Funding for emerging companies is in a lull, but overall, the Inland Northwest’s startup ecosystem is growing, and that growth is expected to continue in 2025, experts here say.

“We’re seeing more entrepreneurs enter the ecosystem and looking for help,” says Bill Kalivas, co-founder of LaunchPad Inland Northwest.

LaunchPad focuses on tech and life sciences by creating networking opportunities, hosting numerous events, and providing business-development services.

In the past 18 months, through its Springboard startup program, LaunchPad has worked with 30 Inland Northwest companies, between 20 and 25 of which it mentored this year.

“There’s a lot of people that have moved here since the pandemic,” Kalivas says. “A lot of these folks are looking at how to get connected and plugged in.”

Kalivas expects the startup community here to experience additional growth in 2025.

“It’s like anything else. Once people start seeing success for themselves and for their own businesses, word spreads,” Kalivas says. “Our region is going to see a pretty significant growth and transformation to becoming more of an innovation economy.”

Tom Simpson, CEO of business accelerator Ignite Northwest and president of investor group Spokane Angel Alliance, also is optimistic about the current and future states of the local startup scene.

“Spokane continues to be growing and prospering, and I’m encouraged by the businesses that I see that are forming,” Simpson says. “That continues to escalate.”

Simpson says his phone is already “ringing off the hook” with new companies and founders who want to present their ideas to him in 2025.

While the companies—as well as the number of them—have been encouraging to both Kalivas and Simpson, funding for startups has been down recently.

Simpson says that’s not because of anything in the region, however.

“That was really kind of consistent with the overall economic funding landscape throughout the country,” Simpson says. “2021 was just a very effervescent year. Companies were raising a lot of money at attractive valuations. Really, ever since then, we’ve been in a little bit of a lull.”

Kalivas also has noticed that raising seed capital and getting early investments has been more challenging of late.

“I think they’ve slowed down on early-stage investment and are being more thoughtful about how to pick winners,” Kalivas says. “There’s still investment, but it’s more challenging now for entrepreneurs and startups and even early-stage companies. They go through a lot more rigor to get those investments.”

Because of that, LaunchPad’s Springboard program is focusing more on helping companies bootstrap early on to build a customer base, make sales, and grow revenue, so when they’re ready to scale, and they need funding, they look more attractive to investors.

Simpson says there’s multiple reasons funding has been down.

One is that venture capital firms may have invested more heavily and at valuations that were too high in recent years, and now they’re digesting and responding to those decisions.

Also, the mergers and acquisitions market, as well as the initial public offering markets have been anemic in the last couple years, Simpson explains.

“Investors often feel more comfortable about investing when they’re also getting returns and liquidity,” he says.

Simpson predicts, however, that there will be an improvement in the willingness of investors to write checks to emerging companies in 2025.

“I think it’s quite ready to turn,” Simpson says. “Look at the major indices—the Nasdaq and the Dow and the S&P—they’re all at or near record highs. We have a new administration coming in that appears to be more favorably reviewing regulations. It’s kind of been three years since we had a healthy private funding market.”

There’s more to creating and growing a healthy startup ecosystem than being in a region flush with capital, however, Kalivas says.

“Just because you have venture capital or angel capital in your region, that’s not a sign that you’ll be successful as an ecosystem. If so, everybody could be the next Silicon Valley,” Kalivas says. “It takes mentoring, it takes finding good ideas, bringing the talent in.”

LaunchPad is working to build a large network of professionals, companies, and subject matter experts so they can point new companies and entrepreneurs that come to them in the right direction for help.

“We want to make sure that we help those entrepreneurs navigate the startup ecosystem, so they get to the right organization to help accelerate their growth and also provide mentoring,” he says.

Kalivas points to organizations like Ignite, StartUp Spokane, Greater Spokane Incorporated, Evergreen Bioscience Innovation Cluster, the U.S Small Business Administration, and business mentoring and counseling nonprofit Score as being among the resources available to startups in the Inland Northwest. He also mentions investment groups like Spokane Angel Alliance and Cowles Ventures LLC as key pieces of the startup ecosystem. 

Partnerships with researchers from local universities and entrepreneurs from existing companies are also vital to the growth and success of the startup ecosystem, he adds.

“It's critical that our region embrace and help innovators and get more and more people to help volunteer, to mentor, and we increase the pipeline of talent, and we track more funding and people to this region,” says Kalivas.