Funding, scaling startups leads to $12.5 billion in Utah deals

by in — May 16, 2014 6:12 pm

Image courtesy of Brock Best Photography

Utah companies generated more than $12 billion in deals last year in IPOs, mergers and investments, up 12 percent from the previous year. BoomStartup’s Robb Kunz, Pelion Ventures’ Carl Ledbetter and Primary Data’s David Flynn, spoke about  how funding and scaling lead to large financial exits.

At the Mountain West Capital Network’s Deal Flow event today, Drew Yergensen, Vice-President of Key Bank and event chair, announced that this is the best year for deal flow in Utah’s history.

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Filling the funding gap

Robb Kunz, an active angel investor and founder of BoomStartup spoke about filling the funding gap.

A funding gap exists between an initial round of funding from friends and family, and the funds available from formal angel groups, Kunz said. Finding ways to fill that funding is necessary to helping entrepreneurs and startups grow.

BoomStartup, a local startup accelerator, seeks to help fill the gap. By providing seed money, partnerships, mentorship and access to investors, companies are able to move and developer quicker.

“According to the metrics, you have a 3 percent chance to get your company funded if you go through an angel group,” Kunz said. “You have a 70 percent chance if you go through BoomStartup. This new accelerator model is the new upcoming thing.”

Venture Capital in Utah

Carl Ledbetter, managing director at Pelion Venture Partners, spoke about venture capital’s role in Utah.

“There’s a real hot spot here, and there’s a reason for it,” Ledbetter said about Utah.

There are tremendous universities contributing to the talent pool, Ledbetter said. There are also sophisticated and knowledgable investors who know about the industry across the country and across the world.

Utah also hosts the largest amount of people who speak a second language, making it a great place to find people who can help develop markets outside of the U.S.

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Funding in Utah

David Flynn, CEO of Primary Data and founder of Fusion-io, talked about his experiences in building companies in Utah and raising money.

Fusion-io raised over $100 million. Some Series A investors received a 100x return on their investment, proving to be a huge deal here in Utah.

“Any good business deal is done when both parties have something to win out of it,” Flynn said. “It’s important to understand what their motivations are.”

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