How our merger will help us build a world-class startup accelerator in Phoenix
This year has kicked off at full-speed for our team at Coplex. From a new suite at Galvanize surrounded by an infectious entrepreneurial energy to a wild Grand Opening event to announcing our merger with AZ Crown Ventures, we’ve been blown away by the support of the community and are excited to have it all happening here in Phoenix.
It was around this time last year that Stephen Viramontes introduced me to Tim Crown, as we were both asked to be panelists at Startup Week. I only knew of Tim through his success at Insight (which he and his brother Eric started). Insight was one of our few Arizona Fortune 500 companies in Phoenix, and anyone I knew that had worked there or with them had great things to say. When we met, his eagerness to get involved with the burgeoning tech/entrepreneurial scene was apparent. He is a passionate entrepreneur with a no BS attitude- something I appreciate in people.
So, why are we merging?
We made a pretty massive pivot to Coplex in 2016 when I purchased the company from the original founders. Although we had been building startups with non-coding founders for many years, it wasn’t in a structured accelerator program. In 2016, we decided to go all-in on the program-based model and forego the ‘project work’ that we used to do. This was an incredibly difficult thing to do as we incrementally walked away from almost $300k/mo in revenue from ‘project work’ to focus on a smaller (but growing) accelerator program. We underestimated the magnitude of the pivot, and let’s just say — shit got a little tough!
However, our ventures started seeing some nice early results. Our team was doing excellent work. One of our alumni ventures, Pluto TV, raised $30M. In 2016, we helped start Phoenix-based ventures such as ZipSit, Shepherd, Ruru, and Insurmi — all who successfully raised outside capital. We had a handful of seed-rounds and even a couple of exits with ventures that we helped get from idea to venture-ready. The program was getting better each cycle and we used our own ‘lean process’ to continue improving it based on the feedback we received. The revenue from our program work continued to increase and referrals kept coming in. We knew we were on to something.
The momentum continued. In 2017, Coplex worked with 87 startups and started 48 new ventures. 34 were in Phoenix. In 2017, we worked with ventures in 4 continents. Specifically, Asia (Dubai), North America (Guatemala), South America (Trinidad & Tobago), and Australia (Perth). In 2017, our startups raised over $15M in outside capital (Including participation from Samsung Ventures, 317 Ventures, Third Wave Digital, and even an investment group in Abu Dhabi, UAE). We were even ranked the #6 accelerator in America by entrepreneur magazine.
To provide a mechanism to invest in some of the ventures we were starting, we also launched Coplex Ventures in 2017, with our first $5M fund. Before investing, we decided to raise some additional equity into Coplex to ensure we had the proper capital necessary to complete our aggressive transition and fulfill on our program at a larger scale. As we continued the raise, we started our conversation with Tim.
Tim was interested in partnering with Coplex at a larger level and helping us solve our capital needs for the longer-haul. We pivoted from our original plan and decided to move forward with a far more aggressive growth plan in partnership with Tim and his brother Eric. We decided to merge with the Crown’s venture investment arm (AZ Crown Ventures), inject some fresh capital into the company, and bring Tim on as our Board Chairman.
Our core beliefs
There’s a reason the Pied Piper guys from the HBO series Silicon Valley are portrayed as nerdy, young, eccentric coders — that sort of person once defined tech culture. The stereotype became so ubiquitous that many people still believe you’re locked out of the tech industry unless you have the founding team trifecta: youth, coding experience, and residence in (or near) San Francisco.
While that may have once been true, “tech” is no longer an industry unto itself. Companies from every sector (and every state) are starting to resemble tech startups, and the door has opened for founders without technical backgrounds — and who aren’t from San Francisco — to get in on the action.
A recent study by the National Bureau of Economic Research found the average exit age of successful silicon valley startup founders was 47. According to the most recent data from PWC MoneyTree, we just hit a record ‘gap’ between VC dollars invested inside of SF vs outside with almost $6B more invested outside of the SF area than inside. Further, from an analysis of the largest 25 ‘unicorn’ tech companies in 2017, 64% were started by non-technical founders.
Investors are more open than ever to backing nontraditional founders who can navigate industry-specific challenges, and they’re looking outside of SF. Steve Case (the founder of AOL) just launched one of the largest seed-stage funds ever ($150M) with his Rise of the Rest fund which is focused on investing outside of SF.
Coplex is the first accelerator focused on enabling these non-coding, industry expert founders outside of SF to start new tech companies. Diversity is key in startups, and we’re focused on creating that.
Where is Phoenix going?
I’ve always been a die-hard startup guy (and a die-hard Phoenix guy), and beyond that I enjoy building communities around the startups. Those communities are integral to building up successful founders and startups. My vision for Coplex stemmed from two of my most valued passions: The influence of the ecosystems in my hometown, Columbus, and my current home in Phoenix that played instrumental roles in my own growth and the growth of Coplex, and my knack for helping non-coders get into the tech game. Coplex is at the intersection of these two things and I’m incredibly passionate about building this new breed of founder and elevating the startup communities around them.
We really do have the world’s most generous community for entrepreneurs here in Phoenix. I won’t even get into how easy of a place it is to live, because you all know that, already. Instead, I want to talk about our community. You all have been incredible in supporting me personally (even through some tough times, you know who you are) and supporting Coplex. You have no idea how humbling of an experience it is to see 250+ people show up to our grand opening party. You guys are the best.
I really do believe that Phoenix is rising (pun intended) as one of the real players in the startup/tech world. We’ve got a lot of work to do, but it’s time for us to build something big — together.