State senators should endorse two different proposals aimed at improving economic development efforts in Missouri, witnesses said during a Wednesday afternoon committee meeting.
But the Senate's Jobs, Economic Development and Local Government Committee took no action on the bills after the hearing.
Rep. Diane Franklin, R-Camdenton, sponsored a bill creating Rural Regional Development Grants, allowing the state Economic Development department to release up to $5 million a year - but no more than $150,000 per grant, with a limit of two grants for each of the 19 economic development districts created in state law.
The House passed her bill April 16 with a 131-22 vote.
State Rep. Noel Torpey, R-Independence, sponsored a separate bill that would have the department designate five Early-Stage Business Development Corporations (ESBDCs) - one each for the three largest metropolitan areas and two for the rest of the state - to award grants for start-up companies.
The House passed Torpey's bill on April 18, by a 128-24 vote.
Franklin said her bill "is important for rural areas to be able (to) identify what their strengths are, where they need to improve, what their workforce is, (and) what sites they have to develop."
Brian Meisel, assistant vice president of Camdenton's 1st National Bank, is a past president of Lake of the Ozarks Regional Economic Development Council and still serves on that board.
He said the proposed grants would "provide us some matching funds ... to make sure the appropriate things are occurring in workforce development and job creation" in rural areas.
Torpey said his bill would approach the issue of helping start-up companies in two different ways.
"In order to qualify, say in St. Louis, a not-for-profit corporation would have to raise $2 million on their own, and then they could apply to the Department of Economic Development and receive
$2 million for start-up businesses," he told the committee.
"They could then give a $200,000 grant to that start-up company, if it qualified.
"In the rural areas, they would have to raise $150,000, and they would receive $1 million - and they would be given out in loans (because) in the rural areas, it's very difficult to receive seed money and start-up dollars."
St. Louis lawyer Jerry Schlichter helped found "Arch Grants," a not-for-profit agency that's suggested as the model for the proposed ESBDCs.
"We've had great success with a number of applicants from all over the country, and we give $50,000 to those who qualify, that we feel are the "best of the best,'" he explained. "This is a grass-roots effort at developing companies of the future."
He said in its first nine months, Arch Grants has helped 15 startup companies grow revenues from $255,000 to $1.8 million.
Jonathan Leak, chief creative officer for a young company called IDC Projects, told the committee: "We started our company in college, because we were at a technical school - Missouri University of Science and Technology - and we noticed we had a lot of technical students working at Papa John's and Walmart, because it's a small college town and there are not a lot of technical jobs available that aren't university related."
They dreamed of taking their game-creating company to California, after graduation - until they found Arch Grants, won a grant and moved to St. Louis instead.
"Since that time last year, we've made over $100,000 in advertising revenue," Leak said, "changed the focus of our company, thanks to the advising of the Arch Grants mentors and the connections they've made to us, (and) gone from nine, unpaid, independent contractors to 11 salaried employees."
Deraj Patrey, chief operating officer and co-founder of a company called Food Essentials, said Arch Grants' first $50,000 grant had helped them grow "from three employees to 25 - 14 are full time. We've spent more than $600,000 in Missouri, primarily to pay our employees and for their well-being, salaries and those sorts of things, but also to take clients and employees out to Cardinals games, go out to restaurants, pay rent, electricity and Internet.
"That is a 12-times return to Arch Grants donors within 10 months."
And Steve Marciniak, founder of a company called TrakBill LLC, said he moved his tech start-up company from Champaign-Urbana, Ill., to St. Louis in hopes of winning an Arch Grant.
California has been "seen as a big tech scene, but Missouri is where the support has been," he said. People have "shown great support for us, and this has all been due to Arch Grants."
Patrey told the committee Torpey's bill would help create similar grant programs throughout the state.
"And that is why I think this bill should be supported and should be enacted, because my story, to varying degrees of success, will be repeated by dozens, if not hundreds, of companies, if this could really go big," he said.
"And this would really put Missouri on the map as the place to be for young start-ups and entrepreneurs."