The Entrepreneur as Steward for Good
Alan E. Hall, Founder, Grow Utah Ventures
When Ogden, Utah, native Alan Hall sold MarketStar in 1999 – the company he launched from his basement a decade earlier – he ended up, as he puts it, with "three pots of money."
The first is to provide financial security for his family. The second went to the Hall Foundation to support education, employment, housing, healthcare, social services and the arts in Ogden and other parts of the world.
With the third pot, in July 2004, Hall began investing in entrepreneurship, giving his financial resources, time and expertise to help ensure access for others to the way of life that helped make him a success.
Igniting Business in Utah
Hall's generosity is filling a need he perceived in networking opportunities for Utah entrepreneurs. Partnering with a local business magazine, Hall co-sponsors the Business Ignitor Series in locations throughout the state on a quarterly basis.
"Our objective is to host networking events where we get all the entrepreneurs in the area together to meet, learn from a guest speaker, and talk to each other about their experiences," says Hall. "With no other forum like this in the whole state, the event is getting lots of traction. We've held two so far with about 100 people attending each. People want to get together."
Hall is also reaching out to university students throughout Utah. He and a partner, Greg Warnock, a founding managing director of vSpring Capital, are providing access to capital to students who have completed an entrepreneurial training program Warnock piloted called Junto (Spanish for "together").
Hall says he and Warnock plan to replicate the program in universities throughout the state. Up to 150 students who complete the program with strong business plans will have access to $2 million and mentoring from Grow Utah Ventures (GUV) and Top of Utah Angels, two endeavors Hall founded.
Not Your Typical VC Fund
"Grow Utah Ventures is not your typical venture capital fund where you get lots of people to put in money and you manage their money," explains Hall, who started the fund with $5 million and has since added another $5 million.
"I have chosen to put in my own money to Grow Utah Ventures," he says. "Therefore, I'm not beholden to people who expect a return on their money. We're looking for significant returns, anywhere from five to ten times our investment. The idea is to take that $10 million, get to $50 to $100 million, and do it all over again.
"We're going to find entrepreneurs, educate them, help them financially, help them with management, and help them market and sell their product. At the end of the day, these young entrepreneurs will create value in their business and I will be part of that value stream."
The focus for GUV is on economic development. As stated on the GUV Web site, GUV’s mission is to "help stimulate, unlock and develop the entrepreneurial potential and business opportunities for value creation across the Wasatch Front and Northern Utah." To accomplish this, GUV seeks to:
- Promote a community environment that is conducive to entrepreneurship.
- Directly invest in early state Utah businesses.
- Rally the financial and leadership resources of Utah investors to support leading entrepreneurs.
The plan for the first five years is to invest in up to a dozen portfolio companies with placement amounts ranging from $250,000 to $1 million. In September, GUV announced its first investment in a Salt Lake City company, Primary Intelligence, which provides sales, market, and competitive intelligence solutions. In addition to the equity investment, Hall now sits on the company’s board of directors.
Hall's approach is attracting a fair amount of attention in Utah’s business community, where GUV is filling a gap in VC money and expertise for startup companies.
Hall started Top of Utah Angels in response to area business executives' interest in his vision for GUV. Other venture capitalists have started or grown angel groups, but not many. Approximately 50 to 100 accredited investors will invest $25,000 to $50,000 a year in Top of Utah to supplement Hall’s GUV investments. The angel investors will also be tapped to give time and expertise as mentors to the companies they're supporting financially. Should these investment produce profits, the angels can choose to keep them or, like Hall, roll them back into the fund.
Passion for Opportunity
Hall's creative approach to philanthropy builds on a lifelong passion for new opportunities. Indeed, Hall's MBA classmates at Brigham Young University thought his lack of interest in going to work for Standard Oil of New Jersey or Proctor & Gamble was "weird."
"Back in 1972," says Hall, "there were no entrepreneurial programs."
Over the next 16 years, Hall pursued a variety of interests in the not-for-profit sector, jumping back to the for-profit world when a relative asked him in 1987 to lead a new technology company that had developed a software solution to supplement Novell products. Hall raised $5 million for Netline, Inc., and recruited college students to sell the product across the country. Although sales ultimately didn't support growth, Hall looked at failure as an opportunity.
"A phoenix can rise from the ashes," says Hall, referring to MarketStar, which helps high technology, consumer electronics and communications companies introduce and sell new products in North America.
Hall sold the MarketStar to Omnicom Group in December 1999, continues to serve as its CEO and speaks frequently to students and civic groups about entrepreneurship. And when he does, one of his primary messages is about giving back.
"I promote the idea," he says, "that we are stewards of these companies, which provides us a conduit to do good. I tell them it's not really your money. The Lord has blessed you with this. We should be careful, not greedy, in managing the money to lift the lives of our employees, clients, and communities."
© 2006 Ewing Marion Kauffman Foundation. All rights reserved.
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