This article first appeared in the Journal of Business on April 21, 20211. by Virginia Thomas

While funding opportunities have slowed in the wake of the COVID-19 pandemic, Spokane’s startup community remains active, bolstered by employees located throughout the U.S. and events that bring attention to new companies, some market observers here say.

According to information from proprietary market data software subscription platform PitchBook, more than $51.6 million went to startups in the Spokane area in 2021. That’s less than half the $107.6 million in funding startups here received in 2020.

Of those funds committed in 2021, nearly half—$25.3 million—was venture funding.

Steve Rector, chief investment officer at Spokane-based Cowles Ventures LLC, says that while there’s no shortage of startups to fund, cash flow to investments has slowed as investors have been more hesitant to part with their money while the pandemic persisted through a second year.

“People are preserving cash in some of the uncertainty,” Rector says. “I was a little more protective during the last 18 to 24 months, just until we got a better handle on where things were going.”

Cowles Ventures is the venture-capital arm of Cowles Co., which owns the Journal of Business through its subsidiary, Northwest Business Press Inc.

Tom Simpson, managing member of angel fund Kick-Start, president of the Spokane Angel Alliance, and president and CEO of Ignite Northwest, says that data from Pitchbook should be taken with a grain of salt.

“PitchBook data is not complete because you don’t have everything disclosed,” Simpson says. “I would be careful about drawing a meaningful conclusion and saying the Spokane region suddenly is less interesting because of a decline.”

According to PitchBook data, startups that received the greatest amount of funds in 2021 include:

•Coeur d’Alene-based additive manufacturer Continuous Composites Inc., which received $18 million in venture funding in June.

•Coeur d’Alene-based cyber security company Gravwell Inc., which raised about $7 million total from two seed funding rounds in 2021.

•Spokane Valley-based real estate startup Doorsey Inc., which raised $4.1 million in seed funding in November.

Simpson says it’s important to note the number of new startups receiving investments versus the number of follow-on investments.

In 2021, four new startups – Vega Cloud Inc., Doorsey Inc., Treasury4 Inc., and Ruumr Inc. – received funding. No new startups received funding in 2020, according to PitchBook data.

Rector says Cowles Ventures invested in two new companies in 2021—Spokane-based fintech software startup Treasury4 Inc. and Vega Cloud, which is a Liberty Lake-based software maker.

So far in 2022, investors have infused more than $7.7 million into local startups, according to PitchBook. Most of that came from a $7 million venture funding round to Spokane-based spice maker Spiceology Inc. from San Francisco-based venture capital firm Jackson Square Ventures and other undisclosed investors.

Rector says investments in Spokane-area startups are likely to recover somewhat in 2022.

“Overall, in the markets and the venture space, we’ll probably see some upticks in ’22, just because we are getting out of some of the uncertainties that were clouding us in 2020 and 2021,” Rector says.

Simpson says future successful companies could be born from local startup events, which also maintain the momentum of the community.

Sparks Weekend, to be hosted this year by Ignite and LimeLyte Technology Group Inc. from April 29 to May 1 at the Catalyst Building, at 601 E. Riverside, provides new startups with resources to launch, Simpson says.

“It’s a three-day event where people with ideas for brand-new businesses present their ideas on Friday evening,” Simpson says.

About 40 presenters will be winnowed down to 10 finalists, who will be paired with mentors to work on creating a minimum viable product, conducting market research, and refining their busines model. On Sunday, competitors will present their final plans to a panel of judges. One winner will receive $50,000 in investment capital.

“That’s something that’s been very fruitful in the ecosystem here in Spokane,” Simpson says. “For example, Spiceology was the winner of a predecessor to Sparks Weekend, which was called Startup Spokane. Kaspien, several years ago, was the product of the same business plan competition.”

Spokane Valley-based e-commerce company Kaspien Holdings Inc. is an example of a company that has benefitted from some effects of the COVID-19 pandemic, Simpson says. It has increased employee numbers by hiring people to work remotely. Other startups in the Spokane area also are likely to grow this way, Simpson says.

“The broader acceptance of remote work has really helped Spokane,” Simpson says. “In the past, sometimes Spokane was at a disadvantage for recruiting. Now, we can recruit people to work for emerging Spokane companies, though the workers may live elsewhere. It’s benefitting the entrepreneurial ecosystem in Spokane in two ways—more talent coming in, and the ability to attract a broader base of talent, though the workers might not live in Spokane.”

Ryan Arnold, director of regional entrepreneurial strategy at North Idaho College and co-manager of the Northwest Entrepreneur Competition, says entrepreneurial events are a good way for startups to find funding and other resources.

At the Northwest Entrepreneur Competition, hosted virtually on April 13 by North Idaho College and Spokane’s University District, more than 50 student teams competed for a total of about $44,000 in awards.

In addition to funding and feedback from judges, such events provide networking opportunities. Arnold says many entrepreneurs have a small network or none at all.

“Events like these oftentimes are a sort of clearinghouse for that, where they’re not only competing, but they’re meeting new people, they’re meeting their own peers that are going through the same issues, and they’re building their own entrepreneurial network,” Arnold says.

The Northwest Entrepreneur Competition has been hosted by North Idaho College annually for about 15 years, Arnold says. In that time, the entrepreneurial ecosystem here has flourished, he says.

“What we’ve found over time is that Spokane as a region has gotten more complex as far as the ecosystem goes,” he says. “We’re doing a good job of cooperating across state lines. The ecosystem is starting to work together a lot better, more cooperatively.”

Even before the Northwest Entrepreneur Competition came along, the startup community here was connecting higher education institutions with startup investment opportunities.

“You see this in the building growth of Spokane’s University District, for instance—the physical form of these spaces and places next to the downtown core,” Arnold says. “We were trying to attract talent and resources. But now, that talent and resource is here. Those buildings and spaces are here. With that comes the opportunity to just keep building and growing.”

Arnold says startups in the health sciences, aerospace, and advanced manufacturing sectors in particular have seen significant growth here.

Rector says Spokane startups have been receiving more attention from investors based outside of the Inland Northwest.

“We’re attracting some good, strong attention nationally with some of the companies that were started here,” Rector says. “I’ve got a couple of different venture groups in the Bay Area and a couple in the Seattle area that are much more inquisitive as to what we’re doing over here.”

This is a press release from Greater Spokane Inc., released on

(SPOKANE, Wash.) – The Washington State Department of Commerce has awarded a $500,000 Innovation Cluster Accelerator grant to Evergreen Bioscience Innovation (Evergreen Bio) to build a bioscience innovation cluster in the Spokane region. The successful team is led by Greater Spokane Inc. in partnership with SP3NW. Washington’s Innovation Cluster Accelerator is one portion of work supported by a $15 million CARES Act Investment by the U.S. Department of Commerce Economic Development Administration.

The grant dollars will grow an industry-led business development organization and drive initiatives to build a world-class health and life science contract service industry in the region. Evergreen Bio’s mission is to make the Mountain Northwest and Washington State a magnet for companies providing and consuming expert life and health science contract research, development, and manufacturing services. They will do this by promoting industry “co-opetition,” prioritizing projects to address industry needs, and acquiring, developing, and retaining top talent.

Multiple organizations and key champions have been instrumental in the success of this award, including SP3NW, Katrina Rogers Consulting, Health Sciences and Services Authority of Spokane County, Clear Solutions Biomedical, VectorPoint Ventures, Johnston Engineering, and Alturas Analytics/Needham Scientific.

“This is a very exciting opportunity that is building on a lot of the community’s great work. Evergreen Bio is what comes next from VISION 2030, the Elson S. Floyd College of Medicine, SP3NW, and new investments from Jubilant HollisterStier and Selkirk Pharma. Contract services across the region has been identified as a gap and Evergreen Bio can lead the economic advantage of local supply chain sourcing for pharmaceutical and medical device contract services companies. We will have the opportunity to catapult our community into one of the leaders in life science services,” said Stacia Rasmussen, Health & Life Science Business Development Manager of Greater Spokane Inc.

Evergreen Bio is focusing on five key initiatives to promote bioscience innovation including a Thriving Industry, Total Mountain Northwest Supply Chain, Global Entrepreneurship Hub, 21st Century Talent, and a World-Class Cluster.  Evergreen Bio will be the home for synergistic regional initiatives across these focus areas.

“Growing life sciences in Spokane requires a strong entrepreneurial community supported by financial opportunities. SP3NW is proud to be a part of the team bringing Evergreen Bio into existence. We already have strong interest from the private sector, entrepreneurs, finance, government, and education from current work with parallel aims of the FIRE grant programs. The grant will give us the ability to grow on this success,” said Michaele Armstrong, Associate Director of SP3NW.

About the Evergreen Bioscience Innovation

Evergreen Bioscience Innovation (Evergreen Bio) is a corporate industry-led, member-based organization that includes partners from the five economic segments of government, capital, academics, entrepreneur, and corporate.  The mission of Evergreen Bio is to make the Mountain Northwest and Washington State a magnet for companies providing and consuming expert life and health science contract research, contract development, and contract manufacturing services of medicines and medical devices, by enhancing workforce development and services to pharmaceutical and medical device companies. Evergreen Bio’s purpose is to develop and promote collaborative relationships facilitating regional business growth by prioritizing and assisting in funding projects that increase our collective value as an integrated biosciences supply chain, which will expand name recognition and awareness of contract services provided within our region.

About Greater Spokane Inc.

Greater Spokane Inc. (GSI) is the Spokane region’s business development organization. GSI creates the place where organizations come together to advocate for the region, drive strategic economic growth, and champion a talented workforce. GSI is funded through a combination of private and public investment, including over 800 private-sector members; Spokane County; Washington State Department of Commerce; and the cities of Spokane, Spokane Valley, Cheney, Deer Park, Liberty Lake, Airway Heights, Medical Lake, Millwood, Newport, and the Kalispel Tribe of Indians. For more information visit GreaterSpokane.org.

About SP3NW and the FIRE grant programs

SP3NW is an early-stage, life sciences incubator located in the University District of Spokane. In alignment with the land grant mission of WSU, SP3NW supports the bench-to-business and business-to-consumer paradigm. Through the four programs of our EDA-supported Flexible Infrastructure for Resilient Entrepreneurship (FIRE), we help to grow companies with innovative new products across Washington, Idaho, and Montana. For more information visit sp3nw.org.

The Idaho Manufacturing Alliance (IMA) has released their 2021 Manufacturing Economic Impact Report for the State of Idaho.

This is a report of the economic footprint of Idaho’s manufacturing sector for the year 2020. The sponsor is the Idaho Manufacturing Alliance and authored by the Vandal Impact Center. The student authors are Jacob Spence, Christopher Giddings, Josh Gehring, and Keegan Opdahl. The faculty advisor is Steven Peterson, who has conducted over 150 studies on nearly every Idaho industry in his career1. The study was completed in November 2021.

IMA partners with the University of Idaho and Alturas to fulfill a long-time organizational goal of formally highlighting how important manufacturing is to the Idaho economy. IMA’s three main activities are to connect, support and promote manufacturing.

Download full report here.

March 9, 2022 (FAIRFIELD, Wash.)—Inland Northwest Partners (INP) is accepting registrations for their 2022 Spring Webinar. Philadelphia author and urban planner, Jeff Siegler, will be sharing a new approach to help restore people’s relationship to their town and foster a sense of pride in their communities. The webinar, “Civic Apathy and Civic Pride”, is Wednesday, March 23 from 9:00 am-11:00 am. Cost is $20 for INP members and $30 for non-members. Register at www.inwp.org.

 

“Regardless of a town or city’s size, residents’ apathy can be a challenge. Too often, it is the same people who show up and address their community’s needs”, says INP Executive Director, KayDee Gilkey. “This webinar will provide small, simple steps that can be taken by communities to increase civic pride.”

 

Jeff Siegler grew up in a struggling rustbelt city and understands the devastating cost of civic apathy. After obtaining his Masters in Urban Planning from Virginia Commonwealth University, Siegler went to work on Main Street, first as a downtown manager and Business Improvement District director, and later as the Ohio Main Street State Coordinator.

 

Now a consultant, Siegler travels nationally and internationally to assist communities in their efforts to restore civic health. He places the focus on making our towns into places residents can be proud to call home rather than on economic development and tourism. Siegler founded the civic pride consulting firm, Revitalize, or Die and is a co-founding partner of Proud Places. He is currently in the process of writing his first book, titled Your City is Sick.

 

INP members meet quarterly to share common economic challenges and solutions within the eastern Washington and northern Idaho region. Topics can include technology, financing community initiatives, forging regional partnerships, civic capacity-building, business expansion and retention strategies, and talent attraction. INP often partners with local chambers or state organizations for value-added training.

For more information about INP meetings or becoming a member, visit inwp.org or email [email protected]

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Inland Northwest Partners (INP) is a non-profit organization focused on enhancing the long-term vitality of a two-state region through its core offering of educational meetings, programs, and seminars. More than 300 business and community leaders from eastern Washington and northern Idaho are members. INP is also part of a regional collaborative known as the Inland Northwest Economic Alliance (INEA), a consortium of fourteen economic development agencies. To learn more, visit inwp.org.

 

February 11, 2022 (FAIRFIELD, Wash.)—Inland Northwest Partners (INP) is pleased to announce that a new executive director has been appointed. KayDee Gilkey comes to INP with more than 30 years of service to nonprofit boards on a local, regional, and state level, and is former two-term mayor of the Town of Fairfield, Washington. Gilkey is the economic development organization’s second director and assumed her position earlier this month. She succeeds Sharon Matthews, who held the position for 25 years. Matthews retired at the end of 2021.

Gilkey will concurrently remain as Directory of Industry Relations for the Washington State Beef Commission. She currently serves on the Liberty Community Education Foundation Board of Directors and serves as chapter advisor to WSU’s Alpha-Gamma-Delta chapter.

“We are so pleased to have KayDee joining us at the INP. Her expertise in non-profit leadership coupled with her passion for economic and community vitality is the perfect combination to help our organization succeed and support our mission, notes INP Board Chairman and Avista Regional Business Manager Paul Kimmell.

Inland Northwest Partners originated in 1986 as an in-house Avista economic development program and became an official non-profit corporation in 1996. In 2004, the organization developed the Inland Northwest Economic Alliance to better support community and economic development professionals from across the Inland Northwest. INP members meet quarterly to share common economic challenges and solutions within the eastern Washington and northern Idaho region. Topics include technology, financing community initiatives, forging regional partnerships, civic capacity-building, business expansion and retention strategies, and talent attraction. INP often partners with local chambers or state organizations for value-added training.

“Sharon was the consummate professional leading both organizations effectively for so long. Our Board and the entire region deeply appreciate her efforts and the positive economic impacts she helped foster here,” Kimmell said.

For more information about INP meetings or becoming a member, visit inwp.org or email [email protected]

Inland Northwest Partners (INP) is a non-profit organization focused on enhancing the long-term vitality of a two-state region through its core offering of educational meetings, programs and seminars.  More than 300 business and community leaders from eastern Washington and northern Idaho are members. INP is also part of a regional collaborative known as the Inland Northwest Economic Alliance (INEA), a consortium of fourteen economic development agencies. To learn more, visit inwp.org.

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