The number of startups in Hawaii has increased from 18 in 2013 to 145 in 2016 and total capital (revenue and funding raised) jumped from $28 million in 2013 to over $252 million in 2016, according to a “snapshot report” compiled by Sultan Ventures, a Honolulu-based boutique venture firm focusing on early-stage startups.
The report is based on self-reported information provided by the four major accelerators in Hawaii, and is designed to assess the current state of “Startup Paradise,” Hawaii’s moniker for its entrepreneurial community.
“Hawaii’s Startup Paradise has seen remarkable growth in the last three years, in the number of startups, funding, revenue and in the expansion of the ecosystem. We have nationally recognized accelerators and co-working incubators, a growing educational effort, Hawaii-based investment funds and government commitment to innovation,” said Tarik Sultan, author of the report and managing partner of Sultan Ventures and XLR8UH and treasurer of Hawaii Venture Capital Association.
Of the 145 startups in 2016, two had exits, 114 are growing, 13 are “zombie” stage (no or little movement) and 16 hit a dead end.
Sultan emphasized that greater corporate engagement is necessary to achieve more growth.
“Our corporations can provide resources and expertise our startup teams need in identifying market strategies, product fit, financing and management,” Sultan noted.
The report also uncovered several “interesting data points,” according to Sultan. For example, while approximately $10 million was deployed over this four-year period, over $250 million in total capital was generated. It’s estimated that nearly 1,000 jobs were created through these startups, jobs that by nature are in the technology and creative sectors.
Earlier this year, Sultan Ventures was selected as one of 17 entities nationally to partner with Village Capital as part of their efforts to connect Hawaii with mainland corporates and investors. The firm formed the Hawaii United Innovators in conjunction with XLR8UH, Energy Excelerator and others to invest in energy and agricultural innovation.
“The startup scene in Hawaii is on the rise,” notes Ross Baird, chief executive officer of Village Capital, a national nonprofit organization that finds, trains and funds early stage ventures solving specific global problems. “While most people think of Hawai’i as where the innovative people go on vacation, we are amazed to see great Hawai’i-based startups in food, water, energy and other sectors where the state is becoming a global leader.
“To make this happen, a community needs great ecosystem leadership, and we’re excited to partner with Sultan Ventures to help build great companies on the islands,” Baird added.
“Entrepreneurs thrive best in supportive, interconnected, pay-it-forward communities, rather than isolated silos,” says Victor Hwang, vice president of Entrepreneurship at the Kauffman Foundation. “Reports such as Sultan Ventures’ ‘State of Startup Paradise’ help shine a light on the amazing activity happening in ecosystems across the United States.
Hwang continued: “The Kauffman Foundation is excited to see this kind of environment taking place in Hawaii and look forward to keep on eye on entities such as Sultan Ventures in their endeavors as they overlap with our four main pillars towards cultivating entrepreneurial communities.”
About Sultan Ventures
Sultan Ventures is a boutique venture firm focusing on early-stage startups and investments. As a startup catalyst, SV provides pivotal resources via its powerful network of experts and investors. SV works closely with innovative startups, providing the hands-on expertise and access to capital needed to accelerate growth, as well as with investors, performing the diligence necessary to make strategic investment decisions.