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  • Economic Vitality
  • 2020

Business Start RateSt. Louis


For a Rust Belt region that was—until recently—perceived as an economy in decline, the St. Louis metro area ranks surprisingly well (#9) in the Business Establishment Start Rate indicator, besting communities such as Dallas-Ft. Worth, Portland and Seattle, while experiencing relatively flat population growth.


Two St. Louis business leaders co-founded Arch Grants, a nonprofit organization that administers an annual competition providing $50,000 equity-free grants and pro bono support services to innovative, scalable, and job-creating startups that agree to locate in St. Louis for at least one year. The program has attracted national and international interest, and has awarded over $6 million in cash grants since 2012 to attract or retain more than 100 early-stage businesses in St. Louis.

“We ask people… to look at our companies that are applying and answer the questions, ‘Are they scalable? Are they innovative? Are they a good fit here in St. Louis?’ Which is unique – it’s something that we look at specifically at Arch Grants because at our core, we’re an economic development organization for St. Louis.”

Emily Lohse-Busch, Executive Director of Arch Grants


In 2004, Missouri ranked as the next-to-last state in terms of its entrepreneurial activity. Many of its large corporations merged with companies headquartered elsewhere, and left the state in the wake of the recession. St. Louis, in particular, bore the brunt of urban decline. City leaders struggled to revitalize its economy and chart a new path forward.

After seeing depressing headlines about job loss and population stagnation, attorney Jerry Schlichter and venture capital consultant Joe Schlafly were motivated to change the city’s reputation for business. They wanted to do something positive for St. Louis that would help the community develop a stronger entrepreneurial infrastructure.

“If we were going to be a robust entrepreneurial city that attracts and keeps young people and builds companies,” Schlichter observed, “we’re going to have to do it from the ground floor.”

Their discussions led to the creation in 2011 of Arch Grants, a nonprofit organization at the center of a movement to accelerate economic development through entrepreneurship. Through its Global Startup Competition, Arch Grants provides $50,000 equity-free grants and pro bono support services to innovative, scalable, and job-creating startups that agree to locate in St. Louis for at least one year. Over 500 local volunteers evaluate the applications and help determine who should receive grants and support, prioritizing diversity. The competition not only attracts and retains the most innovative entrepreneurs to the region, it’s also an aggressive effort to inspire the next generation of employers, civic leaders and philanthropists in St. Louis.

During its inaugural year, Arch Grants received one million dollars from local donors, corporations, public entities, semi-public companies and the state. It had 420 startups apply, 100 semi-finalists and 15 winners, each awarded $50,000 to turn their dreams into reality.

Since its inception, Arch Grants has received nearly 5,000 applications from 44 U.S. states and the District of Columbia. It’s also received applications from over 80 countries, showing that the community’s message is resonating with entrepreneurs around the world. Arch Grants has awarded over $6 million in cash grants since 2012 to attract or retain more than 100 early stage businesses in St. Louis.

To help address the post-Arch Grant phase of growth for startups, in January 2019 the Chaifetz Group announced “Chaifetz STLaunch,” a “Shark Tank”-style competition that could land a St. Louis startup an equity investment of up to $1 million to help them take their business to the next level.

Today, St. Louis is in the midst of a renaissance of entrepreneurship. Since 2011, it has had one of the fastest growing start-up communities in the country. In 2018, Forbes ranked St. Louis second for Top Rising Cities for Startups. To support its entrepreneurial ecosystem, St. Louis is home to 19 startup incubators, 11 accelerators, 22 entrepreneur support organizations, 16 co-working communities and six maker spaces.

With a cost of doing business eight percent below the national average and 57 percent lower than San Francisco, St. Louis has set itself apart as an affordable option for startups. Entrepreneurs are taking advantage of the city’s natural advantages, such as inexpensive office and living space, low-cost electrical capacity, quality research universities, the availability of large older buildings, and a wide range of existing industries, from plant and life sciences to information technology.

Additionally, the overall growth of the St. Louis entrepreneurial ecosystem has resulted in renewed interest and funding from investors nationwide.