RENO, Nev. (News 4 & Fox 11) — Reno's tax-friendly climate, close proximity to Silicon Valley and growing infrastructure has transformed the Biggest Little City into a tech startup hot bed.
Not all startups are successful though, as lack of capital can doom new companies. Other reasons for failure include pricing issues, no market need, and the wrong team. 75 percent of venture-based startups fail, according to a study by Harvard Business school.
According to Battle Born Venture, a state-based venture capital program, there are typically three sequential ways to fund a successful startup.
- Friends and family funding
- Angel investors
- Venture capital (Mainly used to scale a company)
- Funding from venture capital programs can be difficult though. Karsten Heist, the technology commercialization director of Battle Born Venture (part of GOED), says hundreds of applicants get turned down for funding.
"Is it a team that knows what they're doing? An early stage high growth level to an exit, have they had successful exits?" says Heist.
Battle Born looks at three categories before investing:
Traction (how well the market has responded to the product)
Heist says team is the most important aspect.
"Have they gone through an accelerator program?" says Heist. An accelerator is a tool used to microwave the business development process.
One company using the tool is Reno-based startup Talage, a digital insurance marketplace that simplifies the buying process for small businesses. The accelerator program gives access to seed funding and marketplace research. Because of this Talage was able to receive funding from Battle Born Venture.
"You need to find the investors that not only believe in what you're doing, but also have the resources that can help you grow," says co-founder Matt Donovan.
Now the company looks to scale: hiring more employees, increased marketing, increasing presence and growing revenue.