The specter of an upcoming recession loomed over the recent Capital Connect Conference, put on by the Idaho Technology Council as a snapshot of the year’s entrepreneurial activity, but results are pretty good, for now.
It’s hard not to think of internet bubble startups like Pets.com when some of the biggest deals of the year were with PetIQ, an Eagle-based pet prescription company. And several speakers alluded to Idaho’s economic future, such as Paris Cole, CEO of Truckstop.com, who said freight volumes in 2019 are half what they were in 2018.
“There is no place to go but down,” said Kyle Mowitz, owner of Imperium Companies, the new owners of the Tamarack Resort.
The amount of deals was down compared with previous years, acknowledged Blake Hansen, managing partner with Alturas Capital and Deal Flow co-chair, but he noted that the number of deals was up, and that there had been no outlier events such as acquisitions by Micron or Albertsons. The biggest event of 2018 happened on the first day: the acquisition of Eagle-based timesheet software developer TSheets by Intuit, for $340 million.
Next year’s Deal Flow report could have a similar outlier, with the acquisition earlier this year of Truckstop.com by the Iconiq family office. But while some industry estimates rank it at $1 billion, which would be the largest investment in Idaho history, thus far neither Truckstop.com nor Iconiq are providing numbers. Cole wouldn’t even name investors, though they are widely considered to be Silicon Valley royalty such as Mark Zuckerberg and Sheryl Sandberg.
In the latest report, Eagle actually outraised Boise, and the Coeur d’Alene region raised another $200 million. Outside of those regions, though, deals were less prevalent.
Much of the emphasis this year was on developing the entrepreneurial ecosystem. The collaboration of organizations such as the Idaho Technology Council, Trailhead Boise, VentureCapital.org, the Boise Angel Alliance, Keiretsu Forum and other stakeholders improve the economic climate for entrepreneurship, said attendee Jolene Anderson, chapter president of the Boise/ID Keiretsu Forum.
“We can point to the recent successes of Truckstop.com, TSheets and others as proof that companies can innovate, grow and thrive in Idaho,” she said.
Other announcements that are aiming to improve the entrepreneurship ecosystem included InquireOf, intended as a sort of LinkedIn to connect investors with industry experts. Currently $1 billion is spent on the diligence process each year, a figure that’s rising 20% annually, said Kyle Sale, co-founder and CEO of the company. Thus far, the company has raised $1.2 million, all from within Idaho, he said.
StagedotO, a Seattle-based venture capital fund focusing on angel- and seed-stage investment, intends to set up an Idaho-only fund and plans to move into an office at 110 Main in Boise this summer, said representative Dave Self. While he’s currently chief administrative officer of St. Luke’s Health Partners, he plans to leave that position by the end of the year, he said.
On the other hand, the Salt Lake City-based private equity fund Banyan Ventures stood on the same stage a year ago to talk about the Idaho-based venture capital fund it intended to start, a plan it decided to scrap later in the summer.
Some speakers also said lack of a skilled workforce was an issue, like Cole, who said he needed to hire 30 to 40 people next year and wasn’t sure whether he could do it here. At the same time, speakers indicated that they weren’t making specific outreach to improve diversity in their organizations, though studies have shown that more diverse companies tend to be more successful.
Diversity in gender and ethnicity represents up to a $500 billion market opportunity, noted Alecia Hoobing, cofounder of Women Innovators, a Boise-based nonprofit intended to support female Idaho entrepreneurs.
The conference also included a number of pitches from startups looking for funding, including Joule Case, as well as updates from companies such as Red Aspen that presented at ITC’s Capital Connecting conference in January.e