We couldn’t be prouder of our team today as Inc. named Mercato to its 2024 Founder-Friendly Investors list.

Inc., the leading media brand and playbook for the entrepreneurs and business leaders shaping our future, introduced the Founder-Friendly Investors list in 2019. Now in its sixth year, the list has established itself as one of the company’s most resourceful franchises, and has become a go-to guide for entrepreneurs who want to grow their companies while retaining an ownership stake.

"It has been a complicated few years for growth companies and the companies that fund them,” said Mike Hofman, editor-in-chief of Inc. “So we are happy to share with our readers the best, latest guidance on which venture capital firms, private equity firms, and growth-capital lenders have the track record and reputation of being especially good partners to founders and CEOs."
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We are happy to share with our readers the best, latest guidance on which investors have the track record and reputation of being especially good partners to founders and CEOs.

– Mike Hofman

To compile the list, Inc. went straight to the source—investor-backed entrepreneurs. The Inc. team spent months talking to dozens of founders of past portfolio companies about their experiences partnering with private equity, venture capital, and debt firms and how their portfolio companies grew during these partnerships.  This year, Mercato was recognized alongside 268 other investors that have proven they go the extra mile for their founders.

“Mercato has been an instrumental partner, helping me navigate business challenges and consistently supporting our pursuit of market leadership at every critical step,” said Brian Mandelbaum, CEO and Founder of Attain.

Bill Snyder, CEO and Founder of Cylinder Health added, “We partnered with Mercato because—in addition to the experience and value they bring to our business—we knew that the relationship would be deep and sincere. Mercato quickly built trust with me and the senior leadership team, and I know that I can call for guidance and support on any issue.”

Founded in 2007, Mercato is an established, founder-friendly leader in growth equity, dedicated to driving industry-leading results by partnering with entrepreneurs building category-leading companies outside of the traditional venture-rich technology hubs. With a mission to be a founder’s first call, our investment approach is enriched by our team’s focused efforts on providing portfolio companies access to a highly curated network of world-class service advisors, independent board members, and corporate development leaders.

To view the complete list of 2024 Inc. Founder-Friendly Investors, visit the full directory here.

Every year, Utah Business and the National Association of Corporate Directors (NACD) present annual awards to directors and board members who advise private, public, and nonprofit organizations. The event is designed to celebrate and honor some of Utah’s most engaged and effective board leaders, who exemplify knowledge, leadership, and excellence in corporate governance.

At this year’s event, Mercato Managing Director Ryan Sanders was honored as the 2024 Venture Capital Outstanding Director. Recognized alongside long-time family friend and personal hero Gary Crittenden, theLifetime Achievement award recipient, and Heather Zynczak, the public company award recipient and a 3x Mercato portfolio company board member, Sanders was in excellent company.

 Throughout his career at Mercato, Ryan has sat on eight boards, not including those he’s actively observed. From Stance to Lendio to Lambda, the spectrum of portfolio companies he has a hand in helping govern are broad, however, he brings the same experienced, singular focus on growth-stage strategy to each. His excellence in guiding Mercato’s portfolio companies along a path of sustainable growth is evident in both this recent recognition and his past efforts.
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The best board members bring active engagement. They are prepared and stand at the ready.

The NACD recognition comes just a year after Ryan’s graduation from the Kauffman Fellows program, a two-year, global leadership development program for venture capitalists; the close of Mercato’s largest fundraise, a multi-year effort that was led by Sanders; and Business Insider naming Ryan one of the top 23 VCs in the Rockies. It also comes at a critical time for exceptional board governance within the venture ecosystem. As venture-backed companies prioritize profitability over growth-at-all-costs, executive teams and boards are needing to exercise, encourage, and enable more discipline, grit, and creative thinking than in previous years.

These unyielding demands on executives and founders are top of mind for Sanders. During a recent Utah Business interview, he opined, “The best board members bring active engagement. They are prepared, and stand at the ready to see around the proverbial corners, help the CEO set the strategic direction, and move the business forward.” His embodiment of these beliefs is evident in the dog-eared decks, extensive notes, and open mind that he brings to every board meeting.

Ryan’s preparedness is similarly matched by his unbridled enthusiasm. It is undeniable that he feels fortunate to spend his career earning the opportunity to provide support, advocacy, and partnership to founders. As a result, he strives to be his executives’ biggest cheerleader and advocate both inside and outside of the boardroom, enthusiastically lifting up, amplifying, and championing these entrepreneurs and their mission.

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Between late 2015 and 2016, Mercato made two of its most important decisions since the fund’s investment in Galileo Financial Technology in 2014—hiring the two hungry, talented, and well-connected 30-something investors, Joe Kaiser and Ryan Sanders. Sanders, an Austin-based Mezzanine investor with Escalate Capital, and Kaiser, a Blackstone trained leader of Vivint Solar’s Capital Markets during its $1.6B IPO, joined Mercato at a time when the firm was looking for fresh investor perspectives and future fund leaders. In short order, the decision paid off—both investors were named Managing Directors in late 2021.

In the three years since their ascension to MD, Sanders and Kaiser have already left their mark on the firm and have carefully begun to chart its future course. From leading the fundraise of Mercato’s $400M Traverse Fund IV to leading nearly all of the firm’s growth investments over the past four years, their collective leadership has been instrumental in laying the ground work to help the fund thrive over the next decade and beyond. In part, it was these joint successes that contributed to the pair’s recent recognition by Business Insider for their role in furthering the impact of venture capital in the Mountain West.

Named last year as two of Business Insider’s “23 Most Important VCs in the Rockies,” Kaiser and Sanders don’t only have eyes for Utah, however. Since implementing a firm-wide investment approach in 2022 that focuses more broadly on deploying dollars in undercapitalized and underrepresented geographies across the United States and not just the Mountain West, 80% of the firm’s investments have been outside of the state. From east to west, the duo has led out on this strategic divide-and-conquer investing approach, traveling weekly to meet founders in their own backyards—an approach that is embodied by Mercato’s belief that startups shouldn’t have to start on the coast.

Despite being not even half-way through 2024, the team has already traveled to 46 cities in just 20 weeks—not including a two-week international stint spent visiting limited partners—to meet with founders and connect with fellow funders. Not looking to slow down anytime soon, the second half of the year promises to be just as busy, if not more so than the first half, and will be anchored by the fund’s first annual meeting outside of its home state.

A recent introduction, Mercato’s destination-based approach to its annual meeting is a testament to the duo’s wanting to continually reinvest in and highlight the cities and towns across the country that have been instrumental in the firm’s portfolio construction. Last year, for example, the team traveled to St. George, UT for its annual meeting to highlight the home of portfolio company, Vasion. This year, Kaiser, Sanders, and the rest of the team will welcome limited partners and portfolio executives to Chicago, an important sourcing city that represents a swell of undercapitalized opportunity and is home to three active portfolio companies.

While both Sanders and Kaiser are in the early years of their MD journey, they are already making an important impact on the fund. The recognition by Business Insider is just the first of many accolades that we are confident these two will each receive, and we are eagerly looking forward to the continued and marked progress they will assuredly make at Mercato.

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Interested in keeping tabs on our  travels? You can follow our weekly whereabouts on LinkedIn every Monday in our Mercato on the Move series. You can also find the full 23 Most Important VCs in the Rockies article by Business Insider here.

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More than a decade ago, most dresser drawers and laundry hampers were stuffed with (formerly) white, dystopian-esque piles of socks. Largely a cheap commodity at the time, socks were relegated to the function-over-form bin, and were most certainly void of any actual fun. That is until a few mold-breaking founders set out to transform the category into a beacon of self-expression and creativity.

Inspired by Skullcandy—Mercato’s first ever investment, and one of Utah’s most successful brands—and its revolution of the consumer headphone landscape, Stance was founded in 2009 with plans to similarly upend the $20B+ sock market. By focusing on infusing creativity and relentless technical innovation—think anatomical cushioning and targeted compression—into the design process, Stance managed to not only turn an everyday item into functional art, but also build a loyal, loud community of enthusiasts and brand ambassadors along the way.

From Dwayne Wade to Rihanna to Jimmy Chin, an eclectic, forward-thinking following of athletes, artists, and cultural icons were attracted to the company’s unique approach to brand building—free-spirited, fun, and a bit rebellious. Collectively known as "Punks & Poets," this group helped to elevate Stance socks from footwear to fashion, and consequently, propel the company into the pop culture zeitgeist of the late 2010s.

Today, Stance has sold over 110M units, opened dozens of brick and mortars, been named the official performance sock for both the NBA and MLB, and expanded beyond footwear into athleisure apparel, underwear, and headwear. While its offering has grown, every product line—from socks to snapbacks—still carries the same unmistakable Stance DNA that was born with the brand: a commitment to toe-to-head quality, creativity, and individual expression that is “Stitched Different.”

Think back to the last time you started a new job. Whether it was your first or fifteenth time going through the new hire onboarding process, it was most certainly riddled with paperwork. From setting up direct deposit to benefits management to employment verification, just the act of starting a job is…well, a job. This lengthy, tedious, and prone-to-error process is in large part due to the lack of interoperability of legacy payroll and benefit providers, and to be speak plainly—it isn’t working. Atomic is changing that.

Founded in 2019, Atomic Financial serves as an essential API bridge between consumer data and financial solutions by allowing unparalleled access to payroll, HRIS systems, and merchants. This connectivity empowers and enables employees to not only decide when, how, and with whom their data is shared, but to seamlessly access their own financial data at will. That means consumers don’t have to worry about their banking credentials being shared with a third party, or the friction and fraud risk associated with employment and income verification. It also means they can easily manage direct deposits, subscriptions, and bill payments, and even unlock year-round tax refunds.

Known as open banking, this framework provides permissioned access to customers’ data in order to provide innovative, and more transparent and inclusive financial products and services—and it is ushering in a transformation of the American banking landscape. By shifting the paradigm, open banking is demystifying the once opaque operations of the banking industry, providing customers with enhanced control over their financial data.

Open banking isn’t just a value proposition for consumers, however. For employers, it means streamlined operations, and for financial institutions, it means rich data points on their customers. Atomic, specifically, delivers on both of these fronts through a combination of its EmployerLink and PayLink products.

Our goal is to build a fintech infrastructure that enables a new generation of bank accounts and transforms banking applications into consumer-centric platforms.

– Jordan Wright, CEO

EmployerLink, a scalable solutions suite for human resource administrators, delivers companies a connectivity solution that enables real time access to payroll and HRIS systems, resulting in the delivery of best-in-class financial wellness benefits and performance management, and streamlined commission and compensation payouts. In conjunction with its UserLink product, the addition of Employerlink made Atomic a first-to-market provider of both consumer and business connectivity solutions.

Atomic’s newest product, Paylink, further expands this interconnected financial ecosystem to both the traditional and neo banking industries. This unified solution accelerates account primacy by allowing financial institutions an unparalleled opportunity to dive deeper into their customers’ financial behaviors and preferences while facilitating frictionless, user-permissioned access to merchant accounts, streaming services, and recurring bill payment switching. As a whole, the product represents a shift in the power dynamic of retail banking from the institution to the individual.

This shift is central to Atomic’s core belief that data has the power to unlock new financial opportunities for consumers. By enabling and promoting a more open banking system, and empowering millions of Americans to take control of their financial data to improve their own financial outcomes, Atomic is, undoubtedly, building better.

🎶 Nausea, heartburn, indigestion, upset stomach, diarrhea 🎶

This iconic, cheeky chorus line—a product of Publicis North America for Pepto-Bismol—was introduced by Procter and Gamble in 2002, and has since become permanently embedded into American pop culture. While most assuredly an attempt to grab attention, the jingle was also an attempt to break down American’s proverbial bathroom doors and normalize gastrointestinal (GI) issue relief. It was revolutionary at the time, and helped destigmatize internal dialogues around gut health. Unfortunately, it couldn’t solve for the psychological discomfort associated with seeking access to GI-related healthcare.

Fast forward to today. The GI care options and access available to us far surpass those of the early 2000s thanks, in large part, to a tsunami of digital health adoption. Bolstered by the COVID-19 pandemic, the adoption of digital healthcare has experienced an unprecedented surge, revolutionizing the medical services landscape. Telemedicine, remote patient monitoring, and virtual consultations have swiftly emerged as cornerstones of patient care. This rapid integration of technology not only helped to address immediate health concerns during a global pandemic, but also set the stage for a more patient-centric and accessible healthcare future. The flexibility and discretion provided by this healthcare revolution was particularly impactful for GI digital health—a $78 billion market.

Today, over 70 million Americans grapple with the challenges of managing GI issues, resulting in 8.3 million annual ER visits, and upwards of $136 billion in spend—a number greater than heart disease, trauma, or mental health. The dollars lost to GI issues, however, are only a fraction of the problem plaguing the patient population. Lost time, productivity, and quality of life are, undoubtedly, the more damaging side effects.

Enter Cylinder Health, a Traverse Fund IV investment, and a leading provider of digital GI care that is working to solve this problem. Led by their marquee virtual digestive health program, Cylinder is reinventing the management of chronic gut conditions through data-driven technology, advanced science, and on-demand human support. Currently, the program is provided to patients free of charge as an employer benefit, and has been wildly successful. Members who work for Cylinder customers—including, Walmart and US Foods—report consistent improvements in their quality of life, and satisfaction rates in excess of 90%.

We have proven that our scalable technology platform paired with our comprehensive care team results in better health, lower costs, and a much better experience for the members we serve.

– Bill Snyder, CEO

Following our lead investment in their $31M Series B, Cylinder is well positioned to be the category leader that solves for the digital consumer delivery blind spots that plague the entire health system. Their team of talented industry veterans, led by healthcare leader and CEO Bill Snyder, have set an ambitious vision for Cylinder's future, and are primed to be key contributors to the next era of U.S. healthcare.

It is our firm belief that by reducing healthcare costs for employers, and increasing employee productivity and quality of life, Cylinder is, undoubtedly, building better.

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.

The year is 2023, and the age of artificial intelligence (AI) is upon us. Much like a Hollywood remake, however, it feels like we’ve seen this movie before. While the technology feels fantastically new, the recent hype cycle feels eerily similar to that which preceded the AI winter of the 1990s. The key difference this time around, however, is that—like Dune—we believe the remake is better than the original.

More than any other technology that preceded it, the recent release of ChatGPT and the public consumption of large language models (LLMs) re-launched AI onto the world stage in an explosive manner. While the technology behind the boom of LLMs—known as machine learning (ML)—is incredibly exciting, it is all but certain that we have barely uncovered the tip of the AI iceberg and the world-changing opportunities that it will inevitably unearth. Deep learning, specifically, holds immeasurable promise.

A subset of ML, deep learning is distinguished by its use of neural networks that—unlike traditional data processing algorithms—learn directly from data without requiring manual feature extraction. This revolutionary technology has (so far) enabled autonomous vehicles, medical imaging for disease detection, real-time language translation, and neural artwork—things that, just a few decades ago, would have been considered science fiction fodder. In the not-too-distant future, however, deep learning will be a fundamental component of nearly every line of software, every piece of press, and every digital interaction. Regardless of the end application, the world will run on AI, and AI will run on Lambda.

Lambda is going to be the #1 GPU cloud in the world.

– Stephen Balaban, CEO

The Deep Learning Company ™, Lambda builds the workstations, datacenter servers, and cloud services that power the engineers and researchers at the forefront of human knowledge. As the only hybrid AI compute company, it provides deep learning engineers with an AI development environment pre-configured with common ML frameworks that simplify and accelerate the training and deployment of deep learning models. From sharing saved models and data sets to letting engineers easily spin up new virtual machines, Lambda is an AI infrastructure power player, and in the realm of vertically integrated deep learning compute power, no one company is building better.

In 2004, the introduction of high deductible healthcare plans (HDHPs) changed the insurance payment landscape in the United States for patients, but not for the better. Over the course of the following two decades, HDHPs—which typically only cover preventative care—would become the norm. Consequently, reactive care—such as medical emergencies and accidents—began to result in higher out-of-pocket costs. The outcome? Americans were frequently made to choose between visiting a doctor or going into debt.

In addition to the increased personal financial liability associated with seeking healthcare, the underlying cost of that care has been on the rise over the last two decades. Between 2010 to 2020 alone, the cost of healthcare in theUnited States rose by 37% on a constant dollar basis. Unsurprisingly, the prevalence of medical debt also rose to 58% over this same period according to a study byThird Way.

All of this is even more concerning when taking into consideration that the $98B (as of 2021) held in Health Savings Accounts (HSAs)is not solving for this liquidity issue. Paytient, on the other hand, is.

Founded in 2018, Paytient created the Health Payment Account(HPA), a new asset class and employer-sponsored benefit that provides covered members a way to pay for medical-related expenses without fees, interest, or credit checks. Designed to help provide relief to the increasing number of patients who struggle with high deductibles and empty HSAs, Paytient is a sponsored, interest-free line of credit that works in coordination with insurers and health systems, and allows members to pay for care over time through customizable payments plans that come directly out of their paychecks.

Few people plan on getting sick, and even fewer are immune to the financial impact of unexpected out-of-pocket healthcare costs

– Brian Whorley, CEO

In addition to selling into an employer as a part of its benefit package, Paytient partners with insurers and health systems to help minimize balance sheet risks and liabilities, reduce administrative burdens, and improve patient quality and experience. By integrating across the provider and payor spectrum, Paytient is helping to ensure more equitable, accessible, and predictable care. After all, when patients have the power to pay and the dignity of choice, they make better decisions, leading to improved provider NPS scores and increased volumes of commercially insured patients.

Today, Paytient serves over 1,000 enterprise clients in partnership with most of the Fortune 100’s major payors, and is developing new product features in pursuit of the company’s mission to not only ensure people have the power to pay for healthcare, but also to help them more easily access quality care for better prices.

By building towards a healthier future, Paytient is, undoubtedly, building better.

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