iSelect Named to 2016 'Hot in St. Louis' List

Big news for iSelect: We have been named a winner of Owler’s 2016 “Hot in St. Louis” award!

Owler, a crowdsourced competitive intelligence platform, recognizes the top trending companies in cities around the world annually, choosing from the more than 15 million companies on its platform. Recipients are chosen based on several different metrics, including number of followers, insights collected from our community, social media followers and blog posts over the past year.

iSelect is thrilled to have been named one of the most popular, trending companies in the St. Louis metro area.

But this is just the first step.

As I have written before, the venture capital industry is going through a sea change, as tech investment attention moves from its traditional homeland — the Bay Area of California — to include the whole country. I believe that here in St. Louis, and the Midwest in general, we are sitting on a significant opportunity to harness this trend into significant economic growth.

Just consider the numbers.

According to the National Venture Capital Association (NVCA), VCs invested a total of $59.1 billion in 2015, the highest amount since 2000 and the second-highest on record, and of that total, nearly three quarters went to just 4 metro-areas — the San Francisco Bay area, metropolitan New York, the Boston area, and Los Angeles. Still, nearly 60% of all VC funding goes to just three industries: Software, Media & Entertainment, and IT Services.

Here in the Midwest we’re focusing on “everything else.”

The Great Lakes/Midwest represents over 20% of U.S. GDP, receives 25% of research dollars, and graduates more computer science majors than anywhere else. For us, this means agriculture innovation. It means healthcare technology. It means energy and infrastructure investment. It means looking at all of the innovation that’s going on in this country, both locally and nationwide, and supporting it with our investments.

Work to Be Done

In August 2016, VentureBeat published an article by Chris Olsen, the founder of Columbus, Ohio-based Drive Capital, entitled “In 5 Years the Midwest Will Have More Startups Than Silicon Valley.”

“California is the eighth largest economy in the world,” he wrote. “The Midwest is the fifth. The Midwest is also bigger than Brazil, Russia, and India, each of which have recently caught many a venture capitalist’s eye. The Midwest receives 25% of all research dollars in America and graduates more computer science degrees than any other region or country on planet earth. There are gobs of tech exits at valuations just as large as other places, and yet, the Midwest receives just four percent of the annual venture dollars in America.”

Ben Casselman with FiveThirtyEight.com came to essentially the same conclusion in early September, running the numbers and uncovering the fact the 9.7% of the businesses in St. Louis are startups that are less than one year old, the second highest rate for that figure in the country. Nationally the percentage of new businesses at that stage is around 8%.

Still, only a fraction of all VC investment finds its way to this area as of 2016.

We’re well on our way, but there’s still much work to be done. At iSelect, we’re thrilled to be out in front, helping to drive economic growth both locally and nationwide, but we recognize that this is not something that we can accomplish on our own. If we want the Midwest to blossom into the rich, growing startup ecosystem that we all know it can be, we need help. We need investors. We need advisors. We need innovators. And we need buy-in from the community help us all get there.

Let’s get started.

Consideration

With 2021 well underway and with public markets still strong, we think it is an important time to highlight some of the key private market, venture investment themes that iSelect fund has identified for the year. We believe technologies transforming the Agriculture, Food and Wellness markets will flourish, with a focus on four areas: technologies that enable better food choices to drive better health outcomes, technologies that drive better, more profitable farm operations, technologies that drive the Consumerization of Healthcare, and biome-based treatment technologies. At iSelect, we invest for impact AND performance. We offer qualified investors access to emerging growth companies through our national venture capital strategy. Our unique structure allows our investors to continue to invest in these companies as they develop.

Timing

Why is now the right time for venture? The answer is that now is not explicitly the right time. Venture is something we need in our economy at all times. Now is not better than any other particular time. The question is, why ever stop? When we look at the challenges we’re facing in food and healthcare the reality is there is someone, somewhere who has an insight about how to build a product that will solve those problems. And if they put the right resources to it, they will succeed. As long as we need new technology to make life better or make our lives more enjoyable, we need venture capital to help fuel those entrepreneurs.

What is iSelect as a product?

iSelect is a very unique product, but when you break it into its parts it’s fairly easy to understand. On the front end we’re a traditional venture capital fund. We have a diligence process. We have an investment process. We have categories of industries where we have focus and real expertise, and we invest in companies in those areas that meet requirements for the fund. On the back end we’re unique in that we don’t raise a large amount of capital at one time and deploy it over the life of our fund. Each deal that we bring onto the fund, our investors have to prove and determine to invest in that deal. We have to constantly prove our diligence standards. It’s accessible, transparent and easy for investors to come in and see our comprehensive process.

What is the ideal iSelect company?

We are looking for founders that are passionate and we want the problem they’re trying to solve to be big, real, and painful. We want the solution to be revolutionary and we want our capital to be able to help them solve that problem. We want to know that they have customers involved and that the solution they’ve come up with actually meets those customers’ and market needs. And we want the team to be capital efficient with the money they’re spending.

What does the ideal iSelect company look like?

We’re looking for a company that has an opportunity to have a 10x return to our investment or greater in a period of three to seven years. What excites us at iSelect are companies that are solving big problems. We want companies that are going to be the Monsantos of the future. Not just in the size and the scope, but the impact they have on people’s lives. We want to create positive impacts on people’s lives, so we invest in areas like agricultural production and areas like producing healthy foods for our kids. They are problems that impact real people’s lives on a daily basis. That’s what we’re trying to do at iSelect. We’re trying to solve the big problems out there. Find ways to bring capital to the entrepreneurs who are the real heroes out there getting up every morning, beating away at these things that are problems that you and me and everyone else faces in their everyday lives.

What is iSelect?

iSelect is a venture capital firm. What that means is we look at hundreds and hundreds of different companies and we apply tough diligence standards to each of them, looking at whether the team has a good plan for growing the business, whether the team is qualified and credible, and more. We do that to resolve the few who provide the best opportunities for investors. And then iSelect takes that smaller set of investments and goes to investors who are interested in venture capital and provides a way for them to invest in these companies, either individually or all at once. We co-invest alongside other venture capitalists. We source transactions through to an exit where the company would become public or get bought. And we manage that whole investment process on behalf of our investors.

iSelect Named to 2016 ‘Hot in St. Louis’ List