Earlier this year, CNBC ranked Utah the #1 state for business, citing its “sweet economy and industrious workforce.” In a commentary about the commendation, Utah Governor Gary Hubert explained that “one shining example” of entrepreneurship in his state “is the rapid growth of Utah’s tech industry – the rise of Silicon Slopes.”
There is no shortage of locales with a Silicon moniker, but the Beehive state seems truly deserving of it. It is home to at least six “unicorns:” start-up private companies valued at over $1 billion, an impressive number considering there are just over 100 with that status in the entire country. Josh James, the founder and CEO of American Fork-based Domo, explains that “Silicon Slopes is a ‘unicorn in a box’. We’ve got a great ecosystem of executives, financiers, and venture capital that comes here from Silicon Valley combined with the (local) entrepreneurial spirit and experience that has been building here, and a great business environment. There is this ‘spontaneous combustion’ that takes place.”
This perfect storm starts with Utah’s university community. Five universities in northern Utah are churning out around 22,000 graduates a year. Did you know that the University of Utah was ranked as the #1 start-up launcher for two years in a row, beating out even the Massachusetts Institute of Technology? As Aaron Skonnard, CEO of Utah unicorn Pluralsight explains, “the level of depth we have in terms of tech savviness is higher than it should be in Utah. I think that this is a result of the good universities we have here (…) that have developed good programs around software, IT, and tech over the last several decades.”
The state government’s involvement has also been crucial to establishing Utah as a hotbed for entrepreneurship. As Westminster College professor Hal Snarr explains, companies there are getting high valuations thanks to a business-friendly climate that includes fair litigation, low regulation, and “fair, consistent taxation”. There are also many initiatives to foster new entrants, such as an announcement earlier this year from the Utah Governor’s Office of Economic Development that it would make $2.5 million available in grants to 25 start-ups in different industries as part of its Technology Commercialization and Innovation Program.
All of this has piqued the interest of venture capitalists from across the country. 2015 was a banner year for the state – its start-ups raised a combined annual record $1 billion in VC funding. For perspective, this number was just over $300 million in 2013. As Sam Stoddard, CEO of Utah near-unicorn SimpleCitizen explains, “the average deal size [in Silicon Slopes] beats Silicon Valley and San Francisco”. Per capita, Utah raises more VC funding than New York City.
For many successful start-ups, going public is an imminent next step. Accessing capital markets will be crucial as they seek the resources to grow and expand. “There’s probably a dozen companies [in Utah] that could go public in the next 24 months,” according to Dave Elkington, founder and CEO of Provo-based InsideSales. His company is one of them, as are Josh James’ Domo, valued at $2 billion, and fellow unicorn Qualtrics, of which its CEO Ryan Smith says, “the signs are all there. We’re already acting like a public company anyway.”