Recent News - Locally Grown Startup Funding
Locally Grown Startup Funding
Posted by Hughes Media Law Group
Seattle is undoubtedly a proud tech hub home to many established and emerging companies. However, when focusing solely on venture capital investment numbers the city often comes in behind giants like San Francisco, New York and Boston.
Other funding sources, such as institutional investors and sovereign wealth funds stay away because, well, the startup industry here is still small. As one prominent Seattle VC states, “Past a certain point, it no longer makes sense for global capital allocators to play in sub-scale capital markets – not because there aren’t returns to be had, but simply because the strategies can’t be applied to large enough blocks of capital.”
Moreover, the restrictive Washington State Constitution makes it near impossible to use state funds to invest in private markets (the UW’s W fund had to rely on federal and private money). Also, the state legislature’s failure to renew Washington’s R&D credit this year could put added pressure on a growing company’s books. Other financing methods must be relied on.
This begs the question: What else can be done to financially stimulate the area’s early startup economy? As one of the wealthiest cities in America, Seattle has no shortage of capital. It is a matter of utilizing that capital for the benefit of area businesses. Luckily, Canopy, a new effort funded by two regional family foundations, strives to “[bridge] the gap between communities and investors.” The organization aims to provide market based research and education to ensure its members will provide “a long-term pipeline of investments” for regional advancement and solutions.
The Pacific Northwest should keep its supply of money liquid by funneling it back into the area’s growth and innovation. No one else is currently doing it for us.