A first-of-its-kind venture capital fund will focus solely on Utah tech startup companies and entrepreneurs.
Unveiled during the Silicon Slopes Tech Summit in Salt Lake City, the Silicon Slopes Venture Fund is designed to bolster Utah’s tech ecosystem and replicate industry success that has made Utah a tech hot spot.
“Success breeds success,” said Ryan Smith, co-founder and CEO of Qualtrics and one of three people creating the fund. “So, if there’s something that we can do to give back, the No. 1 thing is, how do we make more organizations successful so that the amazing ride that we are on in Utah continues?”
Smith said such a fund would have been handy when he started running a business 17 years ago.
“Had I had something like this, I guarantee that we could’ve shortened the process to get to where we did — significantly, not just from the funding and the money, but the know-how,” he said.
The fund’s other founders are Josh James, co-founder of Omniture and founder and CEO of Domo, and Jeff Kearl, general partner at Pelion Venture Partners. Pelion will provide the fund’s operational support and management alongside James, Kearl and Smith. The three founders have for years invested in startups, both inside and outside of Utah.
“There’s deals that aren’t getting done,” James told the crowd at the summit. “There’s entrepreneurs out here in this audience right now that are looking for some money, that are looking for some advice, and there needs to be more and more venture funds and angel funds to go around to help get them funded, to help shepherd them to that next level.
“And we love doing it and we’ve been doing it. This just allows us to formalize that and do it a little more effectively.”
Kearl said that he, James and Smith have spent lots of time with young entrepreneurs and students desperate for expertise and advice. “Not only do these younger businesses need expertise, they also need capital,” he said. “So this [fund] created a vehicle where we could come together and provide both of those things to companies in Utah.”
Kearl said that 85 percent of venture capital funding Utah startup companies comes from out-of-state venture firms, and equity profits from those investments ultimately leave Utah. When the Silicon Slopes Venture Fund’s founders raised venture capital for their companies years ago, they went to Silicon Valley.
“When we were starting our businesses in Utah many years ago, we begged for money,” he said. “It was really hard to get anybody to take a bet on us. We were young. We didn’t have any experience. And it was hard.”
But the three also learned how those VC funds operated and will use that experience and knowledge to guide the new Utah fund.
The new fund also is designed to benefit Silicon Slopes, a nonprofit tech organization that has the annual tech summit and other activities designed to serve and promote Utah’s tech community. Most VC firms keep a percentage of the fund’s total amount to cover operating expenses, but the new fund will donate most fees to support the ongoing operation of Silicon Slopes.
Utah has more than 7,000 tech-focused companies and Kearl said the state “feels like Silicon Valley in 1996. It’s an incredible economic boom.” And Smith said he is “blown away” by what Silicon Slopes has become.
All three fund founders have produced gems in Utah’s tech industry. James co-founded and led web analytics powerhouse Omniture, took it public in 2006, and then sold it three years later to Adobe for $1.8 billion. Omniture was Kearl’s first of many angel investments. He later co-founded apparel company Stance and joined Pelion as a general partner in 2019 to focus on investing full time. Smith co-founded Qualtrics, which was sold to SAP in 2019 for $8 billion in the largest private enterprise software acquisition in global tech history.
Smith suggested other Utah entrepreneurs could have similar success, thanks to the new fund.
“Everything about this fund for me is ‘Utah,’” he said. “If I can look back 20 years from now and say, ‘Hey, wow, I helped a company be bigger than Qualtrics or bigger than Domo and had a little part in that?’ Awesome.”