After two years of pandemic, economic downturn and continued recovery, more and more entrepreneurs, investors and state officials are taking a measured bet on Las Vegas. With a downtown designated “Innovation District” and new funding for startup incubators, the valley has become attractive to some entrepreneurs looking for an environment to grow their business.
At a Dec. 1 startup “showcase” downtown, five Las Vegas-based founders presented specific proposals to a room of guests. The event was the culmination of a 12-week accelerator operated by national company Gener8tor for the Governor’s Office of Economic Development.
“It’s an emerging scene, for sure,” says Kegan McMullan, general manager of the Gener8tor Las Vegas program. “We were very lucky at the end of the pandemic and the quarantine… [with] the mass exodus from California and [with] Nevada being very close and having a favorable tax climate. [Those] are great reasons to start a business in Vegas.
Along with the mayors of Las Vegas and Reno, Governor Steve Sisolak announced in March that the “inaugural” Gener8tor accelerator program would support and provide capital investments of $100,000 for five startups in the two cities. The investments come from Gener8tor’s venture capital fund and the State Small Business Credit Initiative (SSBCI), a federal program that received a $10 billion injection from the American Rescue Plan Act last year.
One of the participating startups moved from Colorado Springs to participate in the program. Founder and CEO Justin Knapp says he thinks he’ll be able to maintain and expand his business in Las Vegas, which is “ripe for startups.”
“I’m moving my headquarters to Las Vegas, so I believe in the ecosystem,” he says.
His company, SpaceTogether, provides an online platform similar to Airbnb, but for commercial space. Anyone with underutilized commercial space — a church, school, gym, or commercial kitchen, for example — can use the platform to list and rent it out. Typical tenants include nonprofits, independents, and newly formed churches or clubs and other startups.
Knapp says founding his company in 2017 was “driven by his personal experience” of needing space for a nonprofit and, with few options in a boiling real estate market, stuck in an expensive lease. of five years. He listed the commercial space in an online classified ad for people to rent, and, he says, it didn’t take long for dozens of responses to start pouring in.
The following year, SpaceTogether hired its first two employees. “We now have properties listed in 30 states,” Knapp says.
Las Vegas Mayor Carolyn Goodman has been pushing to make the city a top destination for innovative and tech companies, and for investors to find them. In response to the state’s launch of Gener8tor accelerators earlier in the year, she said the program would “continue” the work Vegas had already begun and highlighted workspaces the city opened in 2019, which support companies like Dragone and SafeArbor.
“Las Vegas is home to over 1,200 startups and they are critical to the present and future of our city’s economy…The city has been a leader in creating a top-tier startup ecosystem of the country through our @Vegas International Innovation Centers,” Goodman said in a statement along with the governor’s announcement of the Gener8tor programs.
The city also awarded a $1 million grant to nonprofit business accelerator and incubator StartUpNV to support its AngelNV program, which finds a group of investors and creates a $200,000 fund for a startup. selected. The program also offers mentoring at innovation hubs around the city on how to invest successfully, as well as free training for the selected startup.
McMullan says he believes startups “have the power to transform the landscape.”
“Look at Zappos. At one point it was a startup. Tony Hsieh created this platform just to see if people would buy shoes online,” says McMullan. “Years ago, it was actually kind of a thing that you weren’t doing – you wanted to go try them. It was Hsieh and his co-founders… And look now, they’ve made a huge footprint with the jobs that they brought to southern Nevada. And being acquired by Amazon was a fantastic piece.
When it comes to seed funding, Nevada is just getting started. Treasurer Zach Conine announced in August that SSBCI money will also be used to match capital investments made by StartUpNV’s venture capital funds, to support 40 Nevada-based startups in pre-seed (less than 500,000 $ in revenue) and in the seed phase ($500,000 to $2 million in revenue) over three years.
It’s part of a push to diversify the state’s hospitality economy, which has plummeted during the pandemic with one of the highest unemployment rates in the country.
“We recognize that startups create more jobs per 1,000 people here in Nevada, than in any other state in the country…The availability of this capital will allow new and innovative ideas to not only start here, but continue to grow.” grow here,” Conine said. in remarks at a press conference Aug. 31 at the International Innovation Centers @Vegas. “This vital startup support from the Accelerator Program will result in more viable and stronger Nevada-based startups, while also working to generate good paying jobs for our residents.”
In September, the Nevada Legislature approved an initial $35 million in SSBCI funds to be used over three years. Nevada could receive up to $105 million over the life of the federal program, according to the governor.
All components of SSBCI-funded acceleration programs are expected to launch by January 2023.
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