A Seattle-based investment company is not only creating a $50 million fund to invest in Boise technology startups but is moving its headquarters to Boise as well.
“We’ve been watching the Boise region for a while,” said Mike Self, general partner with StageDotO Ventures. “It’s like Austin 25 years ago. We don’t think there’s a better region to be investing in than Boise.”
The company made a presentation at the Capital Connect Conference in May announcing its intention to move into an office at 110 Main this summer.
StageDotO’s goal is to bolster Boise’s existing technology and entrepreneur ecosystem, Self said.
"Someone has to come and plant the flag,” he said. “We wanted to invest in local entrepreneurs. The timing was right.”
Currently, there isn’t a venture fund in Boise, so StageDotO plans to fill that gap, Self said. The company has spent the past year or so visiting once a month and decided three months ago to set up the fund.
“This is a 20 to 25-year play,” he said. “We wanted to show the community we were serious.”
The Boise office opened about a month ago, and someone has been there every day since. The company expects to invest in about 10 startups, and the early stage companies will also be housed in the 110 Main building.
“We’ll be elbow-to-elbow with all those companies,” he said.
StageDotO will typically get a seat on the board of companies in which it invests, he said.
About half of the fund will be devoted to seed money to get startups going and multiple funding rounds based on milestones, with the other half toward participating in first-round Series A funding for growth capital, Self said.
“The odds of getting a positive liquidity event are really good,” he said. “We look for companies that have the potential to be billion-dollar companies.”
A typical successful company would receive a total of $5 million over multiple rounds of investment, he said.
PlexTrac Inc., an Eagle-based security company, is starting out with a $1 million investment.
“I was introduced to them a couple of months ago, and they were intrigued by what we were doing,” said Dan DeCloss, founder and CEO. “We didn’t have to do much pitching. Effectively, it fell into our laps.”
PlexTrac is building a software platform that helps companies track the results from security assessments such as penetration testing and the progress the companies are making toward fixing those vulnerabilities, DeCloss said.
“It produces a series of findings that the company needs to go fix,” he said. “Our system helps track all of those results and provides accurate metrics on their progress.”
The product bridges the gap between the security consulting firms and the enterprises, he said.
So far, PlexTrac has three full-time employees and a few contractors, but, with the StageDotO investment, is in the process of hiring two more developers and a sales executive, DeCloss said.
In addition to investing in companies already in Boise, StageDotO may bring companies from outside the region to Boise because it is a lower-cost area, Self said.
Companies in which StageDotO invests could have a variety of exit strategies.
“We want to have as many exits on that freeway as possible,” Self said. “Will they be an acquirer? An acquiree? Do they have aspirations to go public?”
But companies actually don’t have to go public these days to raise capital, he said, citing the case of Qualtrics, a Salt Lake City-based software company that was acquired by the German software company SAP for $8 billion.
Right now, PlexTrac is focused on growth, DeCloss said.
“Our goal is to grow revenue as fast as we can,” he said. “Eventually, if there’s an opportunity to exit in an acquisition or an initial public offering, that’s what we’re looking for.”