Startup Resources: Launch NH

Long before the work-from-home revolution attracted an influx of fresh talent to New Hampshire, real estate entrepreneur Jamie Simchik was bullish on his home state’s potential to lure founders. And while its proximity to Boston and its higher education system, low tax rate, and quality of life are critical ingredients for startups, Jamie noticed that more was needed to foster a vibrant ecosystem.

That’s why he co-founded Launch NH, a partnership with the Softeq Venture Fund platform to back startups from within and outside New Hampshire. The partnership marked the first expansion of the Softeq Venture Studio into a new state and provided incentives to help founders get off the ground.

Startup Boston caught up with Jamie to discuss the partnership and his strategy to build an active startup base in the Granite State.

SB: Walk me through the origins of Launch NH: How did you get started, and what’s your mission?

JS: I have a background in commercial real estate, and opened a co-working space several years ago called HRKNSScowork. We experienced what I call the “Planet Fitness effect,” where everyone's paying, but nobody’s showing up. And so I was really trying to create a better vibe and reached out to the New Hampshire Tech Alliance to host an accelerator program that they discontinued. During those conversations, and through a mutual investment in a smart dog collar company based in Portsmouth, we met the Softeq team, and they were ramping up their venture fund and their venture studio. It was a perfect fit: We didn't have the capacity to build from scratch, and they were looking for additional leads on companies.

So we've been at this for about a year. We've committed to raise or help them raise $5 million for their $50 million fund, and have raised $2 million to date. We are facing those macroeconomic headwinds like others, but as a result of this partnership, we're getting the opportunity to have six New Hampshire companies go through the program every year. It’s something that is probably very commonplace in other parts of the country, but we're excited to bring this to New Hampshire.

SB: For these companies going through the program, is it almost like an incubation where you're helping them get started, or is it or is it more traditional VC?

JS: Great question. It's definitely companies that are pre-seed or seed stage. Every company that goes through the program commits to providing 6% of their company to the venture fund, and they get access to a $125,000 convertible note. For the majority, it's a three-month program, and then there's a pitch roadshow at the end to get funded beyond pre-seed or seed.

SB: And you mentioned six companies from New Hampshire go through the program every round. What kind of companies are you seeing apply for this, and what kind are you looking for?

JS: We’re just getting started, and have had four or five companies apply to date, all generally in that tech space – or tech adjacent, because Softeq at its core is a software development firm. So that's how they can really add value. We’re looking for companies with a minimum viable product, and the founders tend to skew kind of on the older side, where it’s not their first attempt – but that’s not a requirement.

SB: How do you see the startup ecosystem in New Hampshire growing? Has it been slow because of the macroeconomic conditions you mentioned, or has it been picking up because the remote work boom is attracting talent to the state?

JS: It seems very fragmented, and we’re trying to get the word out, and as part of that we do a lot with the New Hampshire Tech Alliance. I don't want to put words in their mouths, but the area where we struggle collectively is finding those new companies. One thing we ask ourselves is how we can get them to come out and tell us what they're working on. This may be true in other states, but the government entities that offer assistance – state and federal – are really good for brick-and-mortar companies that have inventory, and not so great with people who are looking for investment in an idea or a piece of code.

SB: And my last question is on your outlook for 2024 and your goals for next year.

JS: We’re going to have another pitch event next fall and try to get more New England or New Hampshire companies involved. And we want to benefit from our relationship with Softeq, and make people aware of it. We’re thinking of providing a pitch bootcamp for companies that do not have that ability.

We’re building the plane as we fly it, and we’re not the first in the state to try to tackle this, but I do feel like there are some gaps and we're learning those. A couple of areas we're looking at is how we get programming so that founders come out of the woodwork. We have some ideas there.

The Tech Alliance is doing a good job working on increasing diversity across the board, and we'd like to make progress there. We get a lot of white males on stage at the pitch event, and it’s not intentional. We’re trying to work more with diverse founders, or are encouraging others to pursue their passion and try something new as an entrepreneur.

And getting back to our conversation about fragmentation – it’s the case with companies and investors alike. For example, if someone pitches an investor, they decide to be the lead investor, but that round is not fully subscribed. I've spoken with companies that say they’re still trying to raise, but they wish investors were sharing deal flow more often because that'll be a lead generator there. In other words, if you feel very passionate about the company you're investing in, you should reach out to others because you want to make good on your investment. I don't know if we have an answer to that issue, but we're working with the Tech Alliance to address it. And at some level, it involves getting the state involved to prioritize this.

About the author: Randall Woods is a former editor at Bloomberg News and currently is a Senior Vice President at SBS Comms, a communications agency for technology companies and startups.