The City of Philadelphia has officially opened the doors on Startup PHL, a proposed $6 million early stage investment fund partnership with an outside venture capital firm and a $500,000 open call for ideas to support entrepreneurship, as Technically Philly first reported last week.
The money could start flowing as early as the first half of 2013.
Startup PHL will likely be the boldest direct entrepreneurial investment by the City of Philadelphia — which may not say much, considering its closest competitor in recent memory is the now fizzled Innovation Philadelphia effort of a half decade ago.
The official announcement came Friday morning on a roof deck above the Independence Visitor Center, as Mayor Nutter and Deputy Mayor for Economic Development Alan Greenberger made plodding allusions to Philadelphia’s colonial-era ‘startup culture,’ which was, of course, largely driven by city newcomers who failed to create lasting legacies.
The event, which was followed by a N3rd Street tour, was more rally than informational, featuring a crowd of more than 70 attendees, including a host of community leaders, business-focused politicians, a smattering of civic-minded entrepreneurs and city officials, in addition to a TV news crew.
With the effort alive, the city is about to bet money on having a local economy and perception bump by way of a still untested tech startup community.
At Friday’s event, appRenaissance CEO Bob Moul, whose corporate resume, role as Philly Startup Leaders president and perhaps even his well-coiffed silver hair, has allowed him to make the Nutter administration more comfortable with the local technology community, made the case for the fund’s importance.
Coming off a Philly Style fashion shoot and wearing a purple checkered dress shirt under a gray sports coat, Moul said $1 billion in investment has left Philadelphia in recent years, pointing to tech community brain drain poster children like Wharton-rooted AdMob, Invite Media, Milo and Warby Parker. If these and other firms had stayed in Philadelphia, Moul argued, the broad perception of Philadelphia and technology’s impact on all of the region would be more likely felt.
Watch Mayor Nutter address the unveiling Friday.
All that said, the Startup PHL effort is very much at the beginning. Updates on the two-tiered effort:
Startup PHL Seed Fund is now an open RFP for a private investment firm to match and manage $3 million from the half-century old, quasi-governmental Philadelphia Industrial Development Corporation to invest in early stage technology businesses. The investments will likely be between $150,000 and $300,000 for firms that have received less than $1 million in previous capital.
According to the RFP, the investment firm does not appear to need to be based in Philadelphia, though the businesses in which they invest will need to be headquartered in the city proper (Manayunk, yes, Bala Cynwyd, no; University City, yes, Conshohocken, no). Part of the RFP negotiating process will involve how long startups will need to commit to staying in Philadelphia and whether a certain percentage of its actual staff will need to be city residents, says Nutter spokesman Luke Butler.
Deadline for submitting proposals will be Dec. 7, and PIDC is hosting an information meeting on Tuesday, Nov. 13 at its Center City offices. Interested respondents must register with David Langlieb at dlanglieb AT pidc-pa.org to attend the meeting.
Startup PHL Call for Ideas is open for submitting ideas until Dec. 14. There may likely be other rounds, but ideas should focusing on innovative looks at growing jobs and supporting entrepreneurship and will likely be less than $25,000.
Watch Khushboo Shah, CEO of cloud efficiency startup Cirrimize and a mentoree of Moul, talk about how the fund could help her.
And in case you can’t read enough about this topic…
- Would Seattle want such an effort, asked Washington state’s GeekWire, comparing it to Oregon’s Portland Seed Fund.
- The Seed Fund RFP focuses on mobile, web-based and other more consumer-driven technology investment, though MedCityNews questions whether the life sciences community of the region might drive that to other innovations. (Though the city wants the private investment fund to drive these decisions, spokesman Butler tells Technically Philly that the effort is for a ‘broad definition of technology.’)
- No fewer than a half dozen other second tier technology markets are battling in the same conversation as Philadelphia, reminds PandoDaily.
- Venturef0rth cofounder Elliot Menschik endorses the seed fund, in an interview with the Business Journal, though Alex U-A of Zivtech tells NewsWorks that the relatively small $6 million is mostly symbolic, if important.
- The Commerce Department’s Greenberger says fund is modeled after the NYC Entrepreneurial Fundstarted by the Bloomberg administration in 2009, reports the Philadelphia Inquirer.
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