March 09, 2017

To help social entrepreneurial ventures grow, Social Venture Partners launches in Miami

 

Launch

Lauren Harper (center), founder of Social Venture Partners Miami, introduces the organization’s founding partners at the launch event Thursday at New World Center. SVP Miami will support selected social impact ventures with capital, mentoring and connections. Nancy Dahlberg ndahlberg@miamiherald

By Nancy Dahlberg / ndahlberg@miamiherald.com

A new group of venture philanthropy funders will be taking young social impact ventures under its wing, offering mentoring, strategy advice and connections, as well as capital.

Social Venture Partners Miami (www.svpmiami.org) launched on Thursday and it is part of a global network of 3,500 venture philanthropists now in 43 cities in nine countries who have collectively invested more than $63 million in about 840 social ventures since 1997.

SVP partners are professionals, executives, entrepreneurs and community leaders; together they select social ventures in the community to back, and they contribute their time, talent, capital and connections to help the ventures grow, using a venture capitalist model to reap social returns.

At the launch of SVP Miami at the New World Center, Paul Shoemaker, the Seattle-based founder of the global Social Venture Partners and author of "Can’t Not Do," said every SVP chapter needs an energizer bunny and Lauren Harper, the founder of Miami’s chapter is that. “Join the movement, write your check, be a part of this network that is going to make Miami a better place,” said Shoemaker, who also spoke at the Philanthropy Miami event earlier in the day.

The idea is that SVP will be an on-ramp, helping promising concepts that already have traction to grow and become “venture ready” for social impact funders, said Harper. Over time, SVP Miami will mentor and fund a number of ventures. A big differentiator with other programs, she said, is that SVP plans to partner with the ventures they back for three to five years.

Harper also co-founded the Center for Social Change, a Miami co-working and education center for nonprofit and for-profit social ventures.

“The center does an incredible job bringing people together ... but more is needed,” said Harper, noting that Miami is a city of startups but not scaleups. “The SVP model provides the right combination of resources and capital to support social ventures that can scale. And this is the right time to do this in Miami.”

At the launch, attended by a couple hundred people, Harper introduced the founding partners – 11 so far.

“The big vision is we need to transform the way we give and the way we invest, the way we do business and the way we do nonprofit work,” Harper said. “Globally, there is a whole new movement and a whole new industry, a trillion dollar industry, called social impact investing that allows for financial returns social and environmental returns.

“I think Social Venture Partners will this be an amazing bridge that will bring the non-profit and for-profit world together to drive change.”

Follow Nancy Dahlberg on Twitter @ndahlberg

READ MORE: The do-good Sharks pick a winner: pop-up barbershops

Lauren

Paul Shoemaker, founder of the global Social Venture Partners and author of “Can’t Not Do,” makes remarks at the SVP Miami launch event at the New World Center with Lauren Harper, founder of the Miami chapter. Nancy Dahlberg ndahlberg@miamiherald.com

 

December 30, 2016

Why mobile payment tech is leap-frogging in Latin America

YELLOW PEPPER SPOTLIGHT b e

YellowPepper, a Miami-based tech company, is undergoing a growth spurt, recently deploying its mobile payments technology in Colombia, Ecuador and Mexico and looking to expand to other Latin American countries. To further power that growth, Volta Global, run by emerging markets specialist Marko Dimitrijević (pictured above at right), recently became an investor in YellowPepper, run by Serge Elkiner (pictured above, left).

 

BY NANCY DAHLBERG / ndahlberg@maimiherald.com

The world of mobile payments is one of the hottest segments of the financial technology industry. Based in Miami, YellowPepper has been a pioneer of mobile payment technology in Latin America, where an immense market need and a millennial-rich population of early adopters converge.

YellowPepper has done this before. Years ago, the YellowPepper team targeted the untapped Latin American mobile banking market and developed a state-of-the-art platform to enhance the overall consumer experience. While continuing to grow the mobile banking side of the business, YellowPepper is now focused on another untapped opportunity: mobile payment solutions for consumers in the region. The company, founded in 2004 in Boston, provides financial institutions with the latest technology that alters the way in which consumers and retailers transact.

YellowPepper is undergoing a growth spurt, recently deploying its mobile payments technology in Colombia, Ecuador and Mexico and looking to expand to other Latin American countries. To further power that growth, Volta Global, run by emerging markets specialist Marko Dimitrijević, recently became an investor in YellowPepper. The terms of the investment weren’t disclosed, but Miami-based YellowPepper has raised more than $40 million in venture capital to date, making it one of the highest funded early-stage fintech companies in Miami.

With such a large market opportunity, mobile payments continues to attract attention in the venture capital community. The global mobile wallet market is expected to reach $635 billion by 2020 from $113.5 billion in 2015, increasing 41 percent annually between 2015 and 2020, according to Research and Markets. The turning point, many experts cite, is the growing availability and use of mobile phones. With the mobile and financial expertise of CEO and co-founder Serge Elkiner coupled with the emerging markets and investment experience of Volta, YellowPepper is poised to exceed its expansion goals in the coming months, the company said.

On the heels of YellowPepper’s success in the Latin American mobile banking space, the Belgian-born Elkiner moved the headquarters to Miami, where offices of U.S. and Latin American financial institutions are based and a growing number of fintech companies have set up operations. YellowPepper, now with a team of 68, currently partners with top financial groups and institutions, including FIS and MasterCard, in the region and is poised to launch in Peru and the Dominican Republic shortly. After years of heavily investing in research and development, YellowPepper turned profitable last year.

The tech company is hiring, too. It is looking to add up to a dozen engineers to its Miami headquarters, located in art-adorned offices in Wynwood. YellowPepper now has about 16 employees in Miami.

Dimitrijević, who has been investing in emerging markets for more than 25 years, has recently focused on frontier markets, or smaller emerging markets beginning to take off, and recently authored a book, “FRONTIER INVESTOR: How to Prosper in the Next Emerging Markets.” Prior to founding Volta, the Stanford MBA graduate ran hedge fund company Everest Capital, which managed more than $3 billion in assets at its height, but a single bad bet in January 2015 wiped out one of its funds after the Swiss National Bank unexpectedly removed the franc’s exchange-rate cap against the euro, sending the currency surging, media reports said. He returned investors’ capital, later started Volta and now invests with his own funds, making strategic investments. I set up Volta Global as a private investment group and we do both public and private investments, and that’s how we got to meet YellowPepper,” Dimitrijević said.

To get the view from both sides of the table, the Miami Herald met with Elkiner and Dimitrijević before the holidays and asked about YellowPepper’s growth, recent developments and the future, as well as about frontier investing and why YellowPepper falls into Dimitrijević’s investment wheelhouse. Here are excerpts from that conversation.

Q. I know you are actively hiring in Miami. How will you use the new funding, Serge?

A. To support our growth. We’ve been able to grow internally in markets where we were growing very fast, Colombia, Ecuador and Mexico, and we are launching our mobile payments in the Dominican Republic and Peru. We already had a strong presence in Peru in mobile banking for the past 10 years. We are also in Bolivia with mobile banking.

Yepex is our mobile payments platform and we develop separate white label products with financial institutions from the platform.

For our mobile payments solution, we have more than 100,000 users in Colombia and it is growing every day, Today it is our biggest market.

In Colombia, Ecuador and Mexico, 220,000 merchants are currently enabled with our mobile payments technology. In the next four to six months, there will be 365,000 merchants coming on board.

Q. Marko, you have a new book on investing in frontier markets and mobile payments is one of the themes of investments that is growing in Latin America. Why do you believe in mobile payments?

A. We’ve seen the story before. We have been early investors before in several frontier markets and we saw a leap-frogging in some of those countries. For example, in some countries only a fortunate few had a fixed-line phone and basically [the countries] skipped directly to mobile and everyone has a mobile five years later. We see that in payments in countries like Kenya, where very few people had a bank account but went directly to apps and mobile and we think the same story is happening in Latin America, particularly in Ecuador and Colombia, which are frontier countries. And we believe YellowPepper is really at the forefront in Central and Latin America and that is really exciting.

Q. What is a frontier market?

A. Frontier markets are smaller emerging markets. Think emerging markets of the future. Twenty years ago few people focused on India, few people focused on Russia and even fewer focused on China — they were all novelties. Few people today focus on Ecuador or Colombia or the DR or Vietnam or Bangladesh, but those will be the markets of the future. You catch them at their inflection points, right before the hockey stick starts to turn up. That is what is so exciting about those markets.

In Latin America, that is everything but Brazil, Mexico and Chile — it’s a very, very large market.

The frontier markets — that’s where the growth is in the world. In the large emerging markets, Russia, Brazil, China, all are slowing or have slowed over the past five to 10 years. If you look at the top 75 fastest-growing economies in the world, 71 are in the frontier markets. They are starting at a much lower base and are going to be growing much faster over the next 10 to 20 years.

Q. Marko, what attracted you to YellowPepper?

A. The people, and obviously they have been at it for a number of years. They have built a cohesive and attractive team and created something we think is a very powerful mousetrap and building it in our backyard. It’s exciting for Miami to have a company of this caliber here.

The potential growth for YellowPepper is much higher than a company doing a similar thing in the U.S. or a more developed emerging market.

Most people don’t realize how attractive the frontier markets are because they are all individually small. But when you take them all together as a group they are larger than the U.S. or China. That’s why it is remarkable when companies like YellowPepper get on our radar screen because they have taken advantage of this very powerful force and the fact that the demographics go in favor of those markets. YellowPepper focuses on the most attractive segment, 15- to 34-year-olds, the early adopters, and those are massively located in frontier markets.

Q. What’s next for YellowPepper, Serge?

A. One thing is consolidating the markets where we are right now. By the end of the second quarter [2017] in Colombia you will be able to make mobile payments in 100 percent of the shops that take credit card or debit cards. That’s 250,000 merchants, and 100 percent of that is based on our technology.

And expansion. In the last 18 months, we have built the second generation of our platform. It’s an inhouse platform that connects to international platforms, like Mastercard, Visa, American Express and other institutions in those countries. We are also integrating with Facebook messenger for our clients. Given that we are connected to these global platforms, the technology we built is fully deployable globally. This changes the story for us.

Right now we can pitch a bank in Vietnam, for instance. … What we learned and have done in Latin America is totally applicable to other markets that are similar, such as Southeast Asia. We could in the future do a distribution deal to push our technology outside of Latin America and this was not possible 18 months ago. Now it’s completely viable.

And we are one of the very few players in emerging markets with a very deep understanding of emerging market dynamics.

The potential is huge. But Latin America is still virgin territory for us. … We’ve built the highway and any cars that want to use it are welcome to come and pay the toll and use it. It cost us a fortune to build it, but now the value is there.

Q. And what is your biggest challenge?

A. People still don’t understand that it is more secure to do things with your mobile phones. There is a lot of work still ahead of us in the markets we have been strong.

Tokenization of the transaction means the credit card or account number of the debit card is no longer part of the transaction. What goes through is a one-time generated number used for that transaction. If someone steals your token, they can’t do anything with it. There is a lot of security around that and so far we have had no problems.  

Q. Who are your users?

A. In Colombia, I can tell you there are almost twice as many millennials using our product … than the traditional credit card and debit card. … We have 63 percent in the 18-35 segment. Another statistic that is very interesting: 65 percent of our users have used [our product] twice already meaning they are becoming repeat users. The challenge is breaking that barrier with the consumer so they use it the first time, but the first time they use it, they are likely repeat users.

SERGE ELKINER

Title: CEO and co-founder of YellowPepper, a Miami-based company that provides mobile banking and payment solutions across Latin America.

Previous: Vice president of business development at HelloTech Technologies, an Israeli firm providing remote monitoring and mobile payment solutions for vending machines.

Education: Bachelor of science in accounting from Boston University.

MARKO DIMITRIJEVIĆ

Title: Founder and chairman of Volta Global, a private investment group. Author of “FRONTIER INVESTOR: How to Prosper in the Next Emerging Markets” (Columbia University Press, 2016).

Previous: Investor for more than three decades, mostly in emerging markets, and ran hedge funds.

Education: MBA, Stanford University; bachelor’s in economics, finance and management science, University of Lausanne.

 

Nancy Dahlberg: @ndahlberg

 

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Loren Ridenger shares her secrets of success changing the face of beauty

Q&A with EcoTech Visions’ Padwe Gibson: Going green from the ground up

Q&A with Jim McKelvey: LauchCode ‘just flat-out life changing’

 

November 10, 2016

Argentina to Miami, a bridge worth building

Wolox

By Natalia Martinez-Kalinina

As we often hear, Miami is a city uniquely poised to be a hemispheric hub. But despite being the transit isthmus that connects our hemisphere and representing a natural landing pad for companies growing from Latin America, we have historically fallen short of creating a sustained bridge for tangible and bidirectional engagement.  Entrepreneurs from Latin America come half blindly and arrive without a fully nuanced understanding of our infrastructure, differences, logistical shortcuts, critical stakeholders. As such, the learning curve is often steeper and the adjustment period longer than it should be - and that is in part our fault.

Argentina has long been recognized as one of the primary entrepreneurial ecosystems in Latin America with regards to high potential entrepreneurs. In equal measure, however, it has also been plagued by political malaise, economic instability, unreliable institutional resources, and its own absence from global capital markets. Now, although the country is very much in a transitional period after the 2015 election and the myriad economic and legal changes underway, Argentine entrepreneurs can - for the first time in several decades - see a horizon in which the country’s public sector, institutions, markets, and workforce can truly dovetail to generate growth, investment, and innovation.

Miami has a ways to go before we can truly claim the title of regional epicenter, but figuring out how to support Argentina’s wave of growth and appetite for engagement represents a unique opportunity to add value to the region and truly deliver on our vision as a gateway.

As a first step to test these waters, a group of us came together to co-author a full day of programming within StartupWeekBuenosAires - the largest event of its kind in Latin America-  specifically focused on how to engage with the U.S. ecosystem and market by way of Miami. Ahead of the full agenda being announced shortly, if you are interested in participating or learning more, please fill out this form.

Leading up to the event in December, we will be featuring interviews with a varied range of Argentine entrepreneurs and companies making their way to Miami. The first installment and inspiration for this series was an interview with Balloon Group. Below, we take a closer look at Wolox (pictured above), a growing software development company currently exploring its potential for expansion to the US from Buenos Aires, starting with a footprint in Miami. We spoke with Luciana Reznik, Wolox’s CEO (pictured here).


WoloxlucianaTell us about Wolox - how the company emerged, how has it changed over the years?

In 2011, Wolox was founded to innovate and help startups with all their product strategy and technological needs. With the lack of cutting edge tech solutions in Buenos Aires at the time, our goal was to bring high impact technology to the entrepreneurial ecosystem of South America. Concurrently, Buenos Aires was beginning to position itself as a major entrepreneurial city making for an ideal target market. After the great successes of the 90’s such as MercadoLibre, Despegar, and the first accelerators opening their doors, many new success stories continued to emerge. Like so, being an entrepreneur became an attractive career for many.

At this time, we were (all) finishing our degrees in computer engineering at The Buenos Aires Institute of Technology, a prestigious engineering university in Argentina. With other entrepreneurial experiences under our belt, an opportunity became clear to us: from a business standpoint, there were a larger number of individuals with good ideas and execution capabilities, than those with tech talent who could successfully carry out these ideas. This was our “aha” moment if every one of these individuals could be the CTO of a business venture, why not join together and become the CTOs of many business ventures?

Through the years, not only did we become experts in software development, but in all disciplines that influence the creation of top quality products as well as best practices when developing a startup. From the stage of conception to execution, researching the product market fit and implementing strategies to scale the business, Wolox is the team startups choose to partner with. Today, having worked with more than 80 startups has given us the know-how and key experiences to stand out within the industry which is invaluable to our clients.

Where do you see the growth and future of the company in the next years?

Today, we have around 100 employees and 100 products developed, with continual growth every day. We have managed to penetrate new markets in the USA and other countries in Latin America. Additionally, Wolox has established a team of exceptional individuals who discover innovative solutions to the challenges we are presented with while working ethically and professionally. Thanks to our ongoing positive recognition, larger companies have begun to use our services of design thinking to find solutions to their problems and/or establish innovation within their brands.

At Wolox, we have also been able to create a unique organizational culture that defines who we are and allows us to establish a challenging, flexible, innovative and respectful environment where our employees come to work motivated and happy. That is perhaps one of the biggest achievements and where we focus our energy every day to continue improving and not conform with what we have already achieved. Wolox is a company created by and for Millennials. A place which seeks to break with tradition, rife with challenge, and where rules are created to be broken in order for continual success.

In the coming years, we plan to continue the immense and rapid growth we have been experiencing up until now- opening new operating centers throughout the country as well as sales offices in various cities around the world. We will continue to train experts in the diverse cutting-edge technologies that emerge such as AR, VR, Internet of Things, among others, to be able to provide the best technological solutions to the problems we encounter within the market industry. In addition, we hope to become key leaders and influencers for the working culture we possess. We believe that we can transform problems into solutions and ideas into quality products, from Argentina to the rest of the world, managing to be positive and happy throughout the journey.

When did Wolox come to Miami, and why? What opportunities are you looking to find here? What risks may you come across? What is the evaluation and product release process in the United States?

As the next logical step in terms of company expansion, Wolox began its operations in Miami in January

of 2016. Our percentage of US clients is constantly growing and we want to continue this growth in the coming years, therefore, we believe opening offices in the United States is the rational next step for the company.

In Miami (and South Florida in general) we saw an interesting opportunity: an expanding entrepreneurial ecosystem, with tremendous support from various institutions and government funding to put Miami on the map of the entrepreneurial world. With the large Latino community many of the bigger enterprises or brands targeting the Latin American market have offices in Miami.

Our biggest challenge now is to manage a high volume of deal flow to maintain our operations during the period of growth of this entrepreneurial community, until it has fully consolidated. We do have to keep in mind we are in a new community and network, with a blank slate, where people still do not know us. We'll have to work hard to achieve a strong reputation and to position ourselves just as we have in Argentina.

Success stories like Magic Leap, Open English, Kairos, among many others have helped encourage and push the creation of tech startups. New co- working spaces are constantly opening their doors, making Miami an attractive spot for companies to set up shop. Miami is a city with immense multicultural and creative talent and a low cost of living. It really has all the key ingredients to make for the ideal entrepreneurial hub. Our goal now is to start generating and executing new startups and to bring capital to risky investments. Wolox arrived in Miami to help entrepreneurs pursue their ideas and build the entrepreneurial ecosystem just like we did in Buenos Aires 5 years ago.

From the perspective of the Latin American entrepreneur, what do you expect as a contribution from Miami?

Miami has access to a far greater pool of investors than we do in Latin America. A seed capital in Miami is at least us$ 500,000 whereas Latin Amércia it rarely exceeds us$ 50,000. On the other hand, it's very strategically located between Latin America and many other entrepreneurial hubs like New York, San Francisco, Boston, Austin, and Los Angeles, where many of our customers reside. Being closer provides an added value to our clients. Miami has many investment funds that focus on this type of enterprise and entrepreneurs of each country in Latin America that can help in this expansion.

As a Latin American entrepreneur, from day one we are constantly thinking globally as our native country itself is usually not a big enough market. Often times the market for our product is in the United States, making it very hard to measure the startup’s early stages from a distance. Even if the market we are appointing to is Latin Amércia as a whole (and not just a particular country) it is a lot easier to access those countries from the USA than from Argentina for example.

From this same perspective, what do you think Miami can do better to become a true "hub" in the region and support entrepreneurs who come here?

Often times, legal and accounting issues end up being a major roadblock when trying to focus one's energy on business. Visa issues/procedure, difficulty in the opening of bank accounts or being unable to access credit are just some of the disadvantages foreign entrepreneurs encounter. To overcome these difficulties, we must be in a privileged position within our country of origin to be able to access the necessary resources. This is something we consider a limitation in attracting top talent.

On the other hand, we must continue to focus on the education and the transmission of entrepreneurial culture. Some of the best practices when carrying out a startup such as energy and entrepreneurial execution speed (which are found in the most important hubs in the region), are  built through education and example. Therefore, it is necessary for the successful entrepreneurs of Miami to stay in order to transmit their learnings and knowledge and channel their entrepreneurial spirit to help and motivate those who are just getting started. Of course, the active participation of organizations - both public and private -that help entrepreneurs to perform this work is a key factor to achieve development.

What is your view on the political and economic situation in Argentina at the moment? What perspective does this experience give you on the growth of Miami?

Argentina is in the process of rebuilding political and economic relations with the United States. They are putting a lot of effort in generating public policies which support entrepreneurs and are strengthening programs and incentives of exchange between the two countries.

For example, only for the year 2016 will the budget allocated to the co- state investment in enterprises by local accelerators, triple. Undoubtedly, this will have a huge impact on the amount of Argentine entrepreneurs who choose Miami as the next step in its expansion process.

It is also expected for there to be at least two new public-private angel investment funds formed, whom will seek to have an active participation from foreign funds. This presents itself as a very interesting opportunity for foreigners: entering the entrepreneurial ecosystem of Argentina with limited risks.

Finally, the Argentine peso is at an exceptionally competitive value for the US market. Making for a very appealing strategy to realize the commercial development of Argentine companies in the USA.

Organizations like Endeavor have talked a lot about the Argentine model (not just the shortcomings, but the great achievements and opportunities). What do you think Miami can learn from Argentina’s case?

I believe Argentines are very entrepreneurial in nature. Things in our country are never simple, predictable or easy. We have overcome several crises throughout our history and from day one we have to address the daily challenges we face in an innovative way. From this, one learns to find solutions to the problem effectively, efficiently, and while working collaboratively.

As entrepreneurs, we have the need to create enterprises with sustainable business models from the get-go, since the ability to raise capital is quite small. I see this as a major difference between the Argentine entrepreneur and the US entrepreneur. Here entrepreneurs sometimes do things thinking only of the next round of investment or how to improve the KPIs the investors are going to ask for, instead of focusing on making a profitable business. Perhaps in the coming years, this paradigm will begin to change if the access to capital becomes more difficult. Which we are beginning to see in some parts of the USA.

In Argentina, there is a very strong sense of community. Entrepreneurs share their experiences, they teach, and invest in and mentor those just getting started. This ‘multiplier effect” is essential for the growth of the entrepreneurial community anywhere around the world and is one of the values ​​promoted strongly by Endeavor in Argentina. I believe this is something interesting and important to try and replicate in Miami. First, identify these stories of success and then take advantage of their transmission of knowledge that can render for following generations.

[This is part 2 of a series. Read part 1 here - Honey vs. Vinegar: How are we luring and keeping the companies we want in Miami?]

Natalia Martinez-Kalinina is the General Manager of CIC Miami and the Founder of Awesome Foundation MIAMI. If you are an Argentine company looking to expand to Miami or a Miami-based entrepreneur/investor looking to connect with the argentine ecosystem, please reach out to Natalia at martinez@cic.us

October 12, 2016

Crowdfunding for all: What it means for entrepreneurs and economy

JasonBest

By Nancy Dahlberg / ndahlberg@miamiherald.com

Sherwood Neiss and Jason Best (pictured above), along with a third partner Zak Cassady-Dorion, spearheaded the writing of crowdfund-investing legislation in the 2012 JOBS Act ratified by President Barack Obama. They have also authored “how-to” guides for entrepreneurs and investors looking to raise money from the crowd and invest in crowdfunded opportunities.

Since regulated crowdfunding was legalized in the United States — the third prong of the crowdfunding legislation that allows many more people to invest went into effect in May — the serial entrepreneurs have continued to champion crowdfunding. Working with governments and stakeholders in Mexico, Colombia, Turkey, Canada and the United Arab Emirates, they are helping to educate the world about harnessing the multibillion-dollar crowdfunding movement. Regulation crowdfunding allows any American startup or small business to raise up to $1 million on debt and equity crowdfunding platforms registered with the Securities and Exchange Commission.

Their company, Crowdfund Capital Advisors, is a partner in the U.S. State Department’s Global Entrepreneurship Program. Neiss and Best have testified in front of the U.S. Congress and presented at South by Southwest in Austin, Texas, the World Economic Forum in New York, the Global Entrepreneurship Forum in Istanbul and the Global Entrepreneurship Summit in Dubai.

In September, Neiss and Best conducted a daylong workshop on crowdfunding at Venture Hive, an entrepreneurship education company in downtown Miami. “The two of them saw this incredible need and have been fighting all of our battles to make it happen,” said Susan Amat, founder of Venture Hive. Venture Hive partnered with Neiss and Best on one of the first accelerated education programs for entrepreneurs navigating crowdfunding.

Neiss1Neiss (pictured here) shared his own war stories about raising money the traditional way for one of his former startups, FLAVORx, when he spent months knocking on rich people’s doors and meeting with venture capitalists around the country. “It’s exhausting, and it totally takes your eye off the ball of your company.”

While crowdfunding can be a far more efficient tech-enabled solution to raising investment funds, Neiss is quick to point out that it’s not for everybody.

“Crowdfunding is not a fishing expedition,” Neiss said at the event. Instead, crowdfunding is raising money from friends, family and followers who are already engaged in what the entrepreneur is doing, he said. “You have to know your crowd.”

Best said he was happy to see that the final regulations contained significant measures aimed at lowering risk, such as income and investment caps and a test on risk tolerance. But make no mistake, he said: equity crowdfunding is a risky business for investors. While the rewards could be rich, the reality is that the majority of startup companies fail.

While donation-based crowdfunding has exploded in popularity, critics of regulated crowdfunding warned of a wild wild west of fraud. Yet, since May 16, when Title III (which opens regulated crowdfunding to the masses) was approved, more than $10 million in capital has been committed to campaigns, most of that into California companies, according to a new index that CCA publishes on its website, crowdfundcapitaladvisors.com. About a third of the 120 offerings so far have been funded. So far, the process has been slow and measured, Neiss said.

Here are excerpts of history, best practices and tips for success that Neiss and Best shared with workshop participants and in follow-up questions from the Miami Herald.

When most people think of crowdfunding, they think of Kickstarter, but you saw this as just the beginning. How did you get started?

Kickstarter and Indiegogo (unregulated, donation-based crowdfunding) can be incredibly powerful if you have a prototype. You can test the market and see if there is truly a customer for your product, as well as raise money to produce your product. As the product is up there, people are giving you valuable feedback, and you can use that product validation to go to retailers to sell your product.

The opportunity we saw was to create crowdfund investing not just for consumer products you can pre-sell through Indiegogo, but maybe you have a B2B startup or a traditional business and you need to expand your operations. In August of 2010, we asked ourselves, “If you can give away money on Kickstarter and lend money to entrepreneurs in developing companies via Kiva, why can’t you invest in businesses with products you use everyday?” That was the jumping-off point for us.

But setting out to change securities laws that haven’t changed in 80 years … takes equal parts stupidity and naivete, which we brought loads of to this process to make change. In 2011, we created the Startup Exemption Framework and began walking the halls of Congress and talking to anyone who would listen. … By opening the opportunity for regular Americans to invest in businesses that they know and trust, this could help spark job creation, innovation and American entrepreneurship. … In 2012 we were in the Rose Garden when President Obama signed the JOBS Act into law. It was a surreal moment.

Fast-forward, and in 2014 Title II of the JOBS Act went into effect. In 2015, Title IV, and in May of this year, Title III went into effect. In August, our firm launched an index that tracks crowdfunding on a day-to-day basis. We and Venture Hive are looking at the data results over time to continue to hone and build best practices. Now we are working with 37 countries around the world to change regulation in other countries, we are working with fin-tech companies in the industry, and we are investing in tech companies that are building this infrastructure.

What are the differences between the three crowdfunding JOBS Act titles?

Briefly, Title II provides the ability to raise money from accredited investors or wealthy individuals. Instead of having to know someone to know someone, I can go to one of these platforms. It saves the entrepreneur time, energy and money, cuts down on the funding cycle and brings the process online. … It can be appropriate for tech startups looking for connected investors.

Title IV, also called the Reg A-Plus, offers the ability for companies to raise up to $50 million, from accredited and non-accredited investors, but the documentation costs are substantial. It is more appropriate for large, sophisticated companies, such as a regional brand looking to expand nationally. … It allows for what is essentially a mini-IPO … But the reality is that most companies aren’t ready to do Reg A-Plus offerings, and the majority of them fail.

Title III offers the opportunity for regular investors to invest in companies they use every day or entrepreneurs they believe in. There are limits to how much you can invest, per investment and per year. Those are put into place to help people understand these are high-risk investments … but they also give you the ability to invest in those deals and participate in making the economy grow.

Crowdfunding can make entrepreneurs better entrepreneurs because it trains them early on on what investors need to make an informed decision. If they do it right, they get the capital that they need from the people that they know.

What are some tips for creating a successful campaign, whether it’s donation-based, such as Kickstarter, or a campaign seeking investments in exchange for a stake in the company?

Look for 10 successful campaigns that were similar to yours. What platforms were they using? How did they tell their story successfully? It’s also important to look at a few that failed. Understand where they fell short and what you can do to not repeat their mistakes. Call up the founders; you will be surprised how open they can be.

Your campaign video is incredibly important. "Watch a lot of videos to see what has been successful and what has not.

Your video is your front door to your offering. It doesn’t have to be expensive, but it has to look good. Plan 12 hours for filming that two- to three-minute video. No matter how well you think you know your business or opportunity, write a script. Take your time to get it right.

Before a campaign starts and you are setting up the campaign page, begin establishing media contacts. You want to have a big first couple of days. Share your campaign before it is live; that is the way you get PR.

You need to bring your own crowd to your crowdfund. Most of your investors will likely be LinkedIn connections, people you already have a relationship with. You have to be able to connect with them emotionally so they understand what you are trying to achieve. Customer service is important, too. Your crowd already feels connected, so you need to spend the time answering their questions, listening to their suggestions, etc.

If things go wrong, and they will … get out in front of the issue and communicate openly and honestly with your crowd about what went wrong, how it went wrong and what you are doing to mitigate the problem.

Crowds often contain “smart money,” or investors with experience or connections that may be able to help you. Always communicate early and often with your crowd.

You talk a lot about post-campaign. What is some advice on that?

It’s really important to satisfy your first customers. They will be your brand ambassadors, and they will give you critical feedback.

Post-campaign, thank your supporters. Then communicate how you will communicate with them — is it emails, a LinkedIn group, Twitter? They need to understand how they can track your progress. You can use video, audio and photographs in your updates to them. You just raised money for your business, and you will need to raise more and build your crowd out over time.

Engage your crowd and you can can return to them over time, whether it’s for money or their expertise or their feedback.

What happens if your campaign doesn’t make it over the finish line?

First, thank those people who supported you. Then look at the campaign and the product or service or company and what you were trying to build. One of the the magical things about crowdfunding is the opportunity to understand what your product market fit is before you build thousands of products and try to scale a business. It may be that that product that you fell in love with, that you thought would hit its target, didn’t quite do that. Or maybe it just needs a tweak or a pivot.

Should you try again? The answer is maybe. Look at it to see if there’s a tweak or pivot, or it might be time to move on.

What are some other benefits?

We’ve worked with many different entrepreneurs around the world. In addition to learning a lot, they have gained press exposure, they made long-term business partnerships, found other types of investors over time, and they have found new customers.

What does the data you are tracking show about how equity crowdfunding has gone so far?

About $10 million has been committed to regulation crowdfunding campaigns since it launched May 16. Based on the number of offerings going live each week and the growth of investor commitments, we estimate by the end of the first year, May 2017, $100 million in capital commitments will be made. We think this represents a logical start to the industry. It shows that investors are being methodical with how they deploy capital and that companies, that otherwise wouldn’t qualify for bank financing or hit the sweet spot of Angels or VCs, are finding capital from engaged communities.

What are some key trends you are seeing in the early campaigns?

Looking at all the campaigns, you can tell that those that have well-produced videos — that include the entrepreneur and discuss the market opportunity and how they will use the proceeds — get funded over campaigns that just show videos that explain the product or service.

The data also show early signals that regulation crowdfunding is living up to its expectation that it will help main street businesses that don’t qualify for traditional financing. Those companies that have realistic valuations are getting funded three-times faster than companies that have set unrealistic valuations for their firms. And companies that have robust disclosures are getting funded over those whose disclosures seem almost whimsical.

Nancy Dahlberg: 305-376-3595, @ndahlberg

Read more Q&As

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August 15, 2016

Q&A with Loren Ridenger: Changing the face of beauty

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By Nancy Dahlberg / ndahlberg@miamiherald.com

Loren Ridinger has been changing the face of the beauty business as well as internet shopping for more than 20 years, and the entrepreneur and senior executive has no plans to slow down. “It’s not in my blood,” she says.

With humble beginnings working out of their rental home’s garage at the time, she and her husband, JR, co-founded internet retailing giant Market America in 1992, in Greensboro, North Carolina, where the company is still headquartered. Earlier this month, the company held one of its twice yearly empowerment conferences there, hosting 25,000 people, and she gave the opening speech. Today, the Ridingers live in Miami Beach, and each February, the Market America World Conference takes over AmericanAirlines Arena in Miami, bringing about 25,000 people to town.

Market America | Shop.com has generated more than $5.5 billion in accumulated retail sales and individuals have earned more than $2.9 billion in commissions and retail profits, the company said. In addition to the U.S., the company operates in Canada, Mexico, Australia, Hong Kong, Taiwan, the United Kingdom, Singapore, Mexico and Spain.

Ridinger also founded the award-winning cosmetics line Motives, her first line. She also created the solution-oriented personal care line Fixx and the jewelry collection Loren Jewels. Her daughter Amber is also an entrepreneur, having created DNA Miracles, a line of body and wellness products designed for babies, children and expectant mothers. Loren speaks about entrepreneurship regularly and has mentored young entrepreneurs. Last year, she partnered with Miami Beach startup Flat Out of Heels to create a line of shoes for the young fashion company.

Active on social media, Ridinger blogs regularly on www.LorensWorld.com, named one of Forbes’ Top 100 websites for women, and her fashion blog, www.MyFashionCents.com, often speaking about inspiration and women’s empowerment. “I use my voice wherever I can to make a difference,” she says. “The message cannot be heard enough. Sometimes thousands of people have to read for one of them to get it, but if one of them gets it, that’s all that matters, right?”

Loren Ridinger, senior executive vice president of Market America, serial entrepreneur, fashionista, mentor, mom and grandmother with a third grandchild on the way, surrounds herself with successful people and those who want to be. She calls Jennifer Lopez and Eva Longoria good friends. Still, Ridinger is a self-described private person, who puts socializing at the bottom of her priority list as she manages her many ventures and adventures.

She took time out this month to share her views about Market America, entrepreneurship, what’s next and the importance of knowing your “why.” Here are excerpts of that conversation.

Continue reading "Q&A with Loren Ridenger: Changing the face of beauty" »

June 05, 2016

Q&A with EcoTech Visions’ Pandwe Gibson: Going green from ground up

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EcoTech Visions team, from left: Tamara Wendt, director of sales and manufacturing, Pandwe Gibson, CEO, executive director and Justin Knight, director of marketing, at their new facility, 670 NW 113th St. in Miami, for green manufacturing companies that is still under construction. PEDRO PORTAL 

 

When Pandwe Gibson set out to build EcoTech Visions, an incubator for green manufacturing businesses, she had no team, no funding and no space. Three years ago it was only a big vision that lived on her iPad, which she shared with anyone she could get to listen.

What was the vision? EcoTech would help “ecopreneurs” in its incubator launch and grow, including connecting them with grants and other resources. EcoTech would also hold programming such as coding courses, green internship programs and fellowships to help prepare the workforce in underserved communities to transition from blue collar to “green collar” jobs.

Gibson wasted no time bringing her big idea to life.

By the end of 2014, and after knocking on many doors and winning initial Miami-Dade County and Community Redevelopment Agency funding, Gibson moved EcoTech into its first location, a small space west of Interstate 95 with communal office space and a community garden, and with a handful of incubator companies she had already begun working with. Although the building had no space for manufacturing, a key goal of Gibson’s, it served as a minimal viable product. A few months later, EcoTech secured some additional office and classroom space in another Liberty City building, which allowed the company to expand its programming. The EcoTech team began forming, and EcoTech began attracting more green companies.

Last month, EcoTech Visions began partially moving into its new Miami headquarters space it leased to own at 670 NW 113th St., in the newly designated “green corridor.” Upon buildout, plans call for the building to provide 24,000 to 25,000 square feet of multilevel co-working space, offices, event space, maker space and manufacturing facilities. EcoTech will also use its Liberty City space during buildout.

Today, 26 companies are members of EcoTech (ecotechvisions.com), and the EcoTech team now numbers seven.

EcoTech Visions recently announced the launch of Digital Citizen, a technology boot camp that aims to provide real-world technology programs and entrepreneurship training to local underserved communities, funded by $200,000 from the Knight Foundation. The first cohort will begin June 20 and will run for eight weeks in the evenings at D.A. Dorsey Technical College in Liberty City. Applications for the boot camp are being accepted at etvfoundation.org/digitalcitizen.

“This program is desperately needed not only to fill the tech staffing gap but also to combat the economic hardships and growing income gap in inner-city Miami,” Gibson, CEO "of EcoTech, said in announcing the launch and funding. “We all succeed when the best and most diverse solutions are brought to the table.”

Since its founding, EcoTech has created 15 new jobs and more than 300 students graduated from EcoTech Visions workshops and certification programs, Gibson said. It has secured $10,000 start"up prototyping grants for nine incubator companies and assisted in securing seed loans for three of its ecopreneurs, Gibson said. It was named 2016 Entrepreneur of the Year by the Beacon Council, among other honors.

By the end of the year, Gibson hopes to see buildout of its headquarters get under way and be completed in one year. Plans include an urban vertical garden across the entire front of the warehouse-style building, space for creating prototypes and light manufacturing as well as co-working and a rooftop cafe.

Appropriately, the building is planned to be entirely powered by solar energy.

“Our goal is to have a net-zero-energy building,” said Tamara Wendt, EcoTech’s director of sales and manufacturing, explaining that there is currently only one other much smaller net-zero building in Miami. “Presently, we have on-site office space and will be holding events here. We expect to have our injection-molding equipment installed by early July and will move into production, warehousing and fulfillment.”

The Miami Herald toured the new EcoTech location last month and sat down with Pandwe Gibson to discuss EcoTech Visions and what’s ahead for the company.

Q: What’s your mission for EcoTech?

A: Our mission is to create opportunities for businesses to grow and to bring green manufacturing jobs to Miami.

Q: What does success look like to you?

A: In the next two years, to have at least five breakout companies. That sounds very ambitious, doesn’t it? But we already have some companies pursuing multimillion-dollar contracts, and when we start seeing the production actually occurring from here, that is very exciting.

The first year [in this building], we will be in massive construction, but we are starting with injection molding and I think we can make a lot of progress in the beginning with that one vertical. We provide the equipment, and there are a lot of businesses that have different molds and prototypes we can help. We plan to have two different machines.

Q: How are you funding all this?

A: We have private funding and public funding. We just completed a seed round of half a million dollars. We have public funding from Miami-Dade County and the CRA totaling about half a million and are pursuing more grants from the county. We recently found out we received a grant from the Knight Foundation. It’s a combination.

Q: Is EcoTech a for-profit or a nonprofit?

A: We have two arms. The for-profit is the maker space, the physical space that you are in, and the services associated with the production equipment. … The nonprofit really focuses on helping to facilitate training, the programs we administer.

Some of those programs are coding education boot camps and a green manufacturing internship program. These programs help prepare the community and workforce for careers in green manufacturing.

Q: Tell me about a few of your incubator companies.

A: Geeks Global is an internet services provider and sustainability-focused technology consultant. Darrell Russell and his team help greenify businesses by using technology like LED lighting, windmill-powered Wi-Fi towers and other innovations. Make The Homeless Smile Miami is an organization started and led by powerhouse community activist Valencia Gunder. They transition homeless Miami residents off the streets and into self-sustained lives. HBCNS LLC, run by Dawn Davis, is a distributor of water-based, biodegradable, protective coatings including the nation’s only non-slip coating. It’s main product is called Strong Seal. (All three entrepreneurs are pictured below with Gibson)

Earthware, led by Michael Caballero, is a producer of compostable cutlery, cups and containers for a better world. The company is committed to the restoration and preservation of our planet by replacing landfill-destined products with 100 percent compostable, tree-free products.

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Q: What do you do for member companies?

A: You can do prototyping here, you can have office space here, you can hold events here, you can run your company here, prototyping and distribution — it’s a one-stop shop and it is sorely needed in Miami.

Q: Explain what the “green corridor” designation is and what it can do for the neighborhood where EcoTech is?

A: The Green Corridor was created by proclamation by the Miami-Dade County Commission and stretches along Northwest Seventh Avenue from 79th Street to 119th Street. It is the first green corridor of its kind in the United States created with the purpose of establishing a citywide, countywide, statewide and regional hub of sustainable and environmentally friendly businesses. The Green Corridor and EcoTech Visions promote economic opportunity for the community where they sit and far beyond.

Q: Where do you see EcoTech in five years?

A: In five years, we want to start multiplying. We want to be in other communities, such as Los Angeles. When you look at the two markets, Miami and L.A., there are a lot of similarities. We are already forging relationships there. California is probably the largest green-tech community in the country. Connecting the two will help infuse vitality and innovation into Miami and help move us as a country into a really great space in green technology.

Q: What is your vision for the vertical garden covering the front of the building?

A: Ted Caplow, of CappSci and Miami Science Barge, is designing a game-changing vertical farm based on work by his company, BrightFarms Inc., which creates hydroponic farms for Whole Foods amongst other clients. The vertical farm will be a hydroponic system to grow organic produce inside a glass and screened-in enclosure on the façade of EcoTech Visions’ new building located at 670 NW 113th St. Installation and ongoing maintenance and production will be managed by Urban Green Works working with marginalized resources including women recently exiting incarceration. In addition, an aquaponics system will be incorporated by Fruit of Life Organics, one of our incubator companies, to grow organic fish and produce in one system that recreates the natural water cycle.

Q: There are even plans for a rooftop café?

A: Yes, and we will serve food from our vertical garden.

Q: What’s next for EcoTech?

A: We’re taking applications to fill out our pipeline of companies, educating people on the opportunities in green technology, and educating entrepreneurs on what is available in terms of funding so they can succeed by being clean and green.

Nancy Dahlberg; 305-376-3595; @ndahlberg

Read more entrepreneurship Q&As on this blog by going to the Q&A category.

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from left, EcoTech Visions'  staff Carlos Vazquez, Kenyona Pierre, Marisabel Lavastida, CEO Pandwe Gibson, Tamara Wendt and Justin Knight, at their new facility, 670 NW 113th St. in Miami, under construction. PEDRO PORTAL pportal@miamiherald.com



 

March 04, 2016

Q&A with Melissa Krinzman: Homegrown venture fund gets running start

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By Nancy Dahlberg / ndahlberg@miamiherald.com

A number of early-stage investors are just beginning to dip their toes in the Miami startup market, meeting entrepreneurs and mulling over a few deals. But in just two years, one fund jumped right in and created quite a splash.

Already one of the most active early-stage funds operating in South Florida, Krillion Ventures is a $50 million homegrown venture fund founded by two longtime Miami investor/entrepreneurs. Jeffrey Miller is a prominent South Florida business and civic leader. He has been an active investor for nearly 30 years, with most of his holdings in the real estate, banking and energy sectors. Entrepreneurship is in the Miller DNA: His father, Leonard Miller, took Lennar public; today it is a Fortune 500 company and one of the nation’s leading homebuilders. Melissa Krinzman has a 20-year history of launching, growing and advising private companies and nonprofit organizations. She has been active in the entrepreneurship community as a speaker on capital raising and a judge of business plan competitions across the country, including the Miami Herald’s Business Plan Challenge.

“Krillion was born out of a desire to make South Florida an even better place to live and work,” Krinzman said. She met Miller more than four years ago through the Ransom Everglades School: He was chairman of the board of trustees, she was on the alumni board. “We were both Miami natives, career entrepreneurs, had experience growing businesses as well as nonprofit organizations, and shared a common vision about the importance of access to quality education for all children,” she said.

After many discussions about the imminent growth of South Florida’s tech sector and the corresponding need for active “hometown” early stage venture funds to support these nascent companies, they joined forces in January 2014 as managing partners to launch Krillion Ventures (www.krillionventures.com). They picked up the pace significantly in 2015 and closed the year with a total of 17 investments, including an equity crowdfunding platform for startups, an electric scooter-sharing company and a startup aiming to make it easier for consumers and businesses to use digital currencies.

Today, the firm actively invests in financial services, transportation, logistics, real estate and healthcare startups, and has developed a “Miami First” strategy. Eight of its 17 investments are from South Florida.

“We believe that local investors have an exciting opportunity as well as a responsibility to invest in and support South Florida’s next wave of high growth companies that will contribute to more and better local jobs and talent retention,” she said.

Still, Krinzman sees a potentially nasty venture slowdown ahead and believes entrepreneurs need to batten down. The Miami Herald talked to Krinzman about the firm’s first years and plans for the road ahead.

Why a ‘Miami-first’ and not a ‘Miami-only’ focus?

Like all venture capital funds, our primary goal is to earn a return on our investment. We call ourselves a “Miami-first” fund because we prioritize the review of and investment in opportunities in South Florida. Within two years, we have made eight investments in South Florida-based startups, which is approximately half of our portfolio. We have also made investments in early stage companies located in cities such as New York City, Boston and San Francisco. The relationships we make and insights we gain from these investments help our Miami entrepreneurs, and vice versa.

Why have you selected the verticals you have?

For the first two years, we decided not to focus on any verticals. We wanted to cast a wide net and see where it would lead us. This is evidenced by the diversity of our current portfolio. But at the end of 2015, we decided to take a note from New York City’s tech sector. In my role as founder and managing director of Venture Architects, a firm dedicated to helping startups raise investment capital, I saw that the New York-based companies that gained the most traction were the ones innovating in the verticals that New York dominated such as advertising, marketing, financial services and fashion.

So, after a rigorous analysis, we selected five focus areas in which we believe Miami has innate strength — financial services, real estate, health, transportation and logistics — and where we can provide value beyond our dollars invested. Moving forward, our investments will primarily fall into these categories.

What stage do you invest in?

We are making initial seed stage investments from $50,000 to $250,000. Once the company shows traction, we’ll then provide additional investment capital through their Series A, on a deal-by-deal basis. We prefer to be active investors and often take advisory board or director seats.

A differentiator is your nonprofit strategy. How did that develop?

In addition to supporting South Florida entrepreneurs and the overarching technology community, we are also committed to local education and civic initiatives. We believe that one can’t thrive without the other. For example, independent of Krillion, in September 2014, Jeffrey and I were part of the team that opened Beacon College Prep, a nonprofit charter school located in Opa-locka with 240 students in K-3, focused on developing college-bound students. Additionally, Jeffrey is chairman of the board of Breakthrough Miami and supports many cultural, educational and community organizations. And in a few weeks, Krillion will host an event for local investors and entrepreneurs to learn about The Miami Foundation’s leadership agenda, which is looking to the future and addressing transportation congestion, sea level rise and the need for more public spaces — all issues that impact the quality of life for South Florida’s current and future entrepreneurs.

What attributes do you look for in founders?

As we say on our website, we are seeking “one in a krillion.” We review both referred and unsolicited pitch decks from all over the country and hold office hours once a month to meet with local entrepreneurs. Thus far, we have backed entrepreneurs who believe passionately in their goals to solve a problem but who, at the same time, are willing to learn and be flexible. We believe that passion, tenacity and fearlessness are essential. But if not mixed with the ability to accept and process feedback, we’ve seen these three attributes quickly become negatives. We’ve also found that the entrepreneurs who have taken the time to educate themselves about the process and the etiquette of raising capital are the ones who shine.

Please tell us about a couple of your most recent investments. What attracted you to them?

Our two most recent investments were made in December 2015 and both are Miami-based companies — MealPass and Sktchy.

Mealpass is co-founded by Mary Biggins, one of the founders of ClassPass, a membership program for fitness classes across multiple gyms and studios that has raised $84 million from prominent venture funds.

For a flat fee of $99 a month, members can choose to eat lunch at one of over 50 restaurants each day. MealPass launched in Brickell in January and in downtown Boston earlier this month. From the moment Mary started to walk us through her business model, it was clear that she was a seasoned entrepreneur, highly analytical, and extremely focused and hardworking. We also liked that MealPass has a subscription business model and offers a significant cost savings to budget-conscious office workers.

Sktchy, founded by Jordan Melnick, is an app where users submit photos of themselves for inspiration and artists draw, paint or sculpt portraits. The before-and-afters can be discovered and shared on the app. With Jordan, it was clear that he had a deep understanding and connection with his audience and a steadfast vision for Sktchy. We immediately saw the simplicity, usefulness and addictiveness of the app, as well as the significant opportunity to provide a marketplace for these talented artists to sell their sketches. We believe the company is poised for exponential growth and can’t wait for the marketplace to launch in March so that the sketches can be purchased from the talented community of artists.

What keeps you up at night?

The venture investing and valuations have recently begun to lose velocity, a repeat of 2000 and 2008, when the venture market slowed to a crawl. In my mind, the only question is, how long will this one last? Having experienced both of the downturns up close and personal, it wasn’t pretty. But most local entrepreneurs that I have spoken with haven’t even begun to think about gathering the hurricane supplies that they’ll need to wait out the storm.

Investors are already putting on their battle gear. Those who have horses in the race are running the numbers to figure out which ones they are going to bet on and which are being released into the pasture. And they have already slowed down their decision-making and will wait out the storm in order to acquire new investments at attractive valuations.

On the other hand, optimists by nature, I haven’t seen many entrepreneurs suiting up. Our advice to entrepreneurs is to educate themselves about the past two market downturns by reading the recent articles by investors and entrepreneurs who survived them, revise their game plans and pro-actively cut costs to make sure their businesses will continue to thrive during the lean times ahead.

In general, how would you characterize the deal flow you have seen from South Florida?

Drawing from a broad and diverse gene pool, it is not surprising to us that potential deals in South Florida come in all sizes, shapes, colors and patterns. And we’ve seen a steady increase in the pure number of South Florida-based companies that are seeking investment capital. From our perspective, both are very good things.

Nancy Dahlberg; 305-376-3595; @ndahlberg

Melissa Krinzman

Investor: Managing partner of Krillion Ventures, a $50 million Miami-based early stage venture capital firm that actively invests in financial services, transportation, logistics, real estate and healthcare startups.

Business planning: Krinzman also founded Venture Architects, a business planning firm that has positioned early and growth stage companies for success in the capital-raising process since 1998.

Previous experience: Part of founding teams for three prominent, national nonprofit organizations.

Board appointments: Vice chairwoman of the board of The Miami Foundation as well as a board member of Beacon College Prep and the Ransom Everglades School Alumni Board. She also serves as a board member or adviser for a number of Krillion Ventures' investments.

Education: Bachelor’s degree in English and American studies from Tufts University.

Three most recent books read: When Breath Becomes Air by Paul Kalanithi; The Most Important Thing Illuminated: Uncommon Sense for the Thoughtful Investor by Howard Marks; and The Prize: Who's in Charge of America's Schools? by Dale Russakoff.

More about Krillion Ventures: KrillionVentures.com.

September 30, 2015

Q&A on SBDC at FIU's first 20 months: 900 entrepreneurs served, and counting ...

By Nancy Dahlberg / ndahlberg@miamiherald.com

Since early 2014, the Florida Small Business Development Center at Florida International University has helped more than 900 South Florida entrepreneurs. The SBDC’s services are free and available to the community.

Jacqueline_Bueno Sousa_TORSO SHOTJacqueline Bueno Sousa, the program’s founding regional director, said SBDC at FIU looked at the landscape and needs in Miami-Dade County’s entrepreneurial community so that the services it offered would be value added. It settled on focusing on scalable existing businesses as well as startups, and particularly ones with global ambitions. In fact, one program it is starting later this year will focus on helping young companies go global from day one as well as helping existing companies reach new markets. “We have a focus on helping our companies grow globally because we think that is a game changer in terms of the local economy,” Sousa said.

SBDC specializes in offering entrepreneurs one-on-one counseling, and in many cases entrepreneurs get access to a team of SBDC consultants who specialize in different areas, such as finance, distribution, government contracting or marketing, Sousa said. The office, with 14 consultants, also has held a number of training programs and workshops in partnership with FIU’s Pino Global Entrepreneurship Center and IronHack coding school.

SBDC at FIU (sbdc.fiu.edu) is part of a statewide network that includes offices in Broward, Palm Beach and Monroe counties and is funded by the U.S. Small Business Administration, the state of Florida and other public and private partners. SBDC at FIU is also supported by FIU’s College of Business, where the office is based, and private funding.

The Miami Herald talked with Sousa about the SBDC at FIU’s first 20 months and what’s ahead.

Q. What is your one-liner for SBDC?

A. SBDC at FIU helps businesses grow and succeed.

Q. What services do you offer a small business?

A. We have a team of highly experienced business consultants who work one-on-one with small- and medium-size businesses to help them succeed. We have experts in finance, marketing, international business development, contracting, HR — all the major areas in which businesses experience growth challenges.

Continue reading "Q&A on SBDC at FIU's first 20 months: 900 entrepreneurs served, and counting ... " »

August 02, 2015

Q&A with Robert Hacker: On scaling social entrepreneurship, finding partners, thinking big

By Nancy Dahlberg / ndahlberg@miamiherald.com

Hacker picRobert H. Hacker often advises entrepreneurs to go after the “big opportunity.” The same advice holds true for social ventures, and he’s written a new book on it, Scaling Social Entrepreneurship: Lessons Learned from One Laptop per Child, available in  paperback and Kindle versions on Amazon.

Hacker, who teaches social entrepreneurship courses at FIU’s Honors College and MIT’s Sloan School, spent 3 1/2 years as CFO of One Laptop Per Child, an organization with a mission to provide every child in the developing world with a connected laptop. Big opportunity, scaled globally. How did the organization do it? One key was by successfully creating the worldwide 1:1 computing for children movement early on, Hacker says.

While improved education worldwide and corporations committing a sliver of their profits would go a long way toward solving the world’s biggest humanitarian problems, Hacker says, the for-profit entrepreneurship model is built for scaling social ventures. Just as with entrepreneurship without the “social” modifier, tackling large, worldwide problems is more effective than tackling smaller problems and you can achieve efficiencies of scale.

Final Cover SSEHow big is the opportunity? The population of the developing world will reach 4 billion by start of the 22nd century and the population of the world’s least developed countries will total another 3 billion people –- a nearly three-fold increase from this century, Hacker writes in the book.  In the book that is well-researched and rich in examples, Hacker, who spent 20 years working in Asia and Latin America and is also the author of Billion Dollar Company, explains ways to scale social entrepreneurial ventures in light of their unique challenges such as lower operating returns and less startup capital.

Hacker, who also manages the GH Capital consultancy and writes the Sophisticated Finance blog, talked with the Miami Herald about his views and work in social entrepreneurship.

Q. Why do you think the private sector can do a better job on social problems than government and non-profits?

A. The private sector represents a better option to solve social problems because they have better access to capital and a history of innovating to solve customer problems. However, now customers expect their brands to be genuinely involved in solving social problems. The private sector now finds it to be in their self-interest to solve the problems if they want to maintain their customer loyalty.

Q. Why do you think that the morality (or lack thereof) of capitalism is a theme that never goes away?

A. The question never goes away because the critics make their case better than the capitalists. But as I quote in the book, The Economist estimates that approximately one billion people escaped poverty in the twenty-year period ending in 2010 through the benefits of capitalism. That fact, and the progress it represents, is hard to legitimately challenge.

Q. Who do you think is the best example of social entrepreneurship today?

A. Toms Shoes. Toms Shoes  has successfully grown a company that is committed to both shareholder returns and social engagement at scale. Its recent private equity investment demonstrates that professional investors see no conflict between the social mission and future financial returns. 

Q. What is the key to scaling social entrepreneurship?

 A. The most important key to scaling social entrepreneurship is not capital or partners but rather to plan from the very beginning to achieve scale.

 Social entrepreneurship by definition has lower financial returns, which means such organizations generate less cash internally. Therefore, these organizations have less ability to iterate on business model due to lower cash reserves. They need to execute well right from the beginning, which requires very careful business model development and planning.

Q. What was the key to OLPC's early success?

A. OLPC's early success is attributable to its achieving the status of a movement, a worldwide movement. Nicholas Negroponte created a learning movement for 1:1 computing for children worldwide. While it might appear a daunting task, I would point out that a young girl from Pakistan, Malala Yousafzai was also able to create a worldwide movement. 

Q. What are three takeaways from your book?

A. Choose for-profit status for a social entrepreneurship project because it gives you better access to capital.

Partner with the private sector because they have the resources and can be motivated to support social projects.

Solve one social problem well and let others solve the myriad of other problems.

Q. Where do you see social entrepreneurship in South Florida?

A. Social entrepreneurship is in its infancy in South Florida but also worldwide. Many people are still not familiar with the concept despite the example of Muhammad Yunus of Grameen Bank and the teachings of CK Prahalad who coined the phrase "the fortune at the bottom of the pyramid." However, the Honors College at FIU and the University of Miami Business School have active programs to introduce and facilitate student involvement in social entrepreneurship. These efforts, combined with community support from Knight Foundation, the Center for Social Change and EcoTech Vision to name a few, will increase awareness of social entrepreneurship and generate positive results in the community.

Follow @ndahlberg on Twitter.

July 26, 2015

Q&A with Nico Berardi: Connecting startups with investors

By Nancy Dahlberg / ndahlberg@miamiherald.com

56 BM Q&A Nico Berardi 0624Accelerated Growth Partners, a Miami-based angel investment group, relaunched a little over a year ago with a couple of key goals: to expand its network of active angel investors to help bridge the funding gap in South Florida and launch investor-education workshops aimed at broadening the pool of investors interested in early-stage ventures.

With funding from the John S. and James L. Knight Foundation, the organization began meeting and Nico Berardi was chosen to lead the effort, acting as the connector between entrepreneurs and prospective investors. Berardi, AGP’s managing director, is the former U.S. CEO for TECHO, a nonprofit that mobilizes youth volunteers to fight extreme poverty in Latin America. Under his watch, the organization expanded and fund-raising doubled.

In a short time, Berardi’s track record at AGP has been impressive, too.

AGP Miami (agpmiami.com) was not a new organization when Berardi took over, but it had slowed down considerably. The group invites entrepreneurs seeking funding to pitch their businesses, and members can decide individually whether to fund them. Since Berardi took over, membership has quadrupled to more than 80, and more significantly, members have invested in nine South Florida startups. It’s now the largest local angel group.

“We sent out a survey to all our members, and what came across the strongest was the co-investor intellectual horsepower. The group represents so many industries, there is likely someone in the group that knows the particular space. We have seen really good deal flow, and our members are engaged. At each of our pitch meetings, we have had 50-plus of our members show up,” said Berardi.

Berardi meets with roughly 450 startups a year and sends the most qualified startups through the AGP screening process. The screening committee will then decide whether they will present to the AGP membership, typically with one member championing the investment. One startup company, ClassWallet, has been funded twice. The other companies receiving funding in year one of the relaunch were: Everypost, Weebee, Videoo, Blackdove, Stadson, Hair Construction, Waleteros and Nearpod.

“Because we are an up-and-coming ecosystem, a lot of our entrepreneurs don’t understand how to work with investors, and a lot of investors don’t know how to work with entrepreneurs. That is something we can work on,” Berardi said. “The entrepreneurial team brings an entire skillset, and we bring capital and experience. Most of the time, you need both.”

To be sure, startup funding is often cited as a key missing ingredient as Miami works to build up its entrepreneurial ecosystem. While there is plenty of wealth here and family offices proliferate, the money is typically not going into technology plays and local startups.

To help begin to fill that ecosystem need and make sure AGP has a growing roster of active investors to fund more companies, as well as double down on existing investments, Berardi and the Knight Foundation, together with partners such as Northwestern’s "Kellogg School and Greenberg Traurig, launched a series of workshops this year to train potential investors.

“This was an experiment. We said, ‘Let’s start shooting information,’" space="1"” said Berardi. Each of the six educational sessions were themed and led by experts in those areas. The result: standing-room-only workshops. “People were thrilled to get the content. Now we are talking about the second cycle. Is this going to move the needle, and are we going to have 100 new investors? We don’t know yet.”

This summer, Berardi was chosen to join Class 20 of the Kauffman Fellowship, 40 emerging leaders of venture capital and angel investing organizations from around the world that will meet regularly to learn about investing and leading capital ecosystems. The Fellowship’s goal is to develop a worldwide network of innovation investors who provide smart, connected capital to fuel entrepreneurial change, and Berardi is excited about bringing back what he learns to Miami. “The better investors we can be, the better we think we can help our companies,” Berardi said.

The Miami Herald spoke with Berardi recently about AGP’s first year and what is ahead.

Q. AGP relaunched just over a year ago. What were some of the highlights of the year?

A. The highlight was to realize how much a friendly platform to connect entrepreneurs to investors in an efficient way was needed. We made 10 investments into nine companies totaling $1.8 million. Membership stands at over 80 investors.

Q. What will be your metrics for success in year two?

A. Deal flow is king. As long as we keep on finding really interesting companies being built from or moving to Miami, we will continue to be active. We aim to make 8 to 10 investments per year.

Q. Do you think the quality of deal flow will continue?

A. We’re very optimistic because of all the new things coming to town. Existing institutions like the Venture Hive and Endeavor in town continue to do good work, while many others are drawing up plans to open shop. Large conferences like eMerge Americas and SIME bring a lot of attention, which then attracts entrepreneurs and organizations. The large tech firms are also paying attention; Twitter opening its new Brickell office is a key example. Infrastructure is becoming more robust, too — service providers are tailoring their offerings, coding schools are growing, and co-working spaces have proliferated. It is the combination of all these things that make us very optimistic.

Q. What kind of companies do you look for to potentially take to the members, if they make it past the screening process?

A. We have a strong preference to invest in South Florida-based companies. In fact, all nine companies we have invested in have key strategic operations here. From a stage perspective, we look for companies raising between $250,000 and $1.5 million that are in the market already. We usually steer away from beta, prototype, pre-launch companies. In a way, we come in after friends and family and accelerators but before an institutional Series A. Once a company fits within that sweet spot, we look for a combination of really big markets or attractive vertical niches and outstanding management teams.

Q. Tell me about a couple of the companies that got funding?

A. ClassWallet is an exciting company at the intersection of fintech and edtech. Today, in the U.S. alone, there are $23 billion worth of cash transactions that occur in K-12 classrooms every year! With cash, there is no accountability, no transparency and is very time-consuming from an administrative standpoint.

NearPod is also in education. They identified that smart devices took the classroom by storm, and today they represent a learning barrier for teachers to overcome. Their technology empowers teachers to create and deliver content that leverages those same incredible devices. Their platform is bringing the learning experience to the 21st century.

Q. What advice do you have for entrepreneurs seeking investment from AGP?

A. Don’t think about building a fundable company. Focus on one thing and one thing only: building an amazing product that your customers will love. That is what will draw our attention.

Q. Why did AGP launch an angel educational program?

A. The local community of investors has not been exposed to early-stage tech investments enough. Historically, it has been mostly real estate, public securities and a bit of private equity. While we have some of the smartest investors in the world in those areas, they are very different from investors in tech. Our hypothesis was that not many people were investing in tech because they lacked the know-how to do so. The premise then was that by educating the community more, people would get involved by understanding that tech is a great way to diversify your portfolio. We wanted to solve that problem by educating the community to leverage their intellectual horsepower with the financial capabilities.

Q. And how did your first education series go?

A. We honestly did not know what to expect but had two amazing partners that believed in our premise. Having had Kellogg and Greenberg Traurig co-organize the series really helped in having people step off the sidelines. All the speakers were volunteers we got from the community, and most of the success is due to their involvement, so a big shout-out to our speakers.

Q. Do you plan to continue the series or have other plans in the education area?

A. Absolutely. Having heard the feedback from the attendees, we are back at the drawing board for a second cycle starting in the fall. Stay tuned.

Q. What do you hope to bring back from your Kauffman Fellowship experience that is just getting under way?

A. Two things, mainly. The first is technical training. As I mentioned before, tech is very new to our investment community, so having more sophisticated investors will strengthen the ecosystem. The second is being able to plug in the Miami ecosystem to the global VC world.

Funding risk is perhaps the biggest risk Miami-based startups face. It’s a win-win situation if AGP can co-invest with the best VCs at a global level. More entrepreneurs will want to work with AGP because that will increase their chances of success.

Q. From your perspective meeting with so many entrepreneurs every month, how do you think our ecosystem is progressing?

A. There’s a natural hype that comes with a growing, improving ecosystem. That means more companies in quantity but not necessarily in quality. There starts to be a lot of noise coming from “want-a-preneurs.” I take it as a great sign, and we just have to be efficient at cutting to the next cycle.

Q. And, more specifically, the capital ecosystem?

A. Definitely a lot of activity. Some funds have taken the plunge and opened offices locally, while others are peeking in, ever more "aggressively. It’s not uncommon to grab coffee with a visiting VC every other week.

Q. What role do family offices play in all this?

A. Family offices understand there’s something going on that they want to be a part of. Most are not trained in VC and haven’t yet developed a strategy that fits within their broader portfolio. From what we’ve seen, the traditional VC model has not proven very successful when it comes to engaging them. A hybrid model is needed, and it’ll be interesting to see how the story unfolds.

Q. If you could wave a magic wand and add one ingredient to the ecosystem right now, what would it be?

A. I’ll cheat and mention two. One is more accelerators. If you look at developed ecosystems, the main accelerator alone will be working with 150+ companies a year. While the Venture Hive is amazing, we need more companies to go through programs like that. The second ingredient is investors across the board. More angel investors, more seed funds and definitely more VC funds.

Follow Nancy Dahlberg on Twitter @ndahlberg.

Nico Berardi

Titles: Managing Director, AGP Miami. Kauffman Fellow.

Age: 26.

Experience: Former U.S. CEO for TECHO, a nonprofit that mobilizes youth volunteers to fight extreme poverty in Latin America, for two years, and before that was TECHO’s director of development for Latin America and the Caribbean.

Honors: Speaker at the Global Economic Symposium, TEDx Miami and the Center for Hemispheric Policy and the Americas Society/Council of the Americas. Participant in the Kellogg Innovation Network, Clinton Global Initiative and the PODER Business Awards. Selected as a Young American Leader by Harvard Business School, Top 100 Innovators of Argentina by BGH, GameChanger by the Miami Chamber of Commerce and showcased at Yahoo! The Innovators series.

Education: Bachelor’s in economics, Universidad Torcuato di Tella, Argentina.

Favorite book: ‘Outliers’ by Malcolm Gladwell.

Best advice received: There are over a thousand variables determining your success. How much effort you put in is the only one you can do anything about.