By Martin Kidston/Missoula Current

In the closing hours of a two-day conference held last week in Missoula, a group of financial lenders and economic leaders sat behind a table facing a room filled with entrepreneurs.

The session's burning question was simple: How does a fledgling startup find the capital it needs to grow? Without financing, few businesses will succeed, but as it turns out, there's more than one way to approach the challenge.

“If you're a good deal, capital will find you,” said James Grunke, president and CEO of the Missoula Economic Partnership. “There's more capital looking for a home than you could ever imagine.”

James Grunke, president and CEO of Missoula Economic Partnership. (Martin Kidston/Missoula Current)
James Grunke, president and CEO of Missoula Economic Partnership. (Martin Kidston/Missoula Current)

Grunke, who helped close the State of Missoula conference hosted by the Missoula Chamber of Commerce, said MEP has built its own angel investment network to provide capital to early startups. The network held its first official pitch session in 2012.

Since then, Grunke said, the network has grown to attract high-value investors by providing quality opportunities. The investments generally range from $250,000 to $750,000 and are offered to Missoula companies in the early stages of growth.

“There's no group of people more willing to help than Montanans, and no group of people more unwilling to ask for help than a Montanan,” Grunke said. “You've got to ask for help – know what you don't know. If you want money, you have to ask for it. You have to close the sale.”

Accessing capital isn't as hard as the long-standing myth suggests, Grunke said. It's available to the right product with the right people in place, though it's not the only way to grow a business.

“We spend a lot of time talking with businesses at MEP, and they're often focused on the capital side,” Grunke said. “We say, actually, a pretty good source of capital is sales or revenue – customers. That's not a bad way to raise revenue. We want to know your customer strength, how you're going to get them. What's your sales strategy?"

Paul Gladen, founding member of Hellgate Venture Network and director of Blackstone LaunchPad at the University of Montana, said many burgeoning entrepreneurs come eager to write a business plan and seek funding. Those thoughts, however, may be premature.

Identifying the company's customer base is the wiser first step, he said.

“The starting point actually is to figure out if you have something the world wants,” said Gladen. “That's where we focus a lot of our time and attention, helping entrepreneurs with these amazing ideas generate some evidence that customers want this, because investors want to see a return on their money. The starting point is to really understand that customer base.”

Many startups often seek funding from “friends, family and fools.” But Gladen said a fourth “F” is available to the right concept through the 4th F Fund offered by Blackstone.

“The reason we created the 4th F Fund is because we do recognize that sometimes, to help you validate that you have a product, a service or an idea that customers would really be interested in, you need to create some sort of prototype or root concept, or do some additional research,” he said.

Gladen cited one recent success in Chilton Skis. Like many entrepreneurs, the Missoula company's founder, George Gaines, approached Blackstone with an idea but little funding to get it off the ground.

Blackstone worked with Gaines to create a financial model to build a prototype ski. With a prototype in place, the reasoning went, Chilton could test its product and generate the orders needed to produce its first product run.

With a prototype in place, Gaines successful pitched his young company during last year's John Ruffatto Business Startup Challenge at UM. He won the competition and received a cash prize of $5,000.

“More importantly, he had people in the audience that evening coming up to him saying they wanted to order a pair of these skis,” said Gladen. “There was a journey to go through, but it all starts on whether you have evidence of the marketplace.”

That marketplace sought out Molly Bradford, co-founder of GatherBoard, a software platform that powers such popular sites as and event boards in other cities, including Boise and Bozeman.

Paul Gladen, left, and Molly Bradford discuss funding opportunities available to Missoula-based startups. (Missoula Current/Martin Kidston)
Paul Gladen, left, and Molly Bradford discuss funding opportunities available to Missoula-based startups. (Missoula Current/Martin Kidston)

Bradford also owns Missoula Indoor Ads, which she used to fund the development of GatherBoard. Random calls inquiring about her software program helped her launch the growing company.

“By the third or fourth call, I looked at Colin (Hickey) and said, I think we have a product people want,” Bradford said. “I had income already coming in from Missoula Indoor Ads. We were able to bootstrap a lot of the software development process for ourselves.”

Bradford has since sought capital to conduct additional market research and grow the business beyond its current capacity. She is currently vying for several grants, including the Big Sky Trust Fund and a workforce training grant.

“I went to every single free resource I could find and asked for help, because I didn't have all the answers,” Bradford said of the early days. “We need to bring on more staff to handle the growth that we're projecting and we're also experiencing. I need an IT person on staff, a sales person and a support person to continue to run our local products, and also expand my national software product.”

Grunke and others at the table lent additional advice. Get to know the banker, ask for help, and work to promote the product.

“You need to tell your story at every opportunity you can,” said Grunke.

Contact reporter Martin Kidston at