RNOX rolls out $10 million SLVR venture fund, plans Vegas expansion

RENO, Nev. — Since launching in April, Northern Nevada’s first tech accelerator has only known one speed: fast.

Despite the economic slowdown caused by COVID-19, Reno-based RNOX opened for business in the spring, kicked off its inaugural entrepreneurial program in the fall, and has already developed plans to expand in 2021.

All the while, RNOX is in the process of adding more efficiency to its operation, recently creating a new venture capital fund to the tune of $10 million, said Shaunt Sarkissian, RNOX executive chairman and co-founder.

The SLVR Fund — a nod to Nevada’s moniker as the Silver State — is focused on investing in the early-stage companies that go through RNOX’s 16-week R.E.A.L (Rapid Entrepreneurial Accelerated Launch) program, Sarkissian said. Startups are also eligible if they take RNOX’s consulting classes or have professional services done by the tech accelerator.

Previously, RNOX-accepted startups — which secure a $100,000 equity investment right off the bat — were set up to receive capital from a pool of third party investors.

Sarkissian and Co., however, wanted to streamline the process.

“We knew that we needed a dedicated venture capital fund in order for this to really scale properly,” Sarkissian said in a video interview with the NNBW. “It’s really about being more efficient. Before, we had to worry about this group of private investors, and it became … not only do we think this is a great company, but can we convince investor A, investor B, or investor C that this is also a good company?

“And we didn’t want to be hamstrung by that. It makes us more efficient to invest in the companies and allows us to grow faster.”

Basically, the SLVR Fund gives RNOX more flexibility and freedom to tighten its focus on “doing what it does best” — identifying tech startups that are primed for acceleration — while not having to worry about connecting founders with private investors.

As a result, RNOX will essentially act as a “de-risking mechanism” for the fund, he added.

“Most funds that are at this stage of investment, it can be very risky,” Sarkissian explained. “People tend to do a ‘spray and pray,’ where they invest small amounts in a bunch of companies and hope they do well; they write small checks and watch from afar. We’re in a bit of a different situation. Not only are we putting capital in, but we’re putting all of that work in the accelerator. We’re doing as much as we can to ensure that these companies can be successful long-term. And that definitely de-risks the investment.”

In conjunction with launching the SLVR Fund, RNOX is rolling out expansion plans. The firm intends to bring its tech accelerator to Las Vegas in “mid-2021,” said Sarkissian, adding that the team is eying Salt Lake City or Boise as a third location.

“From day one, we always knew we wanted to put these in other cities,” said Sarkissian, offering a hockey reference to illustrate the influence. “We want to ‘skate to where the puck is going’ in some of these new large emerging market areas. Because a big part of our thesis was always — and it’s starting to come true — that there’s this great migration.

“People are leaving places like San Francisco, and they’re coming into places like Reno. I think that trend is going to continue to accelerate.”

The SLVR Fund would also support the companies that go through the accelerators in Las Vegas and its third western location — the fund will be capable of investing between $100,000 to $250,000 in any single company, initially, and up to a total of $500,000 over the life of a company, Sarikissian said.

Moreover, once the startups get to a Series A financing round, the SLVR Fund will be able to add further investment, he added.

“I think there is such an opportunity to grow venture capital in the state,” Sarkissian said. “We’re not even scratching the surface. Given the opportunity, I think there should be more domestically housed venture funds (in Nevada) going forward.”

When asked, Sarkissian said he could not provide the number of backers that are on board for the fund. He noted that the team is planning to close and have the $10 million fund ready to go before RNOX’s next cohort of companies start the accelerator in February.

The SLVR Fund has not officially invested in any companies yet, but Sarkissian said they have a “pipeline of deals that are ready to trigger.”

Each year, RNOX plans to run five companies through its program in the spring and five more in the fall. Notably, applicants for RNOX must have a founding team and minimum viable product (MVP) and be a startup focused on one of five areas: fintech, SaaS, data security, distributed ledger technology/blockchain, and gaming innovation.

The accelerator received close to 100 applications from across the country for its inaugural fall class, but only ended up accepting three that met the criteria: sports gaming app Bookit Sports, service payment software developer Copper, and fintech startup BuildingBloc (whose founders are from Lake Tahoe).

Sarkissian said some people advised him not to start an accelerator in the middle of a pandemic. The seasoned tech executive feels staying the course was the right move.

“I think the best time to start things is when there’s these periods of dislocation,” Sarkissian said. “Even if people are resistant, you have to kind of put the pedal to the gas even more, because if you don’t, somebody else will. There’s this opportunity. And if we don’t lead as a state here in Nevada, that migration (from the Bay Area) may go farther west.”