How Cities Can Attract Venture Capital | Paul O’Brien, Elizabeth Packer, Levi Reed, Hunter McFarland

One of the biggest distinctions that I hear from founders who are active in fundraising in multiple different regions, their preferences tend to be for regions where there's strong kind of cross-pollination at in-person live events between founders of all different stages and investors of different sizes. And that really seems to be a big, big differentiator for a lot of founders in terms of the quality of an ecosystem. That's definitely something we struggle with in the Seattle region. We've got a lot of activity in our, in our kind of social action, social events with early-stage founders and smaller early-stage investors. And as soon as you get past kind of late seed stage, it sort of drops off and disappears. And so I think thinking about how to kind of consciously and intentionally cultivate those kinds of networks, is extremely important. And sometimes that takes the form of actual, you know, physical resources, incubators, physical locations. Those are really useful. But a lot of it has to do with kind of the behavior and the manner by which your larger funds engage in my experience.

Good afternoon, perhaps good night or good evening to many of you. Thank you all for being here. My name is Paul O'Brien. I'm the head of public affairs and government relations for Founder Institute. And for the past 5 or 6 or 7 years, economists and marketers and folks in the public sector have been looking at the boom of entrepreneurship, if it's fair to call it that, throughout the world since Silicon Valley has loosened its stranglehold on startups, looking at that boom and asking whether or not what we're doing is as effective and efficient as possible. We've all launched accelerators and incubators locally, We probably have an angel network in our community, and it's past time that we start asking if we could be doing things more capably, more effectively, and more meaningfully for the founders. The entrepreneurs are, of course, the people in our community who are not just taking the risks to start things and create jobs, but they're an important part of our culture. And that culture is what retains and even attracts other folks to the workforce, companies to our cities and regions of the world. And it's important that we serve them as meaningfully as possible. We're going to have that discussion today, and I'm honored to be joined by 3 folks from different parts of the United States working in very different roles in that regard. And with that perspective of both different parts of the United States and different work that's being done on behalf of the startup ecosystem, I hope, I expect, and I know we're going to have a really wonderful discussion about some of the challenges, some of the opportunities, some of the best practices, and some different ways that you might be exploring or could be exploring what it is that you're doing in your city and in your country. I'm joined by Elizabeth Packer, Director of Economic Development for the Golden Triangle Innovation Business District. I'm joined by Levi Velez-Reed, the Entrepreneur-in-Residence for Startup 425. And I'm joined by Hunter McFarland, Investor Relations Manager for Build in Tulsa. Elizabeth is in Washington, DC. Levi is on the West Coast in Seattle and Bellevue, Washington. And as though Washington was a theme for the conversation. We just had a nice chat about the fact that Hunter happens to be in Washington as well for Startup Week, something I highly want to constantly encourage everyone to do, bring other folks into your ecosystem. We have some friends from Africa coming into Texas in just a few weeks for Global Entrepreneurship Week, and I'm looking forward to that conversation about Africa. Folks, how are you all doing? Elizabeth, let me say hello to you first and go ahead and share some thoughts and introduce yourself a little bit more effectively than I have.

Yeah, thanks, Paul. Hi everyone, I'm Elizabeth. So as Paul said, I'm Director of Economic Development at the Golden Triangle Business Improvement District here in downtown Washington, DC. So as a business improvement district, or BID, we are tasked with serving this very specific neighborhood of downtown Washington, and we're really the city's central business district. And as part of that work, we are working with the city to build the neighborhood as a hub for tech and entrepreneurship. So happy to dive into that and bring the perspective of a place-based economic development organization that is starting to dive more into the tech world.

Fantastic. I'm so glad you're here and I'm excited for Startup Week. I hope it's incredibly busy. It always is here in Austin, Texas. Levi, how are you, man? Good to see you again.

Thanks, Paul. Good to see you as well. Lots. We're in the middle of our accelerator at the moment and it's very, very busy, but going quite well. I guess just to elaborate on what you shared, Paul, as you mentioned, I run Startup 425, which is a public sector program. It's basically an effort to drive economic development in our region by helping folks start companies. I'd say one of the biggest distinctions that we do compared to the rest of the startup ecosystem is that we don't just focus on venture-scale companies. We support businesses of all sizes. And so we have to be really thoughtful and flexible in our programming as far as how we think about doing that.

Fantastic. Good to hear. And intrigued to hear that it's a, public sector program, certainly something folks could or should be taking advantage of a little bit better, especially as we're talking to cities and governments about how to allocate funding a little bit more meaningfully. Glad you're here. Hunter, how are you? How is Washington besides Tulsa?

Washington is fine. I was looking to go to some of the monuments and museums, but unfortunately I can't because everything's shut down right now. But it's amazing. It's just good to be back here. Last time I was here was probably when I was in the 8th grade. So I'm just glad to be back in Washington. But hey, everyone, my name is Hunter. My name is Hunter McFarland. I serve as the Investor Relations Manager for BUILD in Tulsa. At BUILD in Tulsa, we're a nonprofit organization that's anchored by the George Kaiser Family Foundation amongst other foundations, family foundations in the Oklahoma region. We basically support any entrepreneur in any cycle of their entrepreneurial journey. So we support startups from ideation to scale, and we do this through a number of different funding vehicles, non-dilutive and also equity-based funding programs like Techstars. So just interested and excited for the conversation today.

Love, love that there's a family foundation involved. Also something for other parts of the world to take note of, not just family foundations, but family funds or family offices, some of those organizations or entities where people want to have a much more meaningful impact than just investing in a startup or two. We're seeing a lot more participation on the ecosystem, so I'm glad you're here as well. Thank you. A little bit of a housekeeping note for everybody. Certainly use the chat in Zoom. Introduce yourself, say hello, drop a LinkedIn. Want to connect with as many folks as possible. At the top of the hour, when the panel is done, we'll say goodbye to the panel, but we will be launching an Airmeet and dropping that link to get anybody who wants to over to an environment where we can connect better, we can have a conversation. I'm going to stick around for at least half an hour, maybe longer, after the panel. So if you'd like to do that, make sure you jump in there. Also notice, if you're not familiar with too many Zoom meetings, but I'm sure you are, there's a Q&A button at the bottom of the screen. Use that Q&A button to go ahead and ask questions. I have some thoughts, certainly, which I'll share with the panel and get their perspective on. But I'd love to weave in any questions that you might have as well while we're having a conversation. Last thing, and I'm going to drop one now, we've got a couple of polls. That I'd like to solicit of, of the audience. I know there are, looks like about 100 people here right now. Wonderful that you're all here. As those polls pop up, go ahead and take that. Give us some perspective on your part of the world and give us some insight and some more data to work with. Data is really where a lot of what we're talking about here is being driven. A lot of research, as I shared at the top, is, is exploring and exposing the fact that there's a lot more to the ecosystem of a startup. The ecosystem of a startup economy than just an incubator and just the venture capital community, that indeed it takes the right culture, the right economy, it takes workforce development and even companies to fall back on, frankly, when entrepreneurs are in need of a job. And so one of the conversations I want to start first is to get a sense for these three cities and get a sense for these three cities in the context of sort of an intriguing idea. We teach our founders to pitch and raise capital for themselves. But what we've noticed is that venture capital actually really pays much more attention macroeconomically. They're not necessarily just looking for a startup to invest in. They're looking for the city or the region to invest in, right? Do we want to invest in Chicago? Does Chicago have a healthy, vibrant startup ecosystem where there are mentors and advisors, where the startups are going to have the resources they need. So I'd love to kick it to each of you. Hunter, maybe we start with you since we ended with you. Give us a sense for this idea. If Tulsa itself was a city, and then Levi and Elizabeth, I'd like to get the same perspective when you want to jump in. If Tulsa itself was a startup, would venture capital invest in the startup of Tulsa, Oklahoma? Give us a sense for why, and give us a sense for what you're doing to help facilitate that, to draw in venture capital from other parts of the world.

I love that question, man. I honestly believe that if I was a venture capitalist or any other venture capitalists were thinking about investing in Tulsa as a city, I would definitely say go ahead and write the check because Tulsa is doing a lot of amazing things. Tulsa is one of those ecosystems where everyone is like one coffee away. And so collaboration exists in Tulsa. So unlike D.C., unlike Seattle, where there are a lot of like major players, a large well, I'll say like more corporate partners and corporate players, larger organizations that can actually drive momentum. The momentum is being driven by the people, and some of that momentum is also being driven by like the family offices. And so one of the things that you see now in Tulsa is allocation of state resources and also local resources amongst each city. So when you think about OCAS, which is the Oklahoma Center for Advanced Science and Technology, They support a lot of different startups with SBIR and STR funding, which is amazing for some startups that are looking to get that extra push and also go commercial, go to commercialization route. Tulsa also just got, I want to say, a federal designation as a tech hub. So we have a quarter billion dollar investment in Tulsa to focus on autonomous systems, cybersecurity, sustainability, energy, and I think about 2 other sectors. So From my perspective, I feel like Tulsa is one of those cities that's on the, on the rise in regards to certain industries. But like I said, we have a lot of resources on the state side and then local participation from family offices that just makes Tulsa one of those cities where a lot of startups come. We do a great job of working with a lot of early-stage startups, which is something that we do really well. Some of the programs that we host are Act House that focuses on pre-seed funding. You know, Techstars, they have a new funding model of 225%. Which has been very attractive for us. And, you know, as a lot of these other organizations are pulling out of cities, you know, we want to like Techstars, they want to double down in a city like Tulsa because they see the impact of the program that they have in Tulsa. I will also say, like, in regards to attracting venture capital, you know, we do have probably about— that's one of the things I feel like Oklahoma could do a little bit different. We only have probably about 5 true VC firms here, but those 5 VC firms do focus on bringing the top talent to Tulsa and investing in that top talent and then also investing in the companies that come out of the programs here in Tulsa. We spin up probably about 100 to probably like 100, 150 companies a year, which is good. And Build in Tulsa, for example, we help a number of different startups across, you know, the realm. So we're not just only focused on pre-seed, seed, and venture scalable companies. We're also focused on, you know, the local mom-and-pop companies that can possibly be PE buyouts or roll-ups and that type of thing. So I really feel like Tulsa is positioned in a great way, for startup investing or venture capital to come in and deploy some capital for our founders.

Highly collaborative, somewhat of a— I always forget the terms— blue ocean or greenfield or whatever buzzword we're using now where it's sort of an opportunity to develop a lot of things. I'm noticing from the poll as I kick it over to Elizabeth and Levi, I'm noticing that a lot of folks who've joined us are in the corporate world, and I'm actually really pleased to see that. We did a deep dive of both Bellevue, Seattle, and Washington, DC not too long ago. And there is a lot of corporate there. That corporate entity in certain parts of the world can play a very, very meaningful role. And it is in those two cities in particular. I hope they'll chat about that. You're not wrong. A lot of times big companies can get in the way. A lot of times companies are moving into corporate ventures or developing venture studios or supporting the ecosystem in some meaningful ways. Levi, just for the sake of working backwards, tell us a little bit about Bellevue, Seattle, the region, if you will. Think of it as a startup. Why would VC invest in that startup of the region of Washington?

Yeah, that is a really interesting question. I like that. So we have kind of an interesting dynamic going on here right now. So Bellevue, for those who don't know, is a city about one-fifth the size of Seattle itself, part of the same metro area on the other side of Lake Washington. Compared with Seattle, it tends to be a little bit wealthier, a little bit more suburban. Just given the landmass around it, it's got more ability to expand. What we've been seeing for the last few years, partly for political reasons, partly I suspect for real estate reasons, is a shift of a lot of the major corporate offices from Seattle into Bellevue. And that's a trend that seems to be accelerating. We've had some political stuff in Seattle that I think has accelerated it as well. Seattle, I would argue, is not quite as business-friendly as Bellevue tends to be. The other thing that's kind of interesting is when you look at the Seattle area, the entities in Bellevue tend to kind of get lumped into the same metropolitan area. But if we break it out, actually, a lot of the biggest funds in the region are— they say they're Seattle-based because they're a part of this area, but they're actually located in Bellevue. A lot of large startups too. We were recently doing a bit of a deep dive using some data from PitchBook, and out of the roughly 18 unicorns that are currently alive and based in the Seattle area, about half of them are actually headquartered in Bellevue, even though the city is only about one-fifth the size. So, you know, out of the cities in the region, definitely punching above its weight. From my perspective right now, obviously very biased because I'm running an entrepreneurship program for the city of Bellevue. I do live in Seattle. I love Seattle. But if I were treating both cities as startups and investing, Bellevue over Seattle any day. A lot of growth happening in that area. And frankly, I think that the city administration is a lot more forward-looking in terms of thinking about how best to take advantage of the tech scene, the venture capital scene, the large corporations there for the benefit of the city, as opposed to, you know, scoring political points for some of their legislation. So that's been very promising. And, you know, we see it with the kinds of programs that we're running. The program that I run, it's administered by the city of Bellevue, but it's actually a partnership of 6 cities on the East Side. So we're seeing a lot of this kind of collaboration, a lot of this, this, this forward-looking thinking, and we're seeing a lot of results from that. So Amazon's moving the majority of their corporate activity over to the city of Bellevue. OpenAI is opening an office in the city. Snowflake has been expanding their presence there. Right. So we're just seeing a lot of this expansion, you know, in the region, which is really, really promising. And at the same time, a lot of our largest funds over there are growing as well. So, you know, overall, I think looking, uh, looking very promising from that perspective, uh, on, on the East Side.

Good. Cheers. I enjoyed, I enjoyed the deep dive we did a few weeks ago. There's really something everyone, there's really something to appreciate in, in the notion that there's an important distinction of your city versus the region and the surrounding area. There tends to be a lot more going on, uh, in, in in the investment community as well as the tech or startup community beyond what you might think of as Seattle proper. Yeah.

And I think they're really thoughtfully taking advantage of the, you know, the preexisting elements in the region, right? We've got a lot— Microsoft's headquartered nearby, Amazon's headquartered nearby, Google and Facebook both have major presences, Expedia is headquartered nearby, right? And I think Bellevue in particular and the Eastside in general are thinking very, very proactively and very creatively about how to, you know, maximize the benefit from having such a large corporate presence for such a relatively small urban area.

Yeah, making, making all that accessible to everyone. Good, good, good to hear that. Yeah. Elizabeth, thoughts, thoughts from the East Coast. What's going on in Washington as, as a startup? What's, what's going to get the attention of the investors who would like to consider investing in Washington, DC?

Yeah, certainly. So of course I'm going to echo others and say everyone should come invest in DC. We are ready and welcome new investment. So, I mean, I'm— as I'm sure everyone is aware, D.C. has been in the news a lot lately. We're a very unique city as the nation's capital. We are not a state. So, you know, Hunter, I know you were talking about some of the state support that you all get in Oklahoma. So that's something that we don't have here in D.C. as a district, but it also creates a lot of opportunities for us. So in terms of thinking about us As a startup, we have some very distinct competitive advantages in terms of being home to the federal government and all of our regulators and policymakers, which is attracting a lot of corporate interest, especially with a lot of the technologies today that have heavy regulatory burdens associated with it. People want that proximity to power. Cybersecurity is one of our biggest sectors. We have a really deep talent pool here in cyber. Federal government is the biggest customer in a lot of those technologies. So we're seeing companies want to locate and invest here again for that proximity. So I think continuing to lean into our identity as the nation's capital, as a global city, and really to be the home for those working at the intersection of policy and technology. And as part of that, as our federal government is going through changes, the city is very focused on growing our private sector. You know, for most of DC's history, we've really, we have been a government town. That is very much changing. And the city is doing some really great work to grow our technology sectors. So, you know, I mentioned cybersecurity, we're also focused on fintech and AI, just given some of our competitive advantages around existing businesses in those sectors and our talent pool. So as part of that, we're working to build our own venture capital ecosystem here in D.C. So we're not reliant on Silicon Valley and happy to talk about that more now or later. And we're working to make it easier for international companies and startups to come into D.C. We have a soft landing program, which I can also speak to, to serve the needs of international entrepreneurs that want to come into the U.S. market. So yeah, all that to say, I mean, I think DC, you know, again, we're a very unique city and we're very focused right now on thinking about growing our tech ecosystem as a way to continue to remain this vibrant global city given the changes that are happening with our government.

If I was to weave a consistent thread through the three of you, an important narrative for a city is clarity around who and what to access, right? Whether it's the experiences of Oklahoma and the sectors of Oklahoma or big companies that play a role or the seat of power, to be frank, we use that word, the power, and being able to access lawmakers or policymakers or other folks in that context of a region. It's really important to get that out there. I see that Nigel has a great question, so I'm going to throw it in here because it's appropriate. And by the way, everyone, another 30 or 40 people who have joined us, hit that Q&A button at the bottom and throw questions at us. We're going to get this talk out to, I don't know, 300,000 or 400,000 people when we're done. And so if you want to be mentioned as having a great question for the panel, take advantage of that. Nigel's asking, we heard CIBER grants. We have this question of of being able to access perhaps politicians. Nigel asked, why is there so much red tape to access public funding, to access federal funding, local funding, state funding? What advice do you each have? Levi, of course, too, if you have some perspective on this. What do you have with regard to advice as to how to streamline that or to be more involved in that process of accessing any sort of public funding that's available? Any thoughts? Elizabeth, you want to keep going with that one?

Yeah, sure. So I will say, you know, I don't work for the district, so I don't control any of our local dollars. But I know that some of the programs that we've launched here in the district to support startups are designed to minimize that red tape and to make it as streamlined as possible. You know, recognizing that that's going to be what's most helpful and most impactful. We don't want people to have to jump through a lot of hoops. At the same time, we have to be good stewards of our public tax dollars. So I think it's just hitting that right balance between designing programs that are easy enough to access and ensuring we're also investing in companies that are going to stay in DC and contribute to the DC economy, because that's ultimately our measure of success. Creating jobs for DC residents is really what we're driving towards. So there's a few different programs that we have here in DC depending on company stage. So probably the biggest, which I mentioned, or briefly mentioned, is the DC Venture Venture Fund, which was announced earlier this year. It's a combination of public and private funding, so the total pool is $52 million, and that's going to be equity investments in early-stage and seed companies, again with that focus on supporting DC-based entrepreneurs who are going to be staying here and growing here. We also have— DC has a Growth Fund, which is for later growth-stage companies. Some of the requirements there are around total number of employees and projected job growth. And so that is a competitive grant program. So again, those are designed to be as easy as possible to access once founders and companies are able to demonstrate that they meet certain qualifications.

Hunter, Levi, any thoughts accessing that public funding more efficiently or effectively?

Yeah, I think so. I come from the private sector startups in BC. This is my first public sector role in the space. And one of the things I've learned is just the often really counterintuitive constraints that public sector entities are under in terms of trying to distribute this capital. We're literally in the middle of this conversation right now because we have some funding that we would like to route to some of our founders and we're trying to figure out how we do it. And so I guess one piece of advice I would have is try to figure out within your city government who's responsible for allocating navigating the funds that you're looking at and just try to have a low-pressure conversation with them about what constraints they're managing. They'll usually be pretty open about it, but it's not necessarily something that's going to be broadcast. And once you kind of understand the shape of the situation that you're navigating, it can become a lot easier to figure out how to, you know, how to apply for that money or do whatever needs to be done to make it accessible. But just recognizing there's an enormous difference in how the funds are managed depending on where they come from. There are often restrictions, especially if it's federal grant funding that's being rerouted And then the other thing that's really interesting that was news to me as I started exploring this topic more is liability over how the funds are distributed is also a big concern. And so the cities or whatever municipal government you're talking to is going to be concerned about the possibility of exposing themselves to some kind of legal action or liability based on how they make a decision to allocate the funds and what's done with the funds. So biggest thing I'd say there is just make sure you understand that and understand too that, you know, encounter from founders a lot that I think a lack of understanding that there's an enormous difference between funds coming from the federal public sector, funds coming from local or state, and funds coming from private, you know, private entities that are granting money. All of these very, very different situations. So just make sure you understand the distinctions and get as deep as you can into what kinds of parameters they're working with.

I echo a lot of what Levi just said. Here in Tulsa, I would say, and just in Oklahoma in general, we have a a program called OK Catalyst, which helps, you know, founders and startup founders apply for certain SBIR/STR funding programs. So some of those different, I would say, RFPs that they put out, we actually help founders write those grants, win those grants, and also be a value add to whatever grant that they're applying for. So whatever federal entity it is, whether it's the US Air Force, Navy, Army, whatever it is, we have a program that's actually set up to help founders win those grants. So that is one of the things I would say is like, just touch base with your local state. I would say like state government and see if they have any programs set up like this to help you win those types of contracts. One of the things that I've been very interested in as of recently is like finding solutions to help founders win those grants. So like if there's an organization that can partner with the OK Catalyst to help founders increase their probability of winning those grants and having a better chance of commercialization within the federal government, that is amazing. So, you know, those are some of the solutions that I'm looking for just to, I would say, allocate resources around winning those types of contracts. But here in Oklahoma, that's one of the ways that we help founders do that and kind of cut that red tape.

Cheers. A bit of what I'm hearing is certainly— so I work in public affairs, everybody, which, which means what? I tend to deal with the government more than more than a business development or partnership kind of role. I teach politicians how startups work. And so a common thread that I'm hearing is certainly that getting to know these folks who make these allocations or make these decisions is paramount. And there's a lot of truth to that. Everyone should appreciate that politicians, folks in government, they're doing their best to set policy. But at the end of the day, They're not venture capitalists. They're likely not entrepreneurs. And they certainly don't understand the substantial implication of AI versus blockchain versus cryptocurrency. And so, that application for funding may get you so far, but actually having a conversation with these kind of people is one of the best things you possibly can do. Let me put the three of you on the spot a little bit and reverse the question, right? We were talking about why VC should invest in your city as a startup. What have you changed? Try to give everybody some ideas for what they could do differently. What are you doing differently than 5 or 10 years ago? What have you found didn't work or wasn't quite right? What have you introduced to your city or your region of the world that might be new, a different business model, a different program? To help address the cities that are still struggling with this and trying to figure out how to do things differently. Hunter, I still have you on screen. Do you have any thoughts?

Well, I haven't been in Tulsa 5 years. I've only been in Tulsa for almost a year and a half, but some of the changes that I've seen since I've been there have largely been around how we allocate resources to invest— not investors, but to founders. We had a large restructuring of a large VC— we had a restructuring of a large VC firm here in Tulsa. Tulsa, Oklahoma. And so that has left a void for us to fill in a certain way. And so a lot of people may be taken aback by that to come to Tulsa to invest in the companies because this, this firm was investing in the firms and then also investing in the startups as well. But part of them investing in the firms was to have them invest into some of the companies that are being sprung up out of the Tulsa ecosystem. So I think that honestly why some like venture capitalists or investors may avoid the Tulsa ecosystem is because there's not a lot of funds being allocated towards VC funds. That's one of the reasons why I think that a lot of investors may shy back from us. But at Build in Tulsa, one of the ways we've been trying to mitigate this is having, you know, what we call the Build Venture Summit, where we invite a number of different investors out and they can connect with different LPs to show them, you know, the power of networking just here in Middle America. You know, Tulsa is known as flyover country. But one of the things that has been done is MidCon VC Summit. We have a number of different LPs, GPs, and founders come out. We host different events to show them like, hey, like the heartland is still moving and grooving, as I like to say. So, you know, a lot of people may be drawn back by like having a company come out of like middle of America and not have the same valuation as, you know, the coast. But when a company comes out of middle of America and they get a stamp from a coastal VC, that valuation jumps probably 2, 3x. So that's why one of the reasons why I would like people to invest in our companies more, but come invest in our companies and not try to take them away. You know, we would love to see that valuation jump. Of course, we don't want these companies to leave the Tulsa ecosystem. And so when we do a lot of work with partners like Regent Bank, you know, Tulsa Innovation Labs and all these other people that are like like at the table, they want to be active, you know, we just try to go ahead and like elevate that. And that's kind of one of the things that we do in Tulsa. So a lot of people may be drawn back by there's not a lot of dry powder to spread in Tulsa, but at the same time, it's like we're still trying to like see what we can do best. And I think those industries that I outlined earlier are where we can actually succeed in.

Cheers to that. Elizabeth, when you kicked us off, this morning or afternoon. I always forget that y'all could be in any time zone anywhere in the world. When you kicked us off, you shared that Washington is actually changing quite a bit as it starts to embrace a lot more innovation and entrepreneurship and moving away from a government town. Give us a sense for this question. What are you seeing that's being done distinctly differently than, say, 5 years ago to help make this meaningful for for capital investors?

Yeah, yeah. So right, 5 years ago, DC wasn't really thinking about tech as a driver of our economy. I mean, right, historically, our city has been about the feds, eds, and meds. So government, educational institutions, and we have a lot of healthcare infrastructure and institutions as well. And we were, you know, doing well, and that was kind of rolling along. And then post-pandemic and given some of the big changes that the current administration is enacting, the district has really been focused on how do we support the private sector as a driver of our economy and as a generator of jobs. And a large part of that is also just leveraging the talent base that D.C. has. We have an incredibly skilled labor pool, one of the most highly educated cities in the country. So both encouraging entrepreneurship amongst our talent and also ensuring that, right, for outside investors, they're aware of all of the talent and ideas happening here. So all of that has kind of contributed to this focus on growing the tech economy in DC, and so the district has created a suite of programs and funding tools to support that. One of those is the initiative I work on here in the neighborhood that I serve in downtown DC around building this neighborhood as a hub. Hub for an innovation district, and that it manifests itself in a variety of different initiatives and programs. So one is going to be the new accelerator that we're doing in partnership with Founder Institute. There's our soft landing program to support international startups and attract them to DC. So I think, you know, now that we've all kind of coalesced around some of the sectors we're trying to grow and, and the city has provided direction and vision around growing DC's tech economy, company, we are starting to see a lot of new activity. I mean, in terms of VC coming into the city, that's been on a pretty steady uptick over the past few years in terms of dollars getting invested in deals here. At the beginning of this year, we had a huge VC deal in a nuclear energy company. So that continues to be kind of a bright spot. I think one potential downside we're hearing now is given some of the volatility at the federal level and the job cuts that have happened, I think some investors are feeling a little risk-averse and wanting to see more stability. So that'll be something we, you know, the district continues to think about. And outside of obviously the large federal presence here, how we're working to ensure our city continues to be strong and to grow.

Wonderful thoughts. I want to kick it to you too, Levi, but I want to highlight something that you just shared that I find in a lot of ecosystems where we're encouraging what you might consider business investors more than startup investors to get involved in the ecosystem. And one of the things we found in a lot of our research about venture capital investing, everybody, is that risk aversion, which Elizabeth just referred to, is one of the leading reasons why venture capital doesn't invest, that the risks are just too great or that the investors, in fact, aren't comfortable with that risk. And I'm pointing it out because what's also interesting is most of the unicorns emerge during recessions. So it's actually when the economy's not going well that we find that entrepreneurs put in a lot more effort, put in a lot more work, and the real venture capital investors rise to the occasion. That in your part of the world, you might look to discerning that better. Who are the investors that actually want to invest in innovative, high-risk kind of things and distinguish them from the folks who are looking for business opportunities or to invest in companies? They're starkly different. Levi, before I ask you the same question, let me acknowledge something or point something out for the audience. I see a bunch of questions about DC. I see even some questions about Chicago. I got one in here for Seattle specifically. I appreciate that, but for the sake of time, let me encourage everybody who wants to get to know the panelists or even me directly and ask specifically about a city, go ahead and reach out to them on LinkedIn. In. I love having these kind of conversations about everywhere. I'm sure Hunter and Levi and Elizabeth would do the same. I'd like to get in the questions that are kind of bigger picture for the sake of everybody rather than drilling into something specific about Tulsa.

Okay?

So just so you know why I'm not likely to bring those up unless we end up with extra time. Levi, over to you really quickly. What do you think has had to change substantially in the last 5 or 10 years from the way we used to do things to the way we were trying to do them now?

Well, like Hunter, I've only been in this position a couple of years, so hard for me to share kind of quite that much perspective. But I think one of the things that I've been learning or seeing is just, I think there's better success when the public sector can interface a little bit better with the private sector for this kind of collaboration. And it's just as much about knowledge and learning as it is about network. So one of the things my colleague and I do a great deal of in our roles running the this, this, this, you know, public sector program Startup 425 for private companies and entrepreneurs is really act almost as internal consultants to the cities and just help to sort of translate what's going on in the world of VC, in the world of tech, what the terms mean, you know, and how these things kind of differ from small business. This could be regional, I'm not sure, but in my experience, the folks that I work with in the public sector, less familiar with kind of the tech industry, the world of startups, very familiar with small businesses and how that, that those dynamics and economics work. And so I think approaching it from kind of a learning mindset has been very, very helpful. That's something I've seen. And then just having kind of the political will really to follow through. The kinds of things that we want to do are not enormously difficult, but can be politically challenging to navigate in some contexts, like, you know, providing funding to the founders like I was describing earlier. And so really just making sure that we're able to connect with folks who are willing to to kind of sponsor some of these initiatives is really important. And that's, that's what we're finding, you know, in this program with the city of Bellevue and the other partner cities that we're working with is just a lot of interest in being willing to take some risks to experiment with some new ideas, and really kind of to adopt a lot of the same perspectives that one would expect to see in an early-stage VC fund or startup itself. I think what one of the really important elements is just understanding that you can't, you can't isolate particular components of a healthy startup ecosystem, and expect to have real benefit, right? These things are synergistic, they work together. And so in building this program, what we've done, you know, we started off with building network, building access to knowledge capital through event series, things like this. Then we moved into education, we're working with Founder Institute to run our accelerator program. That's been, you know, hugely beneficial and created a lot of buzz as well. And it helps us kind of surface really great founders who've gone through the program program. Next area that we're starting to explore is how do we start getting some capital to these companies, right? Money is, of course, another major pillar. And then the last component, which Bellevue is actually doing some really interesting stuff with right now, is figuring out, you know, how do we, how do we actually support our startup economy more directly? And so, you know, one of the areas that we're looking at is, can we, can we create pathways for, you know, local, like public sector organizations and city government to actually become customers of these startups to pilot programs, right? And that, that has, enormous benefit for our startups because it validates them at the early stage for funding, gets a great logo on their pitch deck, gets them early revenue, gets some close interaction with an actual customer that's actually using their product, you know, where appropriate. And so a lot of what we're doing is really just trying to kind of listen to what the startups need and figure out— and by startup, I should clarify, but what the small businesses and startups need and figure out how to get them those resources. It's a question of navigating, frankly, a lot of red tape and a lot of systems that weren't really designed for this. But if you can, if you can have people who are willing to look at a system see what it's lacking and make the effort to change it rather than kind of sitting back and saying, well, this is the way it's always been done and that's how we have to do it. I think that that kind of mindset shift is at the most foundational basis of really everything else that follows. It's all possible. It's just, you know, sometimes challenging. So one of the things that's been a really big help for us is really just looking at some other cities and saying, look, Detroit's doing this, LA is doing that. New York has this amazing program, right? Why can't we do the same thing? Yes, we're much smaller, but there's no reason why we can't replicate some of these great programs. Programs and have the same benefits. And guess what, if we do that, we'll be one of the smallest cities doing it, right? That's immediately a feather in our cap, things like, you know, creating these kinds of innovation programs. So I think bringing that kind of creativity to the table has been great. We really, my colleague and I in building this program have encountered a very collaborative, very supportive mindset with the city of Bellevue and the partner cities. And that's really what's made the difference. If we didn't have that kind of support, that kind of appetite were really jumping in and figuring things out, we would not be able to accomplish very much at all.

Um, yeah, yeah, cheers to that. I'm going to answer one of these questions directly because it's a pretty straightforward question and it, uh, it ties to the, the next question I have for the panel. Uh, for the sake of the audience, I only have 2 more questions, uh, and, and actually for the sake of the panel, I got 2 more questions for you. But, but Lo asked, um, if your company is situated in different states Is it okay to get funding from both states? And that's a really important question because I find that there are a lot of— there's a lot of conventional wisdom that we all think we're familiar with that entrepreneurs may not be. The fact that the short answer is yes, of course, you can pull capital from anywhere in the US from any state. Any state. You certainly can pull capital from any country. What, what you want to be careful of is, is the country considerations, right? That different countries have different laws, different tax implications, and so forth. The reason I'm answering that for low is, is for the panel. We just mentioned a couple of times the use of, of infrastructure. And for those of you familiar with Founder Institute, you probably are familiar with Founder Institute in the context of a local cohort, a local incubator that we might run in your city or country, the better appreciation of what Founder Institute actually does is that we've built the infrastructure that is a global platform for entrepreneurs and mentors and investors to connect. And to Lo's question, the reason for that is because while you may not have a lot of investors in your community or in your country, they're certainly everywhere else. And so as we've been running what, 300 or so now programs throughout the world, we built this infrastructure that everyone can use, everybody should use. So you may as well just reach out to me afterward to get it to ensure that you have those connections and you have that access. What Elizabeth is doing in Washington, D.C. is actually branded PennWest. It's not a Founder Institute identity. It's something that we're just helping deliver and helping enable these entrepreneurs and mentors and investors in Washington, D.C. to better connect with everybody else in the world since a lot of the founders there may not find capital locally. They might want to pull that in from New York or some other part of the world where something like Founder Institute has access to it. Let me kick that to the panel. Talk to us a little bit about what we mean when we say infrastructure, right? It's not necessarily just a platform or software. What kind of What kind of infrastructure, for the sake of the economic development folks, for the sake of the policymakers, what kind of infrastructure do you think is important to enabling entrepreneurs to be successful? There you go, Levi, do it.

Oh, sorry, Paul.

No, no.

To preempt you. Well, one angle I'd like to take on this because I think there's a lot of ways to approach it, but one thing I want to call out is just kind of the culture of the area.

Area.

I think that's something that can be carefully managed and encouraged. But one of the biggest distinctions that I hear from founders who are active in fundraising multiple different regions, their preferences tend to be for regions where there's strong kind of cross-pollination at in-person live events between founders of all different stages and investors of different sizes. And that really seems to be a big, big differentiator for a lot of founders in terms of the quality of an ecosystem. Ecosystem. That's definitely something we struggle with in the Seattle region. We've got a lot of activity in our, in our kind of social action, social events with early-stage founders and smaller early-stage investors. And as soon as you get past kind of late seed stage, it sort of drops off and disappears. And so I think thinking about how to kind of consciously and intentionally cultivate those kinds of networks, is extremely important. And sometimes that takes the form of actual physical resources, incubators, physical locations, those are really useful. But a lot of it has to do with kind of the behavior and the manner by which your larger funds engage, in my experience, with the ecosystem. So I think those elements are really, really important. One of the things that we struggle with in Seattle that I think contributes to this problem, and when I say Seattle, I mean the overall broader region, is we have a real, compared to the overall size of our ecosystem, we have a real lack of very early stage investors, kind of the angel investors putting those first checks in. There's a lot of hypotheses about this. I'd say the most popular one and the one which I personally think is, I subscribe to, is that a lot of our high net worth individuals here who would be those angel investors made their wealth in corporate executive roles, not in startups, and tend to be extremely risk averse when it comes to investing in startups or just totally willing. And so what results is out of the few who are willing to invest, as one founder put it to me, and I think this is the best way to say it, they want to invest on pre-seed terms with seed stage traction. And we see that a lot. So what ends up happening as a result is a lot of our early stage founders are really top-notch founders, they end up going outside of the city for their first round. And then when they come back their second, third rounds, they might raise some from Seattle, but there seems to really be a consciousness that, you know, Seattle is wasn't what gave them their start. This city is not what believed in them to start. It was somewhere else. It was investors somewhere else. And so, you know, their attention, you know, if and when they are successful, is split. And often they feel more focused on those other regions, which then just exacerbates our problem of not having enough early-stage capital. And so trying to kind of square that circle has been a major focus of attention for myself and a lot of other folks in the area who work with the early-stage community, particularly. And thinking about how to do that, I think, is very important. So we have some really interesting programs here One of the ones I really like is the Seattle Angel Conference, which describes itself as an accelerator for angel investors. And I think it's really a brilliant way to kind of tackle that problem. So it's something we think about a lot. Trying to keep a healthy Founder Institute chapter is also very important because it's really some of the earliest industry agnostic programming that we have in the region, you know, to help founders get started. But really thinking about the roots, I think, I think is extremely important here. Anyway, I just wanted to kind of take a moment to sort of focus on the human and cultural aspects in terms of taking a more, maybe more creative approach to your question about infrastructure.

No, I love that, especially your point about culture. Culture is in and of itself a bit of infrastructure, at least should be thought of as that in order to maintain it. And I see some questions about trying to maintain it that maybe we'll be able to squeeze in. Elizabeth Hunter, any thoughts on this topic? How do you approach the idea of infrastructure and making sure that it's in place?

I would say here in Tulsa, one of the things that we've been doing a good job of is programming, but so much so it's like coming from the Bay Area and working in Silicon Valley, I feel like sometimes we're, we're doing a lot of over-programming and underfunding because same to Levi's point, we don't have a lot of like later stage investors coming in with seed, Series A when it's that time. So we have a couple companies that are that are in our ecosystem that are like later stage companies, they just, they have to move around. They may have to go to Austin, they have to go to the Bay Area and go search for funding. But for us, the infrastructure play right now that we are trying to run is more so of like programming around certain industries on the earlier stages and then bringing in those corporate partners. So if you think about like the energy sectors and the companies we're trying to cultivate in the energy sector, we're trying to bring in the Williams, you know, oil and gas, H&P oil and gas, you know, those type of people, QuikTrip. And so we're seeing a lot of traction on that front, which is making it more of a, well, we're getting more of a buy-in from that front in regards to collaboration. Another thing that we've done too in regards to investing in infrastructure is partnering with Microsoft and also NVIDIA. So NVIDIA, you know, you all know it's like some, like one of the largest companies in the US or in the world. And so with us partnering with them and teaching the community and then also other founders about AI, how to use AI and implement it in a way to build successful companies, it's been a way to attract more people to these startups, startup ecosystem in Tulsa. And that has been great because we've seen an uptick in the number of organizations or startup founders that have applied for programming. When we think about angel funding, though, We're running into some of the same problems that Levi is running into in Seattle, which I think is crazy. So it's like, just like all the attendees here, I'm learning a lot from all the panelists. So we are trying to start an angel program in Tulsa, and it's been kind of like a chicken and the egg dilemma. So we have startups, but we don't have investors, or we have investors that don't want to invest in the types of startups we have. So it's right now we're trying to understand Okay, where is the equilibrium across the ecosystem where everyone sees the value add and invest in these types of companies and these type of companies can extract the value from the ecosystem? And that is one of the ways I feel like the Tulsa ecosystem can be a little bit better, but we're working on it and we're investing in those types of programs and organizations to do that. So when you think about Rose Rock Bridge, which is focused on those companies that are in the energy sector, the sustainability sector, we're giving them, you know, upwards of $100K to go through a program, but then also connecting them with corporate partners. When you think about GRID-X, GRID-X is attracting Latin American companies to Tulsa. We're paying them upwards of $100K to come to Tulsa and stay in the Tulsa ecosystem and connecting them with different biotech types of partners for them to scale their businesses. And so when we think about, you know, investing in the OSU, the local, the local university systems, like University of Tulsa, OU, that has been a way for us to attract more founders to our ecosystem and also give them a way to scale their companies. So that's the way that we're thinking about infrastructure here in Tulsa, and it's been kind of good so far.

Brilliant. Elizabeth, before I, before I kick the same thought to you, let me, let me lead us to the next question a little bit, just since we're We're going to be done in about 8 minutes, everybody. And by the way, everybody, we're going to share an Airmeet to move over to at the top of the hour. If you would like to stick around and network or get to know some people, we can certainly answer some more questions at that point. I'll be there. The panelists may or may not be able to join us. Nobody's required to stick around for the event afterward, but there will be an opportunity to connect better when we're done with the panel. The question that I want Elizabeth to finish off with, of course, is this question of infrastructure. But the poll that we just put up is really what I want to be our last question for all three of you. And that's this question of scaling startups. And I'm seeing some good questions from Mike, Yolanda, thank you very much. This question of how to get a flywheel going or how to get more momentum going to get these startups to scale, because that's certainly one of the questions that's important to venture capital investors. And arguably, it's one of the benefits of making sure that we have this kind of infrastructure in place that helps connect people, helps promote things, helps drive more attention and awareness on some things. So take that poll for us. We'll wrap up with that last question about scaling. But before I get there, Elizabeth, talk to us about your perspective on this idea of having infrastructure in place. What kind of things do you need to have in place? What's working for you? For you? What should other people be thinking about? Any, any thoughts?

Yeah, and I can be brief here because I think a lot of what both Levi and Hunter said, um, uh, are relevant for, for DC as well. But I mean, in terms of, you know, how, how we're thinking about it, a lot of it is on the programmatic side. So how are we building and creating programs to support founders and startups here in DC? Um, so like the, the accelerator that we're doing with Founder Institute is part that. There's a few other initiatives in that realm going on. So wanting to make sure we have the supports in place for people who want to take the startup and entrepreneur route. I think Levi, you mentioned physical space. That's also something we're focused on, making sure the community has a place to gather where these programs can take place, really creating a hub of activity to bring together both the the public and private sector, bring in some of the universities in the region, really trying to create a physical center to anchor DC's tech community. So that's another piece of infrastructure that we're wanting to build. And then in terms of the funding ecosystem, definitely hearing about difficulties accessing early-stage capital. So that's why DC is doing this DC Venture Fund to focus on early-stage companies companies. And then I think also definitely a focus, I think, Hunter, you spoke to this in terms of our specific growth sectors and where we're looking to grow private sector. How do we find those corporate entities that might not be in DC and bring them here and help them be drivers of our innovation economy as well?

Perfect. Actually, that was a wonderful way to wrap up that topic because we see, and in fact it's in the poll results already. When we push those out, you'll see it. I hope everybody takes it. I see about half of the audience has taken the poll so far. It's this consistent concern that we can't pull in the early-stage capital or we don't have the early-stage capital. And on the economic side of things, we've studied this rather exhaustively. It's actually not a lack of capital that's the problem. It's something else that's preventing the capital from participating. And so this last question of scaling startups more substantially, growing startups more substantially, starting the flywheel, which was one of the questions that we got asked, how do you get the flywheel going? One of the reasons we wanted to have this discussion about the economy, the local economy, and with you folks as opposed to startup founders or VCs, is to ask about the ecosystem and the economy. What is it that we think we're struggling with collectively? What do we think we're all struggling with when it comes to scaling startups more? And I want to stress again, the poll suggests exactly what a lot of people tend to say. It's that we can't get angel funding. It's that we can't get seed funding. And I tend to challenge that a little bit because I find that it's something else, right? It's that the startups aren't growing effectively or the startups don't the startups don't have mentors or the startups don't have access to experience. Let's leave the last few minutes with the panel on that question. What is it that you think we're struggling with so that regions can better address that and help startups scale more effectively? Thoughts? Elizabeth, you want to keep going if you have a thought?

I can start. I feel like I'm maybe not best positioned to answer this, since startup growth is one aspect of the economic development work that we do here in the Golden Triangle. I mean, I do think access to capital is a challenge. I'm not— I mean, I hear what you're saying. So definitely recognize it's not the only piece. But I mean, that is something the district has an ability to influence. And so we're trying to address that. I think a challenge may be particular to D.C. is our affordability compared to the rest of the region. So both Maryland and, Maryland and Virginia offer more competitive incentives often than DC can to support startups. And so we have seen founders who want to stay in DC, but just becomes a matter of affordability. And so they go to Maryland or Virginia. So that's a challenge, you know, obviously for the region, I mean, it's, it's a net positive. But when we think about the district's economy, that's something to think about is how do we keep folks in the city? Yeah.

Good. Hunter, Levi, quick, quick thought, you know, 30-second hotshot. How do we, how do we scale startups better?

I would say it has to be customers. I feel like a lot of what we do in Tulsa, we do a lot of early-stage funding and a lot of it is non- dilutive. So that's very founder-friendly. It's not even a SAFE, it's not even a convertible note. So when you're offering founders a lot of non-dilutive funding, I mean, a lot of them jump at it. They take this non-dilutive funding and then it's like, okay, let me try to grow here in Tulsa. But when you realize none of the customers that you serve or your ICP isn't in Tulsa or Oklahoma, then you're now trying to jump ship to another state and figure out, okay, can I grow in this state. So I feel like a lot of what we do in Oklahoma has to be around, you know, we have to source companies and provide that non-dilutive capital to companies that are, I would say, in those industries that, that can serve those ICPs that they have. And I feel like that's one of the ways that we've possibly been failing. But those early customers is just what we see. The capital is not a problem for us in Oklahoma. We have a number of probably want to say like 4 or 5 organizations that provide non-dilutive funding and then also one organization which is Techstars that provides almost a quarter of a million dollars in investment on an equity-based financing term. So for us, it's more so not— it's not the funding piece, it's the customer piece to scale startups.

I'd even add, and then Levi, real quick, I'd even add, it's what I find is it's not it's not even having customers, which is a bit of a misleading notion in startup ecosystems. It's the perception of and the ability to access customers that founders are struggling with, right? They have to be able to get at them. And if it's too hard, then we can't expect investors to presume or hope that they have customers. Levi, quick thought?

Exactly.

Yeah, I mean, I guess I'll try to add something a little new. I would target, at least for our region, for the Seattle region, investor sophistication and education at the early stage. You look at our overall capital, we've got plenty of money here and plenty of money that's willing to be invested. That's not really the problem. The problem is where it's going. It's highly concentrated at certain stages. It's not really available at the earliest stages, highly concentrated in very specific verticals. So if you are an underrepresented founder, if you're building outside of one of those major verticals, you're SOL. There's just not really anything. And then what you do find is you've got investors that, you know, you take their capital and you kind of wish you hadn't later because they're such a pain in the butt. I'm sanitizing my language here.

That's exactly right.

So I think that educational element so that, you know, so that we can have a greater variety of founders and ideas that can source that first-stage funding and get them to the point of traction where they can, you know, move out to the broader market, but also so that, you know, they can find investors who are a value-add beyond capital and not, you know, a drag on their growth. Because the investor is so risk-averse, unsophisticated, or, you know, whatever, whatever the issue is. So, you know, for me, I think that's a, that's a huge concern that does need to be addressed.

Absolutely does. Ankit commented on, on that very point. I'm going to reinforce it as well.

100% agree with Ankit.

Cities, it is investor sophistication, and there are, there are training programs for investors. We, we run angel investor development programs. So encourage that your investment community is learning how this works, not just that they're up and pretending to write checks. It's a very, very important point. Hunter, Elizabeth, Levi, thank you guys very much. Thank you to the audience for being here. I encourage you all to connect with Hunter and Elizabeth and Levi on LinkedIn, and of course get to know Golden Triangle and Startup 425 and Build in Tulsa. There is an Airmeet that's been dropped in the chat, so I encourage everybody who wants to and can pop over there. I'll make my way there as well. Last two things I want to share. Hit fi.co, fi.co/government, because as I shared, we are not just running local cohorts, we are not just running incubators. That's what we've been known for. We're doing it in 270 cities. But the reality is that what we're doing increasingly is trying to help you guys do your jobs better by fixing the fact that many cities throughout the world are having these challenges. I also want to encourage that in a couple of weeks we're going to be having a keynote event, uh, unlocking your region's entrepreneurial potential. Through economic development, somewhat of a similar conversation, but actually more so what specifically you should do, what kind of things you can put in place as a city or through your government. And so I want to encourage you to go to fi.clo slash events slash events to take a peek at that and get registered so you can participate in that upcoming event. One more time, thank you very much, Hunter, Elizabeth, and Levi Velez-Reed. Very good to see you all today. And for those of you that want to hang out, thank you. See you on the Airmeet. Cheers, everybody.