It’s notoriously difficult for startups to break through and turn good ideas into lasting businesses.
So the winners of the most recent 43North entrepreneurial competition appreciated their position Wednesday: sitting around a table on the 19th floor of M&T Bank’s headquarters, sharing lunch and trading ideas with two veterans of the 160-year-old bank.
It was a chance for a young guard of fledgling business owners to hear from Robert G. Wilmers, M&T’s chairman and CEO, and Rene F. Jones, the bank’s vice chairman.
M&T’s assets total nearly $124 billion, and the bank employs 17,000 employees.
Startups tend to employ only a few employees. And the entrepreneurs dream of reeling in a $1 million investment.
Despite that disparity, the discussion was very much a two-way street.
Wilmers and Jones explained how M&T has grown and how it keeps investing in technology.
And some of the 15 founders from the 10 43North winners told M&T’s leaders about the obstacles they face recruiting talent and attracting capital to grow.
Taylor Mann, CEO of Clean Slate, said the Buffalo Niagara region would benefit from developing a “critical mass of peer companies that you can gain knowledge from.”
“When you get to that level and the number of those companies starts increasing, the mindsets of business leaders and investors starts to change,” Mann said.
43North marks a step in that direction, he said. The annual contest awards money to startups judged to have the best business plans, with the objective they will grow roots in the Buffalo area.
Harris Maxwell, co-founder of a tech firm called Qoints, said another issue for startups here is having a big enough pool from which to draw talent.
Wilmers asked how successful the startups have been attracting investment. John Gavigan, 43North’s executive director, said investors’ funds often come from outside Western New York.
“The challenge that we have is that as soon as you start pulling in outside money, who don’t necessarily share our affinity for the local area, you have some conflicts of interest that can arise down the road,” he said. “So, it’s important for us to have a very healthy investment base in our local community so that we can really help these companies navigate our community and contribute to the economic development.”
William Maggio, 43North’s board chairman, suggested one way to create a larger number of investors in the region, based on what he has seen in life sciences elsewhere.
“What we need to have happen here is, we need to have a company hit it big and give us a hundred millionaires, people who will then go back in the market and reinvest,” Maggio said. “We need to have that happen. And I think we’re closer today to that happening than we were, say, five years ago.”
One guest asked Wilmers how he viewed the “disruption” affecting traditional banking from tech firms providing alternative forms of financial services.
“It’s both a threat and an opportunity,” Wilmers said. “It’s a threat, because you have non-banks attacking us in every way possible. That does two things. One is that it keeps us on our toes. Secondly, it makes us realize there are other ways of doing business than we ever have.”
Both Wilmers and Jones emphasized the bank’s conservative approach, preferring to do business with customers the bank is familiar with, rather than risk lending money to an unfamiliar customer elsewhere in the country and expecting to get paid back.
Despite all the changes technology has brought to the industry, Wilmers said banks remain essential in protecting customers’ financial resources.
“We believe that the majority of people will still want to have a bank, even if they never go into the bank,” he said.
Jones said maintaining that local connection is significant to M&T: “It matters to us that our customers are healthy. We can only grow as fast as the economic development in a community.”
Wilmers was asked what advice he would give to his younger self.
“Work hard, show good judgment and learn from your mistakes,” he said. “You won’t learn from your successes, as much.”