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Innovation & Job News

How our startup community got a $3 million seed fund from the City of Philadelphia

In the fall of 2011, leadership from Philly Startup Leaders and Ben Franklin Technology Partners began meeting with  Philadelphia Alliance for Capital and Technologies, and officials from Philadelphia Industrial Development Corporation and The Mayors Office. Despite seemingly different agendas, the group collaborated around a shared interest: How do we keep promising companies in Philadelphia?
A year later, this working group drafted a Request For Proposal now known as Startup PHL. No one doubted the increased momentum of the past five years--Philly has a growing number of talented risk-takers, coworking spaces, incubators and organizations supporting entrepreneurship. New businesses, particularly tech businesses, are successfully launching.
"This isn't about the city stepping in to fix something that's broken," Bob Moul, head of Philly Startup Leaders and CEO of AppReniassance says. "Here's a sector that's been really self-sufficient and grassroots. The city would like to see that be consistent and happen on a regular basis."
Unfortunately, many of these promising startups continue to leave for New York and other cities where they can secure investment.
"The lack of early seed stage capital has had a definite impact on the region," Moul says. "If we're not careful, Philly's going to become known as a great catalyst but a net exporter of great opportunities."
At the Mayor's request, the group began a due diligence process using NYC Seed as an example. The City is currently accepting bids on Startup PHL from venture capitalists and expects to announce the fund's manager mid-December.
Integral to the $3 million seed fund, Startup PHL's challenge fund is a public request for structural recommendations to encourage continued startup growth. Areas of interest include collaboration between supporting organizations, integration of universities and emerging business, and connection between suburban early stage companies and urban startups. Moul advocates subsidized space to foster entrepreneurship.

In 2008, NYC Seed was New York City's first venture fund. Now they have over 20. Starting with the same amount of money, NYC Seed was picked up by University City-based First Round Capital, which added $19 million. Moul believes Philly can grow $15-$20 million.

"If we can pick the winning companies and keep them in Philadelphia, the net impact in three to five years is going to be significant, Moul says.
According to Moul, Startup PHL ultimatly began with the Mayor's growing recognition of the startup community.
"In the last year we've really turned a corner," Moul says. "All these [startup] organizations were running their own missions, and doing their own plans. What I've seen in the past year or two is a willingness to gather around a table, collaborate and leverage our combined resources. The city saw that."

Source: Bob Moul, Philly Startup Leaders
Writer: Dana Henry

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