While California and New York tend to get the most attention as technology hubs, other states are quietly hosting their own vibrant communities around technology and innovation. Utah is one of these states. Utah is home to tech giants Omniture (which was acquired by Adobe for $1.8 billion), Novell, Symantec. And today, Utah is getting its very own startup incubator, BoomStartup, which is a seed capital and mentor-focused investment program for web and software start-ups based in Utah.
Based in Orem, Utah at the Canyon Park Technology Center (the original site of WordPerfect Corporation), BoomStartup is a full-time program that will run from May to August and provides each selected company with seed capital (up to $15,000), mentoring from entrepreneurs and technologists, free office space and resources, and education that takes them through the various steps of getting a tech startup off the ground. For its first rounds, the organization will choose eight startups to participate in the program. Applicants for BoomStartup must have a founding team (two or more individuals) and an idea with a focus on web, mobile, software, and non‐hardware tech. Startups can apply here.
BoomStartup was founded by Utah angel investor John Richards who invested in Omniture. BoomStartup is made up of seven other mentors and investors in the fund. Each investor-mentor has contributed $15,000 in the fund. Investors include Omniture co-founders Josh James and John Pestana, Ralph Yarro, Nobu Mutaguchi, Martin Frey, and Rod Watson.
It’s always great to see investors and former tech executives investing time (and money) in promising startups and ideas. And we are seeing a plethora of innovative startups emerging from a variety of incubators around the country and world, including Y Combinator, TechStars, The Founder Institute, Launchbox Digital and more.
Continued Richards: “This group of investor-mentors has a track record of growing successful businesses and creating innovative technologies. Their expertise and vision will be invaluable to the selected companies, and give them the know how to overcome the obstacles they might confront, whether that be on the business or technological side.”
BoomStartup will host a series of “Meet the Investor-Mentor Days” through the April 12, 2010 deadline; the first will be held Friday, March 12, 2010 at 4 p.m. at the Canyon Park Technology Center, Building J (1401 N. Research Way, Orem, Utah). Investors-Mentors will be on hand to talk with prospective applicants about business, technology and discuss strategies for their businesses.
Is there such a program in San Diego or Kansas City?
Founder Institute has a San Diego program. Kansas City might be a tough sell right now
Do I have to be a Mormon or from BYU to be part of this company? or will I be discriminated as wicked and a sinner since I am ‘of the world’?
I am saying that because I visited Utah for a conference and pretty much that was the sentiment there, especially with people i came in contact with. The whole world is wicked, except Utah, of course :)
Wow Mike. If ever there were a blanket characterization about a class of persons, I think you just nailed it. You apparently have about as much tolerance for certain groups as you purport the mormons to have (from my experience living in NYC, the mormons I know have been quite nice, frankly).
Talk to me once you are gone to Utah and experienced it yourself.
I know Mormons outside of Utah (I work with one) and they are one of the greatest people I have ever met. But Mormons in Utah are very, very different.
Mike,
I’m mormon and I think you have forgotten the golden rule: revenue forgives all sins. jk I Hope your next visit to Utah is better for you.
I live in Utah, am Mormon, and I invite you to come stay with me at my home any time you want, free of charge. I guarantee you will have a different view of ‘Utah Mormons’. Just because you had a bad experience possibly with one or two Mormons shouldn’t slant your view of all of us.
15k? what’s the point of even dealing with these guys?
$15k is a very small amount of seed funding. It is enough to pay legal expenses to get the company setup and to pay for a utility patent though.
The whole program could be helpful if the mentors help to get you infront of investors for followon funding. The big question for me is: how is receiving this $15k structured? Is this another typical Utah debt-funded startup? Or are these guys securing too much equity for their pitance of an investment?
Where on this site can we find the details of how this incubator is structured, or is public disclosure of this information too embarassing for the mentor group to have to endure?
The link to the “Apply Here” page is broken. People can apply at http://www.boomstartup.com/apply.
This is great news. You site also got me wondering…The Event Link from your website- How did you get to showcase the event on facebook without having the users to log into FB?
John, sign me up for this one!
me too
John Richards is kind of a joke here in Utah. This incubator is going to be a trainwreck.
Yep -its true. John Richards is a total toolbox – the butt of a lot of jokes in the Utah entrepreneur community. This thing is going to fail. Richards has no clue – has n idea what he is doing.
I’ve had the opportunity to take classes from John Richards and they were some of my favorite classes I ever had. He is a very smart and successful entrepreneur and I have learned an incredible amount from him. I owe him many thanks.
I wish John Richards the best in this new and exciting endeavor.
His class is called “Creating New Ventures.” Really, it should be called, “Harvesting Old Ventures” or “How to suck the entrepreneur life out of students.” Suck up somewhere else. He didn’t teach you as much as you think he did.
It’s true John Richards doesn’t have the best reputation. He does teach classes and mentor students. Maybe that is how he justifies taking advantage of them. I just wish he would take care of people in his start ups rather then treating them like they are nothing. Its a partnership. His philosophy is totally different then most angels or VC’s.
These investors-mentors have a history of being terrific contributors to entrepreneurship. The Omniture founders are fantastic examples of perseverance for all startups. All the best to BoomStartup!
Anyone know if they requiring a certain a amount of equity in exchange for their money and mentorship like LaunchBox Digital?
It would be great if every state had one of these programs!
I wish we have similar thing for Canadian startups. I have to admit the incubator is a wonderful place for innovations.
Being with a startup myself, it is so hard to get media coverage like startups have in the US.
Well I mean we have incubator but we need similar media coverage too
How about launching a start-up that specializes in giving media coverage to Canadian start-ups? TechCrunch Canada Edition? UStreamTV Canada startup web channel? Canada VentureBeat?
Canadian tech coverage is pretty much non-existent especially coming from Canada, let alone the US. In that area, Canada is about 5 – 10 years behind the US depending on where you are.
You have a great software. The best option is move to Silicon Valley and start getting to know people there. Your product will receive the lifeline it needs to be successful. The longer you stay in Canada, the higher chance for your product to be unknown and disappear.
The team behind BoomStartup are the real deal! Josh James, John Pestana, Warren Osborn, Nobu, Nathan Furr, Ralph Yarro, Martin Frey… This is a solid team of very smart and innovative guys. I wish them the best in this new endeavor.
Ralph Yarro is a monster. Val Kreidel death can be attributed to his greed. The man should be imprisoned.
Rob Penrose’s and Val’s deaths are attributed to the Greed of the Noorda children.
Ralph Yarro cannot even pay his own brother a living wage; the poor slave has to borrow money from his wife’s family to keep themselves fed.
Yet Ralph continues to rip off anyone who is of diminished capacity.
Is this someone you would want to go into biz with.
Last time I checked it was a free country (no more slavery). Tell them to go find a better paying job. Maybe you don’t have a clue orgy-porgy.
So Paul, are you saying you think this $15k for 15% equity deal is going to do anyone any good? I thought your partner’s $50k of debt deal was lousy, but this seems just lame. How much equity does vSpring usually take for a $1million dollar investment deal?
What is $15k going to do for an entrepreneur? Is it going to help them develop their software? Let’s see, if an average software engineer makes $90k annually, this $15 would provide 2 months worth of salary to work on his software development. Make that just over 1 month if you plan on paying taxes on that salary.
Here’s another way of looking at this. Josh James recently sold Omniture for 1.8 Billion. Not knowing his equity but assuming it to be a lowly 10%, that means he’s worth $180 Million. Now when he invests $15k in our company how much time, effort, and heart should we reasonably expect from him? How much skin has he got invested in our company? Lets see, $15k divided by $180million equals 0.000083, or multiply by 100 to get the % of his net worth and it’s roughly 0.008%. Wow, now there’s some perspective, huh?
So when we come to you and say “Josh James invested $15k in (bought 15% of) our company and gave us 15 minutes of consulting time”, we can expect vSpring to be very impressed, right?
BTW, why is Josh James tagging along with little $15k incubator partners instead of joining your VC group? It’s a lot like Bill Gates buying and running a McDonalds franchise. Are we supposed to take this seriously?
For those that knock John, just take a look at his track record. He’s had some big hits. Then look at the companies and funds that he’s backed. He obviously knows a good investment when he sees it. Combine that with the fact that he has mentored 100s of students on their businesses (including me) and you get someone who really knows his stuff but genuinely wants to help others. My guess is those that are being negative were turned down by John for funding. I think this will be a great resource.
What big hits? Aside from putting a little money in Omniture, I can’t think of a single big hit he’s had.
@Jeff – Please list his “big hits”. Heck, list *any* hits – they don’t even have to be big.
…crickets chirping…
Its true, John Richards doesn’t have the best reputation in the Utah entrepreneur community. He puts on the front that he cares about young entrepreneurs. However, he takes advantage of them for his own good.
I don’t like to see these board turning into an anonymous place where people slander these guys. However, it also seems to be the only place that you can truly say what’s on your mind without getting branded and ostracized from those who run the bulk of Utah’s startup funds.
I sat down with John Richards and gave him a history of my efforts with a startup, which included the fact that we had ran out of cash. John presented me with his consulting agreement, which include significant equity in my venture, a hefty consulting fee, and secured rights to participate in future investment funding at a low-ball rate.
Since I HAD NO CASH to pay his fee, as I told him from the beginning, I had to tell him that I couldn’t accept his offer. He did not take this well, and dropped all contact with me. So be it. My startup strategy did not include incurring a large debt, and subsequent lien, against my company for “consulting”.
The general problem with Utah investors is that they want way too much for what they’re giving in cash or time. This particular venture smacks of this as well. Remember the Junta groups where you got up to $50k in debt financing to get your startup running? Nice deal for the investor, but bad for the entrepreneurs involved.
If you want an honest and frank appraisal of the Utah venture community compared with standard venture deals, you need to attend a seminar featuring Josh Coates of Mosy Inc. In the mean time, you might want to stay clear of Utah’s infamous debt-for-equity startup financing. Taking money from the wrong people or in the wrong structure can ruin your business from the beginning.
This is going to be an amazing program. I am a huge believe in “mentor capital” and the idea of utilizing mentors to succeed as a young entrepreneur.
At http://launchsalesandmarketing.com check out our Company tab and see our advisors, these guys are fantastic mentors who have helped us get to where we are today
Brandt, there are plenty of prospective mentors out there for young entrepreneurs that won’t charge you for their time and efforts. See SCORE and also LDS employement centers.
I believe what young entrepreneurs really need are value-added investors. These are Angel investors that will take an active role in your venture, which may include joining your board or even management team. These are harder to find, especially in Utah.
BYU has a couple of business groups where you can find some of these active investors, but they are also laced with the same guys that are responsible for Utah’s opportunistic vulture capital deals. Proceed with caution.
This is a great opportunity with a team of solid mentors! Of coarse investors want a good return including mentors, wouldn’t you? Entrepreneurs just need to have several sources of mentorship, educate themselves and shop terms. I would hope boomstartup follows the Ycombinator model, but overall I believe the hardest part for most people is starting and then getting some good coaching. This will be a great resource for that.
I really want this to work. Josh James, John Pestana (aka Johnny P.), Warren Osborn, and Martin Frey are all money in the bank characters.
It is common knowledge that John R. is, in fact, a toolbox. Not sure how he gets lumped into this group. If he were just one of the contributors, I wouldn’t be so skeptical. But since he seems to be playing point on this project, I’m more than nervous.
I went to the informational session yesterday, and John said that “because of the market and cultural reasons” they were going to take 15% for $15k — about 2-2.5x what any other similar program take. John is at the heart of the “cultural reasons” the Utah investment community has a bad rep.
That said, it’s tough to raise money right now, so many entrepreneurs may have no other option.
Are you serious!? The John Richards crowd makes me so mad. I would never accept money from John Richards.
Why can’t we just have level headed angel/vc’s in Utah who want a good return for themselves without taking advantage of entrepreneurs. I take that back, we do have them, just not in the Utah Angels group (which John Richards is a part of).
There is better money out their to accept rather then John Richards money. They teach you to accept good money, right? Well, John Richards money is not good money!
You always have an option. Bottom line is that you are putting too much stink behind the dollars for percentage. The value isn’t the money! the value is getting mentored by the team of professionals this group has brought together. If you don’t value the mentors than you shouldn’t waste any more time on it. I look at it this way: the money and percentage is a way to get the busy mentors to participate. These guys have plenty on there plate, why would they do this unless they are incented to. I assume they have plenty of needy people wanting their time and money. Prove that you have the ability to go it alone and do it yourself.
Seriously, how involved is Josh James going to be? You may get an hour of his time. Is that worth 15%? If you are going for the mentoring, you are going for the wrong reason. There are plenty of older, successful entrepreneurs who are willing to help young, BYU student/entrepreneurs for free. It’s called giving back.
Thanks for the heads up on the structure of this incubator. I thought the $15k being offered would have some serious strings attached. So John Richards and his cohorts here are valuing every new startup technology at $100K. What a joke.
My partners and I sat down with Jeff Kearl a while back to discuss funding for our IT startup. Jeff said that he and his partner usually invested around $500-650K for a 25%+ equity stake. So the value that they placed on startups worth their investment $$ was roughly $2million.
John Richards needs to man-up or get out of the Utah angel community. Yes, times are tough for investors and entrepreneurs right now. However, a good opportunity is even more important for investors right now. They can’t afford to squander their funds on ventures of little real worth, but when a good venture comes around they need to back it with enough fund so that it can succeed. All they’re doing with this $15k for 15% deal is insuring that everybody loses… whimps!!
15% for US$15k ????? That has to be a typo. Go with DreamIT Ventures in Philadelphia or Boot Up Labs in Vancouver.
There is one in Austin, Texas called Capital Factory. They provide seed money for early stage tech startups. $20k cash and 20 entrepreneur mentors for 10 weeks over the summer. They are accepting apps now. http://www.capitalfactory.com
“And today, Utah is getting its very own startup incubator, BoomStartup, which …”
Ahem, not meaning to slight BoomStartup in any way but there are other incubators in Utah. Alan Hall and group has their eStations, the State of Utah’s USTAR has launched its “BiG” project (for bio-tech start-ups), Salt Lake Community College has its “Business Innovation Center”, Novell hosts an incubator for start-ups that can leverage its technology space, and UVU and Westminster College each are building incubators. And I am sure I missed many others.
While they may or may not put in cash, each does offer a range of incubation services including free or low rent office space and tele-comm services, access to mentors, training, consultations, and, at least for some, assistance connecting to potential investors and other funding sources. I know as I use to manage an incubator in Utah.
On another note, I would agree – somewhat – with the comment that the Mormons that grew up and still live in Utah are quite different from those that grew up or live in other states/countries. That said, they are not “bad people” or even wholely prejudiced – just a tight-knit community. As with doing business overseas and you are a foreigner, you just need to build their trust and gradually work your way into their network. Watch your use of profanity though, which is a nice and mature thing to do anyway.
And Utah itself is becoming more “open” and worldly, which should make it more attractive to more outside business groups doing business here. Recent changes to their drinking laws does away with the need to buy a “membership” to enter a bar, more bars opening, and more restaurants can now serve liquor and wine.
But compared to other cities I have lived in, Utah still has a ways to go before it reaches the level of sophistication in doing business and nurturing start-ups. Hence their continued problem with “brain-drain” once a start-up reaches a certain size. One notable exception is Omniture, which has not moved out-of-state following its recent buyout.
To this end the state is making efforts to attract more researchers and more experienced senior management to the state. But as with most things in life it will take time.