In business, as in life, success is often a matter of who you know, as much as what you know.

A new paper released Wednesday from the Kauffman Foundation, entitled Examining the Connections Within the Startup Ecosystem, sheds some light on why that is, as seen through the lens of the nascent startup environment in St. Louis.

Many cities across the U.S., including Boston and New York, are trying to remake themselves and promote business growth, particularly in the technology industry. It's an open question for all of them on how to get things right.

Although the paper is primarily descriptive in nature, offering little by way of concrete numerical results, it sheds some light on which best practices tend to encourage growth the most in small business hubs.

Here are some key factors that can influence a startup environment, according to interviews with about two dozen companies and organizations in St. Louis:

  1. Connection between entrepreneurs, particularly experienced entrepreneurs is critical, extending beyond the confines of one particular industry.
  2. Lots of business support organizations, with plenty of overlapping services, including mentoring, finance, and academic expertise.
  3. Successfully connecting small business owners to those support organizations.
  4. Access to activity-based business events where entrepreneurs practice critical skills. 

While some of these may sound obvious, it's not always easy to create exactly the right mixture. There is only one Silicon Valley, after all. And that's because the tech hub "possesses a unique structure and culture that distinguishingly produces corporate and university spin-offs and networks through which entrepreneurs themselves and venture capitalists interact," the paper's authors say. The report was written by Yasuyuki Motoyama, a researcher at Kauffman, and Karren K. Watkins, a researcher at Washington University in St. Louis.

Money Is Always Welcome

Oh, and another thing--free money never hurts. Twenty of the businesses interviewed received local Arch grants of $50,000, and it turns out those grant recipients felt compelled to monitor and connect with each other.

"The 2013 Arch Grants recipients created a community for learning and support, constantly observing each other's progress and providing feedback about each other's businesses," the study says.

A year after they received those grants, the businesses had created 104 jobs, generated more than $2.8 million in revenue, and raised more than $17 million in investments. That's a pretty good return on $1 million.