“When you can be a partner for the journey early and provide value, that’s a relationship that is very strong.”
Today at StartSLC, Kickstart Seed Fund will officially announce the close of its third fund. At $39 million, it’s the investment firm’s largest fund to date. Kickstart has also added two new members to its management team. Dalton Wright is joining as a partner and Curt Roberts as a Venture Partner.
On the heels of today’s news, we would like to take you on a journey chronicling the evolution of Kickstart Seed Fund, from nothingness to the most active seed investor in Utah. Interested? Read on.
It may be hard to remember for all you current entrepreneurs, but once upon a time raising money in Utah was hard. Like trying to understand Lou Holtz hard. As a young entrepreneur and venture capitalist, Gavin Christensen realized the unbelievable opportunities available in Utah — a place where entrepreneurs had traditionally left the state in search of funding. Living in New Mexico and working for vSpring Capital, Gavin started toying with the idea of bringing seed funding to the state of Utah. From that barren wasteland came the creation of Kickstart Seed Fund.
“At the time there had been several efforts to do a seed fund and they had all kind of not worked,” Christensen told Beehive Startups in a recent interview. “So I scooped up the ashes from that and worked on really creating a fund that actually drew in the key pieces of the ecosystem from our perspective, which were the universities, large companies here, angel groups, and focus at the seed stage.”
Just like that, Kickstart Seed Fund was formed — if it sounds easy, it most assuredly wasn’t. Right after their first fund came together in 2008, the financial crisis hit. Over the next four years, Gavin scratched and clawed his way to respectability, culminating in a second fund worth $26 million. After moving his family back to Utah in 2012, the roots of Kickstart Seed Fund began to grow.
“In the early days, the thing about Utah was even back then there was a decent amount of capital — not a lot of funds but a lot of angels — that were writing checks,” Christensen said. “The problem was more someone who was willing to lead and provide that kind of leadership and the capital at that early stage. And so Kickstart was a lot about, ‘Hey, we’re providing the spark that really gets the deal going.’”
With increased funding, Gavin has been able to form a reliable team — Dalton Wright, Alex Soffe, Morgan Davis — dedicated to giving Utah entrepreneurs not only money, but direction. And in Utah, the Kickstart Seed Fund has found a valuable talent pool that offers characteristics mirroring their own.
“What we love about Utah entrepreneurs is they make as much progress as they can without money and it gives us a lot more confidence when we write a check that we know where it’s going to go, that they know what to do, they appreciate it, and they’re scrappy,” Christensen said. “That’s who we are as a fund, and so we love entrepreneurs that have those same kind of values.”
Even with the increase in seed funding, many early-stage entrepreneurs were slipping through the cracks, especially in the academic realm. To remedy the problem, Kickstart created the Campus Founders Fund, a $500,000 venture capital fund run by students for students. A student-led Investment Team makes all the funding decisions themselves, handing out money in $10,000-$20,000 chunks to student entrepreneurs with ideas deemed worthy of backing.
“I think our LPs were super excited about Campus Founders Fund because they saw our vision, looking at the track record of some of the best undergrads and/or graduate students in the state and what they’ve done both as entrepreneurs and as VCs,” Christensen said. “Campus Founders Fund was about us getting to know those people and them getting a real kick start early in their career to get exposed to what we do. And also our ability to really help those entrepreneurs that they serve get kick started along as well. We hope to have some return on capital for that, but we recognize this is an investment in the ecosystem for sure.”
It’s easy now to see the value in providing advice and wisdom to the next generation of entrepreneurs — more quality ideas garners more funding, which in turn raises the national profile of Utah as a startup safe-haven. Before Kickstart and the Campus Founders Fund, entrepreneurial students lacked the opportunities that they have now. Now, the process of learning and growing within the venture capital realm is enhanced, strengthened, and expedited.
“One of the things that we did is we involved all the major universities within the state — University of Utah, Utah State and BYU — in Kickstart and I think culturally it was really healthy because we were one of the few things that all of the universities did together,” Christensen said. “When you can be a partner for the journey early and provide value, that’s a relationship that is very strong. With our fund strategy we work to establish those relationships early and be that partner. That’s really what this business is based on and so Campus Founders is the direct result of that — our recognition of the quality of the students of Utah.”
In addition to jumpstarting the entrepreneurial youth of Utah, Kickstart Seed Fund has invested in over 50 companies since 2008, including Lucid Software, Artemis, Creditera, Qzzr, and RackWare. Anyone is eligible to apply for funding — while Kickstart doesn’t fund every business deal, they do promise due diligence for all applications — but make sure you have a good team in place before doing so.
“When we’re investing at the seed stage we’re talking about often businesses that are early into revenue or pre-product market fit and so there’s a hypothesis about what direction the company is going to go but it could easily change,” Christensen said. “It’s the team that makes those decisions, that has the intuition, that puts the data together and that makes those calls and so that’s why the team is so important.”
Even with the growing success Kickstart Seed Fund has experienced over the last five years, Christensen isn’t satisfied. What began as an idea on a whiteboard in New Mexico has transformed into a unique, thriving part of Utah’s entrepreneurial space. What does the future hold?
“Our goal is to be one of the best funds in the world and the way we’re going to do that is by executing on our strategy, of being the place to go for seed funding in Utah,” Christensen said. “I would say the key things I would want people to think about with Kickstart would be, ‘Hey, those are the guys that were the partner for the journey. They added value, they were helpful and they were always the first call I made when there was good or bad news.’ That’s our goal.”
Published 1/30/2015
