Building Better: A Memorandum on our Fourth Growth Fund

For over 15 years we have had the privilege of partnering with visionary entrepreneurs and teams as they build transformational companies. Founded on the belief that capital champions change, we strive to invest diligently and equitably, deploying capital outside of venture-dense coastal cities and over-saturated technology hubs. By championing—what many consider to be— “flyover” founders and funding their visionary ideas, we believe that venture and growth capital have the power to transform the technological and economic landscape of middle America. No place is a better example of this than Mercato’s home, Salt Lake City, Utah.

In 2007, Greg Warnock and Alan Hall founded Mercato with the singular goal to bring local growth capital to the Wasatch valley. Rooted in a mutual passion for entrepreneurship, both founders understood that investing in local companies at the growth stage—and not just the venture stage—was a critical component of fueling the momentum of Utah’s start-up economy. By not having to rely on Bay Area or Big Apple VCs for later stage funding, Utah companies could partner with local investors that not only had deep community connections, but shared the common business values of service, stewardship, and sacrifice.

Out of their first fund—a $52M private equity vehicle–Greg and Alan made investments into six Utah-based companies: MediConnect Global, Fusion io, Control 4, Untangle and Skullcandy. In total, the investments yielded a 51.0% IRR, and established Mercato as a champion of the state’s startup community and a pillar of its budding venture economy.

While much has changed across the venture landscape since we opened our doors, Mercato’s commitment to fund the extraordinary has not wavered. In the decades since, local venture capital has continued to be an important driving force in fueling the expansion of Utah’s resilient startup ecosystem, in attracting top-tier global talent, and in enhancing the state’s capacity for innovation. As a result, Utah is one of the nation’s fastest growing technology hubs, and has one of the highest rates of billion-dollar startups.

With our fourth and most recent raise—a $400M growth capital fund—we are more energized than ever to replicate Utah’s success, and seek out the next generation of great American companies that will disrupt the status quo and solve today’s complex problems by changing the way we live, learn, and work—for the better.