The Kauffman Foundation: Bringing Entrepreneurship Up to Date in Kansas City

Before I came to Xconomy, I didn’t know much about the Kansas City-based Kauffman Foundation beyond what I heard on the radio. If you’re an NPR listener like me, you’ve probably heard their underwriting plug that says it’s the “Foundation of Entrepreneurship.”

But then I started covering stories like the foundation’s annual New Economy Index, in which Massachusetts and Washington nabbed the top two spots last year, and its sponsorship of projects like Ed Roberts’ study last February showing that companies founded by MIT graduates have an annual economic output of more than $2 trillion. I began to see that the Kauffman Foundation, to a far greater extent than any of the 116,000 other private foundations in the U.S., is focused on the relationship between company formation and general economic growth—and not just in a theoretical or academic way, but on a very practical level.

It’s a focus that happens to overlap quite a bit with our own obsessions here at Xconomy. In fact, we’re now partnering directly with the foundation, which has become one of the underwriters of our new Startups Channel, a gathering place for startup-related stories from all of the cities in Xconomy’s network. And last week I had an opportunity to visit the foundation’s campus near the University of Missouri, Kansas City, to attend a reception and dinner honoring the inaugural class of Kauffman Entrepreneur Postdoctoral Fellows. The fellows are a group of 13 scientific researchers singled out for their ambitions to commercialize their laboratory discoveries. (Full disclosure: the foundation picked up the costs of my trip.)

Statue of the Kauffmans The foundation was established in 1966 by Ewing Kauffman, an entrepreneurial pharmaceutical salesman who founded Marion Laboratories in 1950 and built it into a multi-billion dollar company. It’s now one of the 30 largest foundations in the U.S., with roughly $2 billion in assets.

Under the leadership of Carl Schramm, its president and CEO since 2002, the Kauffman Foundation has been aggressively searching for new ways to help entrepreneurs build high-growth companies. In remarks at last week’s dinner, Schramm noted that roughly one-third of the nation’s gross domestic product comes from companies that are less than 30 years old. Research by the foundation, he said, has shown that just 300 to 1,000 new startups each year account for most of that one-third. So the question the foundation has set out to answer, through a new initiative called the Kauffman Labs for Enterprise Creation, is “how can we create another 300 to 1,000 high growth firms per year,” Schramm said.

The postdoctoral fellowship program is part of the Kauffman Labs project. Sandra Miller, a senior fellow at the foundation who was brought in from Stanford to run the fellowship program, says one premise is that the existing structure of American graduate and postgraduate training means that technical founders for new science- and technology-driven companies are always in short supply. “You have these people who are so incredibly trained, and are at the forefront of pioneering research, and yet … Next Page »

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Wade Roush is a contributing editor at Xconomy. Follow @wroush

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