The Entrepreneurial Spirit in the Central City

So, who wants to be a millionaire? Silly question. But, just how do you get the million bucks? One way is to become a successful entrepreneur.

The Federal Reserve Bank of St. Louis recently co-sponsored a seminar titled “The Entrepreneurial Spirit in the Central City.” The other sponsors were the entrepreneurial centers at Washington University and Saint Louis University.  Experts spoke about ways to create a strong environment for entrepreneurship in the central part of St. Louis.

The keynote speaker, Jerome Katz, a management professor at St. Louis University, says that two out of every three millionaires in the United States are their own bosses. 

Take a guess at how many small businesses exist in the St. Louis metropolitan area. The answer is about 210,000. Just about every one is something other than one of those sexy, high-tech business that make the news and that make investors gush.

“In St. Louis, the millionaires started laundries, hotels, drug stores, car dealerships,” Katz says. “About 70 percent of working millionaires are in low-tech, dull, normal industries.”

Businesses need start-up money. Picking a winner isn’t easy. Take the example of 3i, one of the most successful venture capital firms in the world.

• 3i reviews 5,000 business plans every year.
• It checks into just 500 of those plans.
• It pays serious attention to 100 plans.
• It invests in 18.
• It figures 3-5 will make a return on investment.
• It figures one is going to be a winner and make 10 times 3i’s investment cost in five years.

Talk about grim statistics.

“Remember, these are some of the smartest people in the United States and Europe, and they are getting a hit rate of 1 out of 5,000,” Katz says.

Federal, state and local programs offer plenty of financial assistance programs that should appeal to the budding entrepreneur. One big challenge is to keep talented, future business people in St. Louis and not on an airplane to Boston or San Francisco.

“We end up being a farm club for other cities,” says Jerry Schlichter, an attorney and co-founder of Mentor St. Louis. “To change that, we need to create an entrepreneurial spirit in St. Louis.”

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