Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with George Spencer was recorded in January 2019.
Sumner Douglas is Managing Director and Venture Partner at BoomStartup, a Utah-based accelerator that offers pre-seed funding.
Sramana Mitra: Tell us what you’ve been up to. Tell us a bit about yourself as well about BoomStartup.
Sumner Douglas: I’m the Managing Director and Venture Partner. I run most of the startups. BoomStartup has been around since 2010. We’ve run about 14 different cohorts throughout that period of time. I think we’re one of the first 15 accelerators in the domestic US. I’ve been around the venture and investment field for quite some time.
I tend to go back and forth between starting my own tech companies and investing in tech companies. I’ve actually started or co-founded four of my own companies throughout my career. Now I’m focused on finding and selecting some really great companies out there and mentoring those companies and helping them raise capital.
Sramana Mitra: We’re interested in primarily the seed capital series. We’re primarily interested in your listed investment activities. So tell us a bit about the fund size, the check sizes, and the types of investment that you like to make from BoomStartup.
Sumner Douglas: We get somewhere between 2,000 and 3,000 applications on an annual basis. We typically invest around 20 companies per year. As for our capital deployment, we typically deploy $20,000 checks in capital and then follow-on capital to those investments that we make. I’d say at least half or more of those companies receive additional capital on top of that.
Our first deployment is $20,000 and our second deployment is between $50,000 to $100,000 in capital to those companies. All of that is seed stage investment. We work with two different components. We have our own accelerator that has been up and live for about eight or nine years now.
We also run PCIQ which is this state-run accelerator in Salt Lake City as well. We run another 40 companies there too. That’s pretty much the structure. As for the actual internal structure of what we do, we typically bring companies in. We work on rolling functionality because there’s a very good deal flow all year round. If you’re just doing the traditional cohort model, you actually miss out on a lot of really good deal flow. So if we find a company that we like, we sign it.
Then from there, we design custom accelerator plans for each one of those companies. I find that a lot of the traditional accelerators out there have been using this one size fits all model and that’s not what we do. We come in and go through a discovery process and a due diligence process. We assess what we think they need and they also tell us what they think they need. We design a custom accelerator plan for each one of those different companies and then work with the logistics of that.
We typically deliver the core curriculum at around six months and sometimes faster. It just depends on the speed of the entrepreneur. Then we offer another six months of mentorship. Our actual accelerator runs for a full year, but we’re working on a lot of the seed stage out there. We find that three months isn’t always long enough for you to finish off your MVP, go acquire some customers, and raise capital. So for those companies that need a little bit longer to finish some of those different cycles and processes, we offer extended mentoring period so that we can just keep those guys up and where they need to be to go out there and raise their first real round of capital.