#StartupsEverywhere Profile: Jerad Stack, Co-Founder Breakthrough307 Angel Fund and Director, Wyoming Technology Business Center-Casper
This profile is part of #StartupsEverywhere, an ongoing series highlighting startup leaders in ecosystems across the country. This interview has been edited for length, content, and clarity.
Creating Opportunities for Startups Across Wyoming
Wyoming is known for its vast expanses of largely untouched natural splendor in the Mountain West, but the Cowboy State is also home to a growing entrepreneurial community focused on harnessing the state’s unique attributes and building companies in a host of emerging technologies. When it comes to startups and small businesses across Wyoming, Jerad Stack wears a lot of hats--as an angel investor, startup founder, and ecosystem builder. As a member of the state’s ENDOW Executive Council, Jerad also has unique insights into efforts to attract and grow business opportunities across the state.
Can you tell us a little about yourself? What is your background?
I’m the Casper-area director of the Wyoming Technology Business Center, which is affiliated with the University of Wyoming and is our incubation and acceleration program in the city. Casper is the business and industrial capital of Wyoming - located in the “middle of the square.”
I also am the co-founder of an angel fund called Breakthrough307. Our area code--and we only have one in Wyoming--is 307, so that’s where that comes from. We’re really focused on getting early stage capital into Wyoming businesses and startups, and we also work with some of the other angel funds around the Rocky Mountain West.
And I also serve on the governor’s ENDOW Executive Council, which is an acronym for Economically Needed Diversity Options for Wyoming. A couple of years ago, our governor put together this council of business leaders from around the state to try to figure out, from a policy perspective and a public-private perspective, how and where we need to invest to potentially make some impacts in diversifying the state’s economy.
What is some of the work that ENDOW is doing to support startups and entrepreneurs across Wyoming?
One of the big things we’ve worked on at ENDOW, in concert with an organization called the Wyoming Business Council--which is the state’s economic development arm--is how do we start, grow, and scale startups in Wyoming.
There are roughly 600,000 people in Wyoming. So we’re, altogether, the size of a medium-sized city. To get any sort of economy of scale, we have to do everything together. We’ve got to treat Wyoming as one city with very long roads, so we need to try and get a lot of those interregional partnerships going on. Maybe there’s a startup in Casper and we can get some mentors from Jackson, or Cheyenne, or other parts of the state to try and put that network together so we’re all working on the same team.
About 18 months ago now, ENDOW was successful getting some funding from the state legislature for a program that the Business Council manages called Kickstart:Wyoming, which is an effort to really accelerate the entrepreneurial ecosystem. Kickstart:Wyoming is trying to help raising capital for companies, building a better environment around incubators, accelerators and innovation centers, and building an entrepreneurial networking community. We’re in the early days of the program, but we are already having some great success getting budding startups out of their garage and on the path towards growth.
What makes Wyoming’s startup ecosystem unique?
Wyoming is actually a really, really entrepreneurial state. People start businesses here at really high rates, which is great. However, few of them are what I’d call high-growth, technology enabled startups.
Wyoming’s top three industries are energy, tourism, and agriculture, in that order. So you can imagine that there are lots of startups and new companies around the supply chain of those industries. There’s also, especially in the regions of the state that have these traditional energy industries, a big risk taking culture--which is great. But there’s not a lot of focus on taking those kinds of assets that we have and redeploying them in kinds of 21st century startups that are tech enabled and have the potential to diversify the economy.
One of the really cool things about Wyoming, from a policy and a regulatory standpoint, is you can actually make positive changes here. A good example of this is that over last couple of years, we’ve made a really concerted effort around changing Wyoming’s laws and regulations around blockchain and cryptocurrencies. Universally, everyone seems to think Wyoming has some of the most blockchain and crypto-friendly laws.
Can you elaborate a bit on what Wyoming’s blockchain and crypto policy looks like?
A couple of years ago--and one of the first things we did on ENDOW--was we looked at some of the technology regulations that we had in Wyoming. Some of the exchanges like CoinBase didn’t like our banking regulations at the time, so they wouldn’t operate here. So we decided we had to fix this. Some players in the Blockchain world put together a coalition and the Governor spun up a Blockchain Taskforce and they made a big impact in a short amount of time. Now, Wyoming is viewed as being one of the most blockchain friendly places in the world.
There have been around a dozen different laws that have passed in the last two legislative sessions around really well-defining how this industry can function - defining what’s property and what’s a security, for example. So a lot of those token utilities are now defined as property in Wyoming, which gives them some regulatory certainty.
One of the really interesting ones that we passed last year is essentially a depository bank that will bank these crypto and blockchain companies. It’s kind of like the early days of legalized marijuana, where the banks were afraid to touch the money. And it’s sort of true for some of these crypto and blockchain companies that traditional banks don’t want to touch them. So we passed the law in Wyoming this last legislative session to allow for a special depository bank that these blockchain companies can come together and co-op and have their own banking center.
What other emerging tech is the state focused on?
We’ve got some really forward-looking autonomous vehicle laws, and we’ve been working on some other stuff around AI. So we’re trying to put together regulatory frameworks that some of these next-generation companies are really looking for, in the hopes that those companies will start locating here.
And it’s not just self-driving cars; we’re really interested in autonomous aircraft. One of the things we look at in Wyoming is, “What are our assets, and how can make those play to our state?” And one of those is that we’re rural and we’ve got a lot of space.
There are chunks of the state that are so rural that there’s basically unused airspace. Autonomous aircraft companies need places to test like that. So we’re trying to put frameworks around that and think about bringing in more companies like that as well.
Are there any policies at the federal, state, or local level that have helped Wyoming startups?
Thate state does a good job from a regulatory perspective, but there are some things I think we can be better at. We need to focus on putting some of those non-capital and non-regulatory pieces of the ecosystem together. We need to have much better facilities and infrastructure for startups, which means more incubators, accelerators, and co-working spaces. We also need a much more coordinated mentoring network to be able to really do it.
No matter how you measure it, access to capital is really a struggle for startups here. We’re ranking in the bottom five among states. So that’s something we’re really working on.
We’ve also got to do something about health care. I talk to a lot of entrepreneurs, and one of the reasons they don’t quit their day jobs, is because of access to health care. We need to have some flexibility around the ability to maybe have one insurance pool for all the companies in my incubator, for example. Things like that would be helpful and would make sure entrepreneurs aren’t just buying one-off policies from the exchange.
One interesting federal effort to me is the Opportunity Zones program. We happen to have a handful of those in Wyoming, and a couple of them are pretty strategically located for tech innovation companies. One of the benefits is all of the gains in Opportunity Zones investments are Capital Gains tax-free.
Can you tell us a bit more about Wyoming’s Opportunity Zones?
My incubator in Casper is actually located in one zone. Almost all of Laramie, which is where the University of Wyoming is located, is also in one. I think if we can put some infrastructure in place and get a little bit of funding going, it can uniquely impact Wyoming.
Unfortunately, if you look across the country, a lot of other areas are also Opportunity Zones. Half of Brooklyn is an Opportunity Zone. So there are some places that, if you were going to start a new startup or have a venture fund that’s going to focus on opportunity zones, you’re probably not going to be spending all your time looking at Wyoming, and we need to be a part of that conversation.
In terms of legal services around Opportunity Zones, I think there might be one or two lawyers in-state keeping up with them. With this last set of clarifications to the program, I think angel funds like mine are going to make their first Opportunity Zone investments, and that’s going to force more lawyers to figure it out.
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