More startup funding opportunities coming to Idaho

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Idaho entrepreneurs should have more funding options in coming months, according to this Boise Startup Week panel. Photo by Sharon Fisher

Idaho entrepreneurs should have more funding opportunities as new organizations are drawn to the region’s business success.

Pioneer Square Labs (PSL) – a Seattle-based startup studio and venture capital fund – was looking at Idaho companies as well as presenting at Boise Startup Week, said T.A. McCann, managing director, during his panel session, “Labs, Studios, & Funds: What it Means to Accelerate a Startup,”

McCann said he doesn’t have any Idaho investments yet.

PSL has both an investment arm and an incubator arm and considers Boise part of the northwest region, he said.

When considering an investment, the company looks primarily for a fit with the founder and the firm, as well as personally, McCann said. PSL invests primarily in software with investments of $500,000 to $2 million, he said.

Different members of his organization have different specialties, but he is particularly interested in quantified health applications, McCann said. For example, he recently invested $2 million in Sentinel Healthcare, a Seattle-based remote patient monitoring product. He invested in the product because he is interested in that field and the business owner – a “doctorpreneur” – understands the customer even though he might be unfamiliar with some functional aspects of running a business, he said.

McCann said he likes it when an entrepreneur has either “domain expertise” in their technical area or “functional expertise” in running a business, but didn’t necessarily expect them to have both. He is particularly interested in startups that already have a good idea of their ideal customer profile and market, their entry point to that market, whom their first few customers will be and why that company is a good solution for that market.

McCann also spent some time during his panel session talking about the concept of a “lead score” or assigning values to each potential lead for the business to ensure the company is focusing on the most likely prospects.

Other panel members included Mike Self, managing partner of StageDotO Ventures, and Molly Otter, investment partner of Sage Growth Capital, each of which have announced investments in Idaho in recent months. Sage Growth has just made its first investment in Idaho, an ice cream company Otter didn’t name.

The other participant on the panel, Sarah Dolen, works in investments and operations for “Area 120,” a Google-owned organization that invests in employee projects. Google famously allocates 20% of employees’ time for their own projects for the company. Dolen has not yet invested in any Idaho companies, she said.

Other funding opportunities

In other potential funding opportunities, Women Entrepreneurs Realizing Opportunities for Capital (WeRoc), which will be held Oct. 24 in Sandy, Utah, at the Miller Business Resource Center, may hold future sessions in Boise, said Jolene Anderson, chapter president of the Boise/ID Keiretsu Forum, who is involved with the event. She and others are pushing for that, she said.

The event, now in its third year, is funded by Venturecapital.org, a Utah based nonprofit organization that assists, coaches and mentors entrepreneurs who are interested in raising investment capital. The event is intended to target women entrepreneurs looking to overcome the hurdles of raising equity for their companies and influencers and investors who focus on investing in women-led companies.

The organization is thinking of alternating years between Utah and Idaho, said John, Williamson, director of Idaho operations with Venturecapital.org and executive in residence for the College of Business and Economics at Boise State University.

This year, of seven organizations presenting, two are from Idaho, according to a press release: Chillow, a roommate-selecting application, and Free to Feed, which helps mothers detect allergens in breast milk.

Williamson said venturecapital.org is also considering holding an Idaho version of its Investors Choice event – an annual funding event in Utah that typically draws a large Idaho contingent.

Idaho entrepreneurs get practice pitching their wares

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James Wagoner demonstrates the Joule Case, a stackable energy storage system that is intended to replace gas generators. Photo by Sharon Fisher.

Four nascent Idaho companies got the opportunity to practice pitching themselves to people who might actually give them money someday.

The Deal Forum is held several times a year by venturecapital.org, a Salt Lake City-based nonprofit venture accelerator, based in Idaho at Boise State University. The organization’s Cooperative Venturing live pitch events feature entrepreneurs seeking capital for their ventures.

The event is intended to provide a safe venue where entrepreneurs can pitch their ventures to a panel of investors to receive feedback on their venture and pitch content, as well as market opportunity assumptions, forecasts or milestones they need to become successful.

Presenters are paired with a Cooperative Venturing Team from venturecapital.org’s Cooperative Venturing Network to prepare for the event. They made 10-minute presentations to an investor panel, which included Blake Hansen, managing partner with Alturas Capital;  Almir Garibovic, CEO and president of PKG User Interface Solutions; Roberta Garvin, due diligence lead of the Boise Angel Alliance; Melanie Rubocki, partner with Perkins Coie; and Mick Wiskerchen, a partner with Rectify Partners.

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Jolene Anderson

“The companies were provided with helpful insights into how to pitch to investors, the importance of selecting the right team, a Go2Market Strategy and Intellectual Property (IP),” said Jolene Anderson, chapter president of the Boise/ID Keiretsu Forum, who served on the cooperative venturing team. “Three of the companies were early stage companies, with the exception of Joule Case, which has already launched with paying customers, filed and received validation of their IP and demonstrated success. While the companies were mostly early stage, the panelists provided valuable input to the founders, which was critical for their stage of development.”

Presenting companies were FACible BioDiagnostics, Cresse Product Development, Jungo and Joule Case.

FACible BioDiagnostics, presented by PhD candidate Steve Burden, is developing a testing platform that is cheaper and faster than existing methods for medical testing. He said he was particularly interested in the flu market, and said his on-site test would produce 90% accuracy in less than 90 minutes for less than $30.

“Results can’t be fast enough if you’re the one that’s sick,” Burden said.

So far, Burden said he’s raised $125,000 and is looking to raise $400,000 more, followed by $2 million to let him develop tests for more conditions. However, some panelists said they were concerned about the ownership of the intellectual property the tests used.

William Cresse, of Cresse Product Development, demonstrated a custom-made pillow he had developed for people with shoulder pain that lets them lie down without putting their weight on their shoulder. As the population ages, there will be an increasing demand for such devices, he said. The company is looking for $350,000 in angel funding to acquire talent and create a mass production method. Some panelists said they felt that the product’s pricing needed work, particularly a better justification for why he’d chosen its price.

Jungo, presented by Ted Douglass, consisted of an application that would allow parents to sign up their soccer-playing children to be able to get evaluations from soccer coaches and put them in touch with colleges.  He is looking for $250,000 in funding, including $80,000 to market the application, which would be for both boy and girl soccer players. Panelists wondered to what degree coaches would be able to provide actionable information to the parents, and about the company’s pricing model.

Finally, James Wagoner presented Joule Case, a stackable electrical storage system that is intended to be used as an alternative to gas generators. The company has been presenting its products to retailers such as D&B Supply, which gave them a list of nine objectives to complete before they could consider themselves market-ready. So far, the company has completed about half of them, he said.

Panelists said that they were concerned about the amount of money the company would need to raise to be able to manufacture its products at a large enough scale to stock retail vendors.

Idaho startups come back from Salt Lake City with funding

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John Williamson is helping teach Idaho entrepreneurs how to get funding, and in the process, building a capital network in Idaho. Photo by Sharon Fisher.

For the second year in a row, a third of the startups presenting at the annual Investors Choice conference in Salt Lake City were from Idaho.

Did it work?

It’s too soon to tell for 2019 — it generally takes a year to hear back about funding — but of the nine companies that presented last year, six have raised more than $7 million, according to John Williamson, who led the two cohorts to the conference.

Williamson, a former senior vice president for commercial banking with KeyBank, fulfills a dual role. He’s director of Idaho operations with venturecapital.org, a Salt Lake City-based nonprofit venture accelerator, and executive in residence for the College of Business and Economics at Boise State University. The dual role gives him a base in Boise where he can identify and train promising Idaho entrepreneurs.

Leif Elgethun, CEO of Retrolux, praised the conference. The Boise-based company, which produces software for the energy-efficient lighting industry, was involved in 2018.

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Leif Elgethun

“Retrolux has participated in multiple Venture Capital programs over the past three years, including their Deal Forum, Pitch Coaching, and the Investors Choice Forum,” said Elgethun. “We’ve found their programs very accessible to participate in and have found tremendous value through the intensive coaching sessions with experienced entrepreneurs, investors and community supporters as well as opportunities to practice selling our idea to investors in pitch practice sessions. It’s like an intensive boot camp for novice entrepreneurs looking to understand their business and how to raise money.”

Another 2018 member was Snacktivist Foods, which went on to win $10,000 in the Trailmix processed food product pitch contest during Boise Startup Week.

In contrast with BSU’s Venture College, which covers the entire entrepreneurship cycle, Williamson’s program focuses on the financial. Venture College takes students who are going to be entrepreneurs and runs them “through the gauntlet,” he said.

“Mine is focused on funding,” Williamson added. “No bucks, no Buck Rogers.”

The goal is to use mentors — Williamson currently has 600, 100 from Idaho, who contribute 15,000 hours a year — to teach entrepreneurs how to talk to investors.

“They’re either a very successful entrepreneur, a very successful investor who knows how to pick winners, or a business services professional, such as a chief financial officer or property attorney, who has built a practice around serving the entrepreneur community,” he said.

The expectation is that successful entrepreneurs will pay it forward, Williamson said.

“We don’t charge entrepreneurs, but if you succeed, come back and be a mentor,” he said.

Williamson is also creating an internship program as liaisons between the mentors and the entrepreneurs. It has grown steadily — last year there were seven; this year there are a dozen and 15 to 20 are expected next year.

The final part of the program is what Williamson calls the “stakeholder summit,” monthly meetings with various organizations that have interest in providing resources to entrepreneurs in the growing Idaho startup ecosystem, such as Trailhead, the Idaho Technology Council, the Venture College and the Idaho Department of Commerce.

“I can do three or four events a year,” he said. “ITC can do a couple. If we combine resources and don’t schedule on top of each other, every three or four weeks we have a reason for that group to come together. Guess what: that’s a capital network.”

Elgethun said he has been pleased with the group’s approach to “supporting budding entrepreneurs and emerging companies.”

“We found them highly engaging with the right tools at the right time to help us not only understand what to do, but also how to do it,” he said.

Ultimately, the aim is to create wealth for Idaho, Williamson said. In Utah, the Investors Choice events have collectively raised $10 billion and created 75,000 new technology jobs — moving technology from 6 percent of Utah’s gross domestic product to 65 percent today.

“We challenge companies to start, find the money and change the world,” Williamson said.