Arch Grants has announced it will increase the awards for its annual startup grants competition beginning this year. The program awards annual non-dilutive grants to startups and early-stage businesses who base their operations out of St. Louis for at least one year. Winners receive $75,000, with an additional $25,000 available for eligible applicants to cover relocation costs.
The boost comes following a particularly fruitful year of fundraising for the St. Louis-based accelerator. Public tax filings reported revenue in excess of $15 million for 2020, a nearly 800% increase over the previous year.
“The significant increase in our endowment was largely the result of several major gifts, two of which were one-time endowment gifts in excess of $5 million,” said Executive Director Emily Lohse-Busch. (Arch Grants hosts a list of sustaining donors on its website.)
Arch Grants is a 501(c)3 nonprofit organization founded by St. Louis attorney Jerry Schlicter in 2011. The stated mission of Arch Grants includes developing “entrepreneurs in startup businesses in the city of St. Louis, [in order to] create jobs, combat blight and create community development.”
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In 2011, the year Arch Grants was founded, the country was still grappling with the aftermath of the great recession. Unemployment rates in St. Louis topped 9.4% and—as in many other states—“brain drain” was also a problem. Worse, the city had been burned in the past playing the part of “company town.” Between 2007 and 2010, St. Louis County saw 120,000 workers lose their jobs; 43,000 of those jobs were lost due to the closure of a Chrysler minivan plant, which cost the area an estimated $15 billion.
So, rather than devoting efforts to attract large companies that will come in and provide jobs until leaving for greener pastures, Arch Grants has sought to court smaller companies that could grow together with St. Louis.
“This significant increase in our funding of extraordinary entrepreneurs will ensure St. Louis continues to stand out as an attractive place for early-stage companies to grow,” said Gabe Angieri, director of development and strategy.
The community is invested in the competition as well. A panel of 300 community members helps select the companies that will ultimately receive the non-dilutive grants. And roughly 50% of the funded businesses are from the greater St. Louis area. That puts a stronger focus on long-term, sustainable growth, and is one of the main reasons Arch Grants takes no equity in the companies they fund. `
“It’s a philosophical decision that we’ve made more than anything,” said Lohse-Busch. “There’s ways in a nonprofit model to [take equity] but it’s definitely simpler to do it the way that we do.”
The strong relationships developed between Arch Grants and the companies it funds are what distinguishes it from more traditional funding structures. In fact, Arch Grants becomes a kind of extension of founders’ teams, Lohse-Busch said.
“We need them to feel comfortable coming to us and saying, ‘I need this,’ or ‘I’m having an issue,’” she said. “They interact with us differently than they would with an equity investor.”
Applications for the 2022 Arch Grants Startup Competition will be accepted from March 18 until April 15. Interested parties can sign up at www.archgrants.org/competition to receive competition info and reminders.
