Vegas startup community gets support, but still room for growth
Nevada is known for its gaming and tourism industries, but there has been a sustained effort to strengthen the state’s startup community, particularly in Las Vegas.
In recent months, numerous business incubators and accelerator programs have launched in Southern Nevada with many focused on supporting and funding early stage companies in Las Vegas. Most programs are funded by the American Rescue Plan Act or other federal grants.
The extra help comes at a time when the city has seen several new companies launch their services in 2022, such as fintech firm Pomelo, self-driving rental service Halo.Car and Esoes Cosmetics, which makes cosmetics with safety features such as strips. hidden drug testing for drinks.
Mayor Carolyn Goodman thinks the growth stems from how people now view Las Vegas and its potential for entrepreneurs.
“It really comes down to how good it is to do business in Las Vegas,” she said.
In fiscal year 2022, the city issued 3,850 new business licenses, a 10.6 percent increase from 3,481 licenses in fiscal year 2021. However, many in the business and technology community see more room for growth.
Jeff Saling, executive director and founder of nonprofit business incubator StartUpNV, thinks the startup community should “take advantage” of these funding opportunities to continue developing the Las Vegas startup ecosystem.
“If we were to compare our startup ecosystems to others (using) our journeys through school … Silicon Valley (would be) through high school and having a Ph.D. I would say Vegas is probably in high school,” Saling said.
StartUpNV is partnering with government agencies to help administer several new programs for startups in Las Vegas.
Jamie Schwartz, director of industry and business engagement at UNLV’s Office of Economic Development, grew up in Las Vegas. She said the area is still in the early stages of being a dynamic startup community, but has become more serious in recent years.
“We’ve been talking for a long time, really since I was a kid, about the need to diversify the economy down here,” she said. “But I’m not sure I heard that much about using a pullback strategy as a diversification method until maybe five years ago.”
“I feel like we’re at summer camp”
One company that recently relocated to Las Vegas for its business-friendly environment is SafeArbor. It sells lockers aimed at the cannabis industry so customers can easily pick up their orders at the dispensary.
SafeArbor co-founders Marta Spegman and Lindsay Ballengee said the company’s move from Northern California to Las Vegas in 2020 was ideal because it could operate in a smaller startup environment and get funding while working with regulators.
“It was refreshing to get into a place where we could be taken more seriously from an investment perspective, and not, you know, overwhelmed by all the incredible talent that is in Silicon Valley,” Spegman said. “I feel like we’re at a tech entrepreneurship summer camp downtown. It’s this tight-knit group of under 50 people, but that has a bigger network and I think it keeps getting bigger.”
SafeArbor started with $100,000 from family and friends and has raised $270,000 in funding while in Las Vegas, which includes $220,000 from StartUpNV’s AngelNV investment program.
“We were really able to move this at the speed of light here, further and faster than we would have otherwise been able to do through traditional fundraising means,” Ballengee said.
Other startup support services include the nonprofit Tech Alley, which started last year and hosts monthly gatherings for the tech community, and UNLV’s 122-acre Harry Reid Research and Development Park, which hosts students and businesses small.
“We have a strong competitive advantage here, in that every CEO and major organization comes to this city, at least every other year,” Schwartz said. “We have Harry Reid International Airport, all these major conventions — those are big opportunities in one pool to capture a lot of audiences.”
Location, location, location
Michael Luciani, managing partner at investment group Climate Capital, said the firm invested in Las Vegas-based Halo.Car not only because of its mission, but also because of its headquarters.
“I think Las Vegas is a perfect place for (Halo.Car). You have people from all over the country who are visiting Las Vegas who are looking to rent cars and basically have the ability to drive around town as a temporary visitor,” Luciani said.
SeeID, a logistics tracking company, moved its operations from Idaho to Las Vegas in 2020 after considering several other markets, according to William Reny, SeeID co-founder and chief revenue officer.
He said raising capital has been easier than expected and last year, SeeID was able to raise $2.1 million when it aimed to raise $1 million.
“Corporate taxes here are much more business-friendly, and having a hub airport, that’s a big selling point,” Reny said. “I have to give it to Las Vegas; it’s the easiest thing in the world to convince a customer to come see us, because they’re not just here to see us.”
But to continue building Las Vegas’ startup community, it must overcome challenges that cannot be addressed “overnight,” according to Saling.
He said challenges include a more robust higher education system and bringing in more Las Vegas-based funding groups, such as venture capital firms.
He said such firms often develop when local founders “exit” their startup, or take the company public or sell it. And getting successful exit founders to invest back into the startup community creates a “virtuous cycle” of investment, Saling said.
“We need more founders to get to that successful exit so we can continue the rest of that virtuous cycle,” he said. “It will still take 15 to 25 years to consistently implement this effort to end that virtuous cycle. It just takes time to grow these companies and have an exit.”
Contact Sean Hemmersmeier at [email protected] Follow @seanhemmers34 on Twitter.