Boise Attracts Startups Seeking Quality of Life Idaho's capital doesn't have the resources of a bubble town. But sustainable growth and mountain views are drawing entrepreneurs.

Editor's note: Over the next few months, we'll be taking a virtual tour of U.S. cities to see how the 2008 financial crisis has changed the entrepreneurial landscape, for better or worse. Read about New York, Houston and Washington, D.C., and Baton Rouge, La.

Entrepreneurs who set up shop in Boise, Idaho, say it's not just a city… it's a sweet spot. With a population of about 210,000, the state's capital has the best traits of a large city -- major university, quality healthcare, sizeable airport and a fair bit of culture -- and all the perks of life in a mountain town.

"There's easy access to skiing, mountain biking, hiking, you name it, but then I can get on a plane and go virtually anywhere in two hops," says Marshall Simmonds, founder and CEO of Define Media Group, a firm that specializes in search engine optimization and audience development and counts Condé Nast, Gannett and The New York Times among its clients.

Boise's livability and relative affordability helped fuel a real estate boom in the mid 2000s when newcomers and real estate speculators flocked to the city. When the housing bubble burst, it hit Boise particularly hard. After topping out at $220,000 in October 2008, median list prices fell 35% to $143,000 by April 2011, according to Zillow. Unemployment, which hovered around 3% in 2007, flirted with the double digits, averaging 9.1% in 2010.

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Nevertheless, many of the city's most promising startups were able to roll with the punches, says Mark Solon, a general partner with national startup accelerator TechStars, and a managing partner of Boise-based Highway 12 Ventures, which is seven years into its second regional fund. That's partly because Boise entrepreneurs are used to putting up with drawbacks -- namely, a lack of access to venture capital and professional resources -- for the Northwest's quality of life.

Highway 12 Ventures doesn't plan a third fund, but that is no reflection on Boise entrepreneurs, Solon says. On the contrary, "there are more interesting startups in Boise today than in any of the last 13 years I've been here," says Solon, who ditched his private equity job in Boston and moved to Boise in 2000.

Kevin Learned, past president at Boise Angel Alliance and cofounder of two $1.3 million angel funds, has noticed a similar surge in new ventures. When the group raised its first fund in 2007 it took more than a year to write its first check. "We launched our second fund last July and have written four checks, have three deals in due diligence and a couple more in the wings," he says. "The deal flow is far better today."

In fact, many entrepreneurs say there were silver linings to the recession. "We were a growing company in a no-growth environment so we had the ability to pick and choose the best people in the community," says Pete Gombert, founder and CEO of Balihoo, a software platform that helps national advertisers, Aflac, Geico and Kohler among them, manage local campaigns. The company, which was founded in 2004, now has nearly 100 employees, the majority of whom are in Boise.

The downturn also helped shine a spotlight on the economic role of startups in the local community, says Gombert. "Boise leaders are very open and helpful to anyone who has an interest in starting or joining a business," he adds.

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At the same time, there are more resources for startups than ever before. In 2012, the state approved the Idaho Global Entrepreneurship Mission (IGEM) initiative, a $5 million fund that will, among other things, offer innovation grants and increase research funding at Idaho universities. The Center for Entrepreneurship at Boise State University hosts speaker series and pitch competitions, and runs The Kitchen Venture Lab. This week, the university unveiled Venture College, a non-credit program that will offer student entrepreneurs individual coaching, weekly colloquiums, and opportunities for internships and funding.

And while the event isn't aimed at entrepreneurs and investors per se, the Treefort Music Festival has its own elements of innovation and technology. "It has the potential to be the Pacific Northwest's rendition of South by Southwest," says Define Media's Simmonds of the event, which debuted last year and will be kicking off again this week.

In the absence of homegrown venture capital, companies ready to move beyond the early stages of funding have to look elsewhere. The bar can be higher to entice outside investors, says Gombert, who moved to Boise 15 years ago. "I like to say that money flows to good ideas but I think there's a little bit of a higher hurdle when investors aren't in your backyard," he says. "You have to be that much better to attract funding."

But the drawbacks of running a software company in a smaller city are well worth the nonexistent commute, relative affordability and easy access to the great outdoors. "You can work for a startup here," he says "and actually have a life."