Philadelphia isn’t routinely thought of as a startup hub. But the City of Brotherly Love is hoping to now sprinkle some of that love to entrepreneurs — in the form of cash.
“The goal of Startup PHL is to build upon and support so much of the good work that is already being done, building more businesses, creating more jobs, and expanding entrepreneurial opportunities to even more Philadelphians,” said Mayor Nutter in a press release announcing the program. The fund includes $3 million from the Philadelphia Industrial Development Corp., a figure that is to be matched by an investment firm which will manage the money and seek out promising startups in the city.
We’ve seen these programs before, including Oregon’s very own Portland Seed Fund. But do they work?
Seattle politicians have largely avoided these types of public-private initiatives, though the state-operated Life Sciences Discovery Fund and recently launched University of Washington W Fund (with money from both private and public coffers) are examples of public money being used for startup ideas. (Some have argued that the Life Sciences Discovery Fund is an example of how not to do public-private partnerships.
The jury is out whether these types of programs should fall under government agencies. Interestingly, the topic has become a key talking point in the race for governor in Washington state. Candidate Rob McKenna has continued to hammer Jay Inslee over an idea, which he has since dropped, to pump state pension money into startups.
Whether you agree or not that government funds should be used to cultivate new businesses, there is a problem here that needs addressed. And it is taking on added significance in Seattle given that several venture capital firms in the area — most recently OVP Venture Partners and Frazier Technology Ventures — are getting out of the investing business. Others, such as Ignition Partners, are pumping an increasingly large number of dollars into companies outside of the state.
Entrepreneurs in the Seattle area have long complained about the lack of seed-stage capital on attractive terms, causing some to head to Silicon Valley to raise cash.
Programs such as TechStars are trying to fill the gap as are angel investment groups, but there’s still an ongoing perception (disputed by some in the venture community) that there’s not enough early-stage capital in Seattle.
So, what do you think? Would you welcome a City of Seattle-supported startup program? (Sounds like some might want it more than drones flying overhead!)
Personally, I have some doubts whether that’s the right approach. However, I do envy cities such as New York, Portland and, now Philly, which have leadership who take startups seriously. Let us know what you think.