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Internet entrepreneur Dan Hall’s 2-year-old social networking company attracts more than two million unique visitors per month; counts some big-name clients as advertisers; and has already generated its first profits.

But despite that success, Hall just couldn’t line up the investment capital that he needed when pitching the idea up-and-down the West Coast, including in the company’s hometown of Seattle. And the former infantry officer says that has to do specifically with his company’s subject area: guns.

GunUp’s mission is to create a one-stop destination to “share, discuss, review and compare guns with confidence.” The startup was always a bit of an unusual fit in Seattle, with Hall even mentioning the oddity of his company’s location in an interview I did with him a couple years ago.

“Unfortunately, fundraising for a firearms company has been a non-starter on the West Coast for a variety of reasons so late last year I started reaching out to more firearm — and honestly business — friendly states,” said Hall in an email to GeekWire. “After numerous flights, meetings, and pitches, GunUp will be relocating to South Dakota on July 1st.”

Historically, guns have been a tender subject in Seattle. And the scrutiny certainly has been elevated in recent weeks in Seattle, which has drawn national attention for a series of horrific shootings.

Hall also represents the second entrepreneur in the past 30 days — following in the wake of  Tomo co-founder Tony Wright — who has decided to move out of Seattle because of what has been described as a lackluster early-stage fundraising climate. (Wright departed last month for Silicon Valley).

Hall said that South Dakota has been welcoming and that they’ve specifically targeted firearms companies in recent years. He will be moving to Sioux Falls, along with two other staffers. (Note: Reference to the city has been corrected since original post. Thanks for the help in the comments.)

“It doesn’t hurt that I’ve raised more money there in three months then I did in two years in Seattle,” said Hall, adding that it has been “an interesting journey.”

But Hall said he’s sad to be leaving Seattle too.

“I will miss the startup ecosystem and community here but South Dakota is a great fit for GunUp and vice versa,” he said. “This hasn’t been an easy decision but as a founder I am determined to see my startup succeed and the opportunity in the firearms industry continues to grow.”

Here’s the email that Hall sent out to friends in the startup community earlier today:

Dear Friends,

I am not a fan of mass emails but in this case it is the most expedient way to get the news out. As of July 1st, my startup and our core team, including myself, will be relocating to Sioux Falls, South Dakota.

Washington is truly a beautiful state with a vibrant startup ecosystem and we are sad to leave but it was becoming increasing clear late last year, after doing business in Seattle for over a year and a half, that we needed to find a friendlier environment especially when it came to fund raising. I appreciate the mentorship, friendship, and support everyone has provided to me as a first time entrepreneur and I still will be back in Seattle quite a bit for VetStartups.org. As a lot of you may know, I recently launched VetStartups.org, a 501(c)3 dedicated to helping military vets build and launch technology startups.

South Dakota, of all the states we talked with, was the most welcoming and accommodating. South Dakota has no individual or corporate income tax, no business inventory tax, and no personal property tax. The South Dakota Governor’s Office of Economic Development has done a wonderful job connecting us with local business and community leaders. South Dakota is also unique in the fact that they specifically target firearms companies for relocation. Sioux Falls is a vibrant city with the infrastructure and amenities we were looking for while providing an amazing quality of life and low cost of living.

However, our relocation to South Dakota provides us, most of all, the resources and environment GunUp needs to thrive. It doesn’t hurt we were able to raise more money in 3 months in South Dakota than in the two years we were in Seattle. We are excited about the upcoming move to our new home. Look for great things in the near future after we get settled in Sioux Falls. Thanks again for everything,

Dan Hall

CEO, GunUp.com                     

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