The American southwest, encompassing states like Arizona, New Mexico, Nevada, Utah and parts of California, has become a hotbed for technology companies and startups in recent years. Major tech hubs like Phoenix and Las Vegas offer opportunities for investors looking to put money into the next big app or startup. This article provides an overview of the southwest tech scene and tips for investing in apps and tech companies based in the region.
Strong startup ecosystem and venture capital funding drives growth
States like Arizona and Utah have seen increasing levels of venture capital funding in recent years, helping spur the growth of many technology companies. For example, Phoenix has developed robust startup ecosystems in fintech, bioscience and smart technology. Las Vegas is becoming known for data centers, AI and gaming technology. This influx of VC money and concentration of tech talent makes the southwest an attractive place to invest in new apps and startups.
Focus areas like fintech, AI and smart technology
Some of the most promising areas for tech investing in the southwest include financial technology (payments, blockchain, etc.), artificial intelligence, smart home devices, autonomous vehicles and gaming/entertainment. Major companies like Microsoft and Apple have major presences, while startups are proliferating in cutting-edge fields. Investors should research the technologies and target segmented with the most potential.
Conduct due diligence on the team and product
As with any high-risk investment, it’s critical for investors to conduct in-depth due diligence before funding an app startup. Research the background and capabilities of the founders and early employees. Make sure there is product-market fit and a clear path to monetization. Examine the underlying technology powering the app or platform. Setting clear investment goals and milestones can also help manage risk.
Plan exit strategy amid fast pace of acquisitions
The technology sector moves rapidly, with young startups often getting acquired once they gain some traction and proof of concept. Investors funding app companies should think through potential exit strategies via acquisition, IPO or other liquidity events. Building relationships with larger tech firms based in the region can help facilitate future exits.
The southwest United States offers promising opportunities to invest in new apps and technology startups across fields like AI, smart tech, gaming and more. Investors should leverage the robust startup ecosystems in places like Phoenix while conducting due diligence on teams, underlying technologies and paths to liquidity.