#StartupsEverywhere Profile: Matt Paulson, Founder, Startup Sioux Falls
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.
Uniting the Sioux Falls ecosystem
Sioux Falls is a Midwestern city that demonstrates beautiful integration of their natural environment. The Big Sioux River runs through downtown, culminating in the namesake falls that lie at the edge of the city center. But there is something else running through the city these days too—entrepreneurial energy. Matt Paulson, founder of Startup Sioux Falls, is working hard to integrate resources for startups into one organization, capture that energy, and build out the Sioux Falls ecosystem.
Can you tell us a little about yourself? What is your background?
I am a startup founder that launched a financial media company called MarketBeat in 2010. MarketBeat publishes personally-tailored investment newsletters to more than one million email subscribers each day. Founding MarketBeat is how I became interested in startups and now I’m trying to build out an ecosystem for future startups in my community through Startup Sioux Falls.
Tell us about Startup Sioux Falls. What is the work that you’re doing?
Startup Sioux Falls aims to be the organization the ties the ecosystem here together. Sioux Falls is a city of about 250,000 people, and it has many resources for startups. We have capital, community, and development resources for entrepreneurs, but there was no one place you could go to find resources available to help our startup community.
We have sought to rectify that, being the digital hub and one-stop shop that points people to resources in Sioux Falls and across the region. In addition to connecting people to resources found on our website, we have a Facebook community of folks that are also interested in this space. It has grown to more than 6,000 members in a short period of time, and groups have started because of the connections folks have made there.
What makes South Dakota’s startup ecosystem unique?
South Dakota has no capital gains tax and no income tax. This is a good tax and regulatory environment for entrepreneurial activity.
We also have the best capital sources in the region--the state has an equity fund, there are a network of angel investment funds, venture capital firms, loan opportunities, and grant programs. Our funding sources are so attractive that startups in North Dakota and elsewhere will apply to them because they are unavailable in their location.
On that note, Sioux Falls has a helpful relationship with other larger cities in the region, like Fargo, North Dakota and Omaha, Nebraska. We’re far enough apart that we don’t need to compete with our neighboring cities, but this reciprocal relationship is mutually beneficial, and provides greater access to startup resources in all three communities.
What are the most exciting or important developments that have happened to the Sioux Falls and South Dakota startup ecosystem recently?
Throughout the last decade we’ve had substantial development in the downtown area. Investments totalling about $50-100 million in that timespan reinvented the city and made it a really cool place to live and work. There’s a lot of energy in the area now, and it is very encouraging.
In the last year, we had two big exits -- DocuTAP and Zuercher Technologies -- that are good examples to inspire the next generation of entrepreneurs in the Sioux Falls community.
Do you have any wishlist items for South Dakota’s startup environment?
Due to South Dakota’s lack of income tax, we aren’t able to provide incentives that way like North Dakota does through their tax credit for angel investments. Regardless, I would like to see some way to incentivize taking a risk on startups through the tax code. As an agricultural state, the state is responsive and well-versed with farmers and funding for agriculture, but they don’t quite know what to do with startups yet. I think providing an incentive for investment in startups would be a step in the right direction.
What are your organization’s goals for the coming years?
We are a new organization and will be continuing to work to centralize and become the single ecosystem organization in Sioux Falls. That is our goal. Right now there is a coworking space, events like TEDx, 1 Million Cups, and others that all have a startup focus. We would like to bring those under one umbrella organization.
Our current coworking space, the Zeal Center for Entrepreneurship, sits at the edge of our community, but Founders are preferring to work in coffee shops and other places downtown where there is a lot of energy. We would like to move our coworking facility downtown to be a part of that vibrancy as well.
We also have two big state universities each within an hour of Sioux Falls, South Dakota State University and the University of South Dakota. We would like to better integrate them into the ecosystem, because universities are often where young people get inspired to start their own businesses and be part of the startup ecosystem.
All of the information in this profile was accurate at the date and time of publication.
Engine works to ensure that policymakers look for insight from the startup ecosystem when they are considering programs and legislation that affect entrepreneurs. Together, our voice is louder and more effective. Many of our lawmakers do not have first-hand experience with the country's thriving startup ecosystem, so it’s our job to amplify that perspective. To nominate a person, company, or organization to be featured in our #StartupsEverywhere series, email firstname.lastname@example.org.