Kit Bond Science and Technology Incubator on the campus of Missouri Western State University with a focus on economic and workforce development, and animal health and nutrition.
InvestMidwest Venture Capital Forum InvestMidwest provides access to capital for emerging, privately held companies to promote entrepreneurship, business growth and expansion in the Midwest, with a focus on technology, food/agriculture, and life sciences.
Kansas Small Business Development Center at KU (SBDC) The KU-KSBDC provides free and confidential individual advising to small business owners, managers and prospective owners. The center can work with any company that fits into the Small Business Administration's definition of a "small business."
KC Collective KC Collective was developed by startup founders for startup founders. Through collective collaboration, we leverage our networks to provide introductions, mentorship, generous perks and discounts from our partners, and the education and resources necessary for driving your business forward.
KC Velocity Our purpose is to provide high quality mentoring, events and leadership services to growth oriented companies, along with networking opportunities for entrepreneurs, to result in positive business activity and facilitate job creation in Lee’s Summit.
KU Innovation Park KU Innovation Park, with locations at both the University of Kansas (KU) Lawrence Campus, and Kansas University Medical Center (KUMC) in Kansas City, is the largest incubator system in the state. It is comprised of three separate facilities totaling approximately 90,000 square feet of wet lab, office space, and shared work spaces.
Missouri SBDC at Northwest Missouri State University - St. Joseph The SBTDC offers confidential, one-on-one counseling, coaching and training to existing businesses and emerging business owners.
Missouri SBDC at University of Missouri Kansas City Missouri SBDC at UMKC is OPEN for business; both virtually and in-person for our trainings and counseling. Contact us at sbdc@umkc.edu to talk how we can help you SOAR with your entrepreneurial journey!
RedTire Assist businesses in ownership transition, succession planning, business valuation, business sales and acquisitions. Provide guidance and counselling to potential buyers. Equally assist both sides by helping the parties negotiate a fair value to make a win-win deal and complete the purchase transaction. All services are offered free of charge.
TechAccel, LLC TechAccel is a venture development and technology organization that invests across the agriculture, animal health, and food science industries. They work with startups, universities, and corporate partners to fund and advance new discoveries to market.
Technology Venture Studio The Technology Venture Studio helps move early-stage innovations from concept to reality—all to create jobs and economic impact, attract more equity funding to our region and establish Kansas City as a tech hub.
The Black MasterMind Group Charitable Foundation The Black MasterMind Group is designed to create strategies to help the Black Entrepreneurial Community; Start, Stabilize, Sustain, and Scale businesses in the black entrepreneurial community. The Black MasterMind Group works collaboratively with organizations, community leaders, business coaches, trainers, educators, and business leaders, to teach entrepreneurial financial literacy and business strategies helping the black entrepreneurial community secure funding.
The Toolbox: Small Business Resource Center The Toolbox is the go-to resource for everything small business in Wyandotte County, Kansas. All of our services are offered at no-cost to local residents and businesses. We provide support with planning, registering, funding, operating, and growing your business. We take the intimidating checklist of starting and operating a business and distill it down into the essentials through private one-on-one small business coaching. We want to make navigating business-related processes in Wyandotte personable, simple and accessible, so you can get back to doing what you do best — creating, innovating, and succeeding in your business.
Women's Business Center Provide training, mentoring, networking opportunities and business consulting to help women start & grow their businesses.

Kansas City Area and Regional VC Firms

Provider Information
Capital Access Center The Capital Access Center is a free service to help a business find Capital Resource Partners. The Capital Access Center (CAC), part of the Kansas Small Business Development Center (SBDC) and funded through the 2020 CARES Act, is a consulting service to small business owners needing Capital (Loans, Lines of Credit, etc).
Dundee Venture Capital Dundee Venture Capital is an Omaha-based seed stage venture fund with >$5 million invested in Kansas City.
Enterprise Center in Johnson County The Enterprise Center in Johnson County (ECJC) is a venture development organization providing resources and connections to accelerate the success of early-stage companies.
equity2 equity2 was founded to provide patient capital for new and growing businesses and community-enhancing projects. We utilize Qualified Opportunity Zones as a tool for marrying capital with impact, combining both definitions of equity to achieve positive social and economic returns.
Firebrand Ventures Firebrand Ventures is a new kind of Midwest venture fund. We combine a strong brand, vast network, and deep experience with startup hustle to invest in exceptional early stage software startups.
Five Elms Capital Five Elms Capital is a global growth equity firm that invests in fast-growing B2B software businesses that users love.
Flyover Capital The mission of Flyover Capital is to provide capital to assist founders in creating the next generation of technology success stories areas outside of the traditional tech hubs.
Holy Rosary Credit Union Our members are not only members of a financial institution, they are members of the HRCU family. We seek not only to provide financial services, but to empower our members to be in control of their finances. We do this by overcoming language barriers, offering opportunities for education, and creating a mutual trust between our staff and our members.
iiM Innovation in Motion (iiM) is an angel capital firm headquartered in Merriam, Kansas. We employ a disciplined approach to identifying, funding and curating startup and early stage companies in the Agriculture, Animal health and Human Health sectors.
InvestMidwest Venture Capital Forum InvestMidwest provides access to capital for emerging, privately held companies to promote entrepreneurship, business growth and expansion in the Midwest, with a focus on technology, food/agriculture, and life sciences.
KC Collective KC Collective was developed by startup founders for startup founders. Through collective collaboration, we leverage our networks to provide introductions, mentorship, generous perks and discounts from our partners, and the education and resources necessary for driving your business forward.
KC Velocity Our purpose is to provide high quality mentoring, events and leadership services to growth oriented companies, along with networking opportunities for entrepreneurs, to result in positive business activity and facilitate job creation in Lee’s Summit.
KCRise Fund KCRise Fund is a venture capital co-investment fund designed to help bring more financing to early-stage businesses in the area.
Konza Valley Capital Konza Valley Capital is a licensed Small Business Investment Company that provides private equity capital to lower middle market companies having potential for substantial growth and long-term equity appreciation.
Leanlab Education LEANLAB Education is an organization that builds communities and launches transformational innovations into K12 schools.
Leawood Ventures Leawood Ventures provides investors with unique and scalable access to diversified private venture equity and mezzanine debt opportunities identified, evaluated, and actively managed by an experienced team of entrepreneurs and investors who leverage technical and operational expertise to maximize returns.
Missouri Technology Corporation MTC is a public-private partnership created by the Missouri General Assembly to promote entrepreneurship and foster the growth of new and emerging high-tech companies through commercialization programs, innovation centers and innovating funding programs.
Open Prairie Ventures Open Prairie is a Midwest-based, private equity fund manager providing fund deployment, advisory and strategic planning services.
OpenAir Equity Partners OPENAIR Equity Partners is a private equity and venture capital firm specializing in early venture, mid venture, late venture and later stage investments.
Royal Street Ventures Royal Street Ventures is a Utah-based venture capital firm that has expanded into the Kansas City region.
TechAccel, LLC TechAccel is a venture development and technology organization that invests across the agriculture, animal health, and food science industries. They work with startups, universities, and corporate partners to fund and advance new discoveries to market.
Technology Venture Studio The Technology Venture Studio helps move early-stage innovations from concept to reality—all to create jobs and economic impact, attract more equity funding to our region and establish Kansas City as a tech hub.
TGP Investments TGP Capital Partners is a Kansas City based private equity investment fund formed to make middle-market investments in well-managed, profitable, and growing companies.
The Toolbox: Small Business Resource Center The Toolbox is the go-to resource for everything small business in Wyandotte County, Kansas. All of our services are offered at no-cost to local residents and businesses. We provide support with planning, registering, funding, operating, and growing your business. We take the intimidating checklist of starting and operating a business and distill it down into the essentials through private one-on-one small business coaching. We want to make navigating business-related processes in Wyandotte personable, simple and accessible, so you can get back to doing what you do best — creating, innovating, and succeeding in your business.

Other VC Resources

Check out the KCSourceLink calendar. It’s a complete list of upcoming events. You’ll find opportunities ranging from fine-tuning your idea to pitching it to potential investors.

Get personalized VC help

Finding the right funding at the right time can be a challenge. But you don’t have to go it alone. Check out The Resource Navigator to narrow down your search. Or, give us a call at 816-235-6500. KCSourceLink can create your Personal Action Plan of next-step resources for free.