Today’s the day that Philadelphia’s innovation community will learn more about StartUp PHL, the city’s most aggressive foray into tech investment.
The press conference is at noon. Mayor Michael Nutter, deputy mayor Alan Greenberger and “members of Philadelphia’s entrepreneurial and startup community” are scheduled to appear. These are the questions I hope they answer.
1. Who’s managing the investment fund?
I’ll bet you a dollar it’s First Round Capital. I think it’d make a lot of sense. I’ve suggested as much in the past.
2. What’s the focus?
This is still a little unclear. The fund is designed to provide seed-stage investment (think $150,000-$300,000) to city-based tech startups. Christopher Wink of Technically Philly reported that the fund will target firms that have received less than $1 million in previous capital. Think small.
As Wink smartly points out, the jury is still out on whether a hard-line focus on consumer-oriented tech startups is a sound bet.
There’s a second component to StartUp PHL: a smaller, $500,000 pool of grant money to support Philly entrepreneurs “of all stripes.” City officials say that “Call for Ideas” fund is a hedge against the bigger bet on tech startups.
Some have wondered whether the seed fund’s definition of “tech” will encompass local health and science startups too. Today we may find out.
3. How long do portfolio companies have to stay?
This, ultimately, is the $6-million question. Here’s the goal of StartUp PHL as laid out on its website:
Startup PHL will lead to more businesses located in Philadelphia, more jobs created, higher tax revenues, and entrepreneurial opportunities being available to a wider range of Philadelphians.
If you plant the seed only to see the growing companies then flock to (and hire) where the big money is (think Warby Parker, AdMob, Invite Media), then those long-term goals will be hard to realize. It will be interesting to see the terms attached to StartUp PHL funding, the length of time portfolio companies must stay.
City government should be commended for trying to stem the tide — at October’s announcement Philly Startup Leaders president Bob Moul said $1 billion in companies have left the area in search of funding over the last five years alone. But the success of the seed fund’s grandiose goals will ultimately rely on the broader ecosystem of ideas, new firms and, ultimately, outside investors.