Top 5 Cities Worldwide for Entrepreneurs?
Kansas City is honored of course to be ranked in the top five cities in the world for entrepreneurs, according to a just-published article in the Kansas City Business Journal. The evaluation factors are interesting, and one wonders whether they talked to entrepreneurs themselves, or mostly to city politicians, administrators and staff. Krause Law agrees that Kansas City is a great place for entrepreneurs, but our factors would be quite different, and moreover we would suggest Kansas City could be much more effective for entrepreneurs when other less-positive factors are considered and if they were properly addressed.
In the positive ledger, Kansas City and the Midwest in general has great universities producing great talent across the spectrum of technology and life sciences, where a lot of entrepreneurship is happening in this region. Plus, this region offers talented people a life style that the coasts and other major cities often cannot. Kansas City, in particular, is now on a path of encouraging supporting organizations so that entrepreneurs can be a part of a dynamic, creative community. All of this is good, and to some extent organic–the better it is, the better it will be.
Yet, gaps remain, so there is a negative ledger as well, and those gaps can present challenges. Every new company that needs capital faces a daunting, time-consuming and costly process to find capital resources. The naturally conservative culture of the Midwest affects both investors and financial institutions. Unfortunately, state governments are often misdirected when they try to foster economic growth through investment incentives, as those systems easily become political issues and involve selection processes other than the natural forces of capitalism to select the best companies. Stop with tax incentives and tax credits and selection groups headed by former politicians. Start removing barriers and take down the regulatory obstacles. For example, a state that develops an effective way to allow “finders” to help companies locate capital, without burdening them with a costly broker-dealer regulatory scheme, will watch start-up companies flock to their jurisdiction. Stop burdening small companies with mandated social solutions and stacks of forms to complete. Stop creating complex tax issues. Stop . . . well, the point is obvious–just stop making it so difficult for a start up company to get going because of unnecessary distractions.
Who out there has innovative ideas to loosen up the free flow of capital into high growth companies, other than some kind of government program with handouts or tax incentives? Let us hear from you.