Pictured left to right- Eric Madison, Mark Hutchinson, Jeff Saling.

Summer Reflections and Opportunities for Nevada Startups and Investors

6 summers ago, StartUpNV made its “public debut” on August 18, 2017 at the Nevada Governor’s Conference on Business where we watched and cheered as our first 5 member companies pitched – and saw friend and then member Adam Keifer of Talage win a $2,500 check from Governor Sandoval. We were ecstatic, giddy – and “on our way”.  On August 19, 2017, less than 36 hours later, my co-founder, Eric Madison, was killed by a wrong-way drunk driver on I-580 near the GSR in Reno. The question at the time was would that drunk driver also kill StartUpNV?

Each year around this tragic anniversary, I reflect on our original dreams and plans – and what the StartUpNV team has accomplished. For the next 2+ years, while grieving, we ran on $2,600 in private donations plus a Las Vegas based coworking desk donated by Switch. We eventually won a three-year federal grant for $300,000. Since that first grant in 2019, our non-profit has been awarded more than $4 million in additional grant funding, plus donated space from the City of Las Vegas and UNR.  All of the grant funding is in service of multiple Nevada startup ecosystem programs that run through 2025.  The grants support more than 2000 startups and their founders – with a focus on underserved communities. Since 2021, four venture funds, adjacent to StartUpNV, have formed – investing more than $5 million of private money (from 167 investors) in StartUpNV member companies. That’s a lot, but there’s more. 

From the start, StartUpNV has been about creating and growing a vibrant, inclusive startup ecosystem and giving back. Our executives and board members receive no compensation. All companies in our accelerator program donate 1% of their equity – and the adjacent venture funds donate 100% of their profits to the StartUpNV non-profit. So over the long term, when our member companies become successful and have exits, StartUpNV becomes self-sustaining.

In 2021 and 2023 we worked with visionary elected officials to pass legislation important to our startup ecosystem. The most recent win is the “Nevada Certified Investor” (AB-75), a first in the nation law which may become the most significant development yet for Nevada’s startup ecosystem – and diversification of the Nevada economy.  Wait!  What? How’s that?

Under current federal regulations only “Accredited Investors” are permitted to invest in startup companies.  Accredited investors must earn more than $200k per year in salary and/or have greater than $1M in net worth (excluding home equity). About 4% of Nevadans meet the federal standard – compared to 13% nationally and over 16% in California. As a result, it is significantly more difficult for Nevada startups to raise capital from local investors. It’s also significantly less likely for Nevadans to grow personal wealth from startup investments – being “forbidden” to invest in this risky, but lucrative investment cohort.

The Nevada Certified Investor (NCI) changes the standard for intrastate investing. NCI allows investment in Nevada startups by Nevadans who earn more than $100K per year in wages. If you own a business or do gig work, the standard is $200K in gross sales. The NCI standard enables about 30% of Nevadans to be eligible as startup investors. At the same time, it greatly expands the group of possible investors for Nevada startups.

FundNV announced it will form and raise its next fund under the NCI standard. FundNV have also lowered the fund minimum investment for NCI’s to $5,000, making it easier to participate in their “mutual fund of Nevada startups”. We hope other Nevada based groups will follow FundNV’s example and do similar investment work  – chambers of commerce, economic development agencies, alumni associations, groups with a focus on specific types of underserved founders – female founders, black founders, hispanic founders, veteran founders,  etc.

Nevada has lagged in having venture capital available for our early stage companies – because our economy hasn’t generated enough federally accredited investors.  We can now excel – thanks to a standard that makes sense for our economy. NCI is a game changer for early stage startup funding and wealth creation for Nevada investors. Nevada is the first to create an intrastate startup investing standard. Other states are watching us and, I believe, Eric is too… and he’s smiling.

I am grateful for the vision of Assembly Speaker Steve Yeager for introducing AB-75, to Secretary of State Cisco Aguilar for supporting that vision, to Governor Lombardo for signing the bill – and to the overwhelming majority in our legislature who voted for it.      

Want to know more about NCI?  Reach out to me on email at jeff@startupnv.org or message me on LinkedIn.  

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