Standard Bariatrics

Standard Bariatrics is a clinical-staged company developing and commercializing innovate medical devices for the surgical treatment of obesity. Its Standard Clamp was cleared by the FDA in August c2017, and today more than 32 hospitals are using the device. Surgeons are praising the clamp for its consistency leading to positive outcomes, as well as the hospital buyers who value the reduction of supply costs of the existing staplers used with clamp.

Recently, the company closed on a Series A round of funding with the help of QCA. Members Tony Shipley, John Habbert and Roy Kulick played critical rolls in the early rounds and leading up to the Series A financing.

“Without the support of Queen City Angels, we would not have achieved the milestones that were required to go out and raise the amount of capital we needed in series A,” said Matt Sokany, CEO of Standard Bariatrics. “In the early stages, Roy was a board advisor, and I was quick to learn his value, not only representing QCA, but also his experience in the life sciences arena.”

As Standard Bariatrics was preparing for a new round of funding, the company wanted to reach out to a wider number of angel investors and groups across the country. QCA’s connection to the national angel groups, particularly in California, Texas and other parts of Ohio. QCA’s reputation and connections allowed Sokany to reach out number of people to get the best indication of interest in the Series A round.

“Tony has a really good handle on the types of angel groups that would be appropriate for our deal,” said Sokany. “A number of people took my call, and I had a number of conversations with investors because of Tony’s and QCA’s influence. Their time and energy focusing on the right investment groups brought about a sizable syndication.

In addition to making connection, Shipley also spent time helping develop the pitch presentation, providing input on how to present Standard Bariatrics opportunity in the best light. In the end, RiverVest Venture Partners, a Midwest VC, provided the term sheet. While there were questions about whether or not an angel group would appropriate for this part of the investment, Shipley was able to articulate how QCA works, and in the end, RiverVest was comfortable with QCA and the other angel investors introduced by QCA to the deal.

“QCA is a very good partner, and we never felt that QCA was only looking out for QCA,” added Sokany. “Even when we only had two board seats to offer for the funding, and QCA was not offered, the group was supportive, and excepted a observer seat graciously. They were always looking out for what fit within our investment strategy and business.”

Today, Standard Bariatrics looks at QCA as a strong partner with members who have vast knowledge in the start-up world that add value to the company’s c-suite. Sokany sees QCA has a great resource to tap into when big decisions are coming and the company needs different inputs to address challenges and opportunities.

Sokany stated, “The most important thing about making the right decision is to have access to the most information I can. QCA adds real value to its portfolio companies, not only supplying capital, but also business experience, and functional and technical skill that we can tap into as often as we need to.”

SoLo Funds Finds Home in Cincinnati

Travis Holoway left his home in New York City to take a chance on himself, building a start-up in a new city amongst strangers. Jump forward a few months, and Holoway is now a fan of the city and the “strangers” who have helped him establish Solo Funds, a mobile lending exchange connecting lenders with borrowers for the purpose of providing more affordable access to loans under $1,000. The mobile-based platform is peer-to-peer lending in its purest form. From a mobile device, anyone can now lend to or borrow from anyone in the country. SoLo Funds’ has eliminated the strain of pay day loans, the need to borrow from friends and family, and the awkward moments and strained relationships that can often arise when money is involved.

SoLo launched its full version on April 2018 and also announced a $1.2 million round of seed funding led by QCA. T.H.E. caught up with Solo CEO Travis Holoway to learn more about his company, his experience building a business in Cincinnati and the support he has received from QCA.

T.H.E.: What has happened since you received your investment from QCA?
Holoway: We conducted a closed beta of our iOS product, which provided us with the ability to gather data and feedback to improve our process and overall user experience. We are now nationwide with our product through the Google Play and Apple App Stores.

T.H.E.: How have you used the QCA investment to move your company forward?
Holoway: Since our investment from QCA, we’ve been able to grow our team. Key hires for design, Quality Assurance, and marketing were made which have expedited our progress immensely.

T.H.E.: Describe your experience working with QCA
Holoway: The experience has been great so far. There is a reason why they are such a respected group. I appreciate the professionalism, honesty, and support that I’ve gotten both directly and indirectly from multiple members of the group. Investing money is one thing that can be recovered. It’s the time invested in me and SoLo that means more because that can never be recouped. With that said, I feel like they truly care about SoLo’s success, and that means the world to me.

T.H.E.: Describe the interaction with your specific angel member, how does he/she continue to support you
Holoway: I feel like I have “cheated the system” because there are multiple members of the organization that have poured their knowledge and experiences into me. Mark Dawes has been a champion for SoLo since we met at the Hillman Accelerator and I’m so thankful for that. I have no doubt that he is one of the smartest people I’ve ever met. Jack Ridge and I meet regularly, and he never fails to leave a gem with me. It’s easy to get so far ingrained in your company and personal vision that you are blinded by opportunities that are sometimes overtly apparent. Jack’s questions and suggestions have been extremely helpful. I enjoy leaving our meetings thinking in a way that I’ve never thought before as it will help us grow in the long run.

T.H.E: What’s next for SoLo Funds?
Holoway: The goal for SoLo is to unequivocally be the number one resource for loans under $1,000. That’s a lofty goal, but I didn’t give up a stable career and encourage others to leave their jobs just to join me on a path of mediocrity. The idea for SoLo comes from authentic personal experiences. I’m just tired of watching vulnerable people being taken advantage of by predatory lending practices. It’s been such a long journey to launch this product. The satisfaction for me won’t come from press, notoriety, or revenue. It will come from witnessing the impact of providing more affordable financial solutions for the people who need it most.

T.H.E.: What is your perspective of Cincinnati and its startup/entrepreneurial scene?
Holoway: I’m a huge fan of Cincinnati and its startup ecosystem. I decided to move our company here from NYC, so I feel like the unofficial poster child for StartupCincy. There are the obvious advantages like lower burn rates, big-cos that are open to partnering with startups, access to capital, and talent. What I’ve been most impressed with are the intangibles like how supportive strangers have been to me and our team as a whole. The other startup founders in the area are friendly and always willing to help connect the dots for others. Even though we are running separate companies and competing for investment capital from the same groups, there seems to be an element of team and camaraderie that is truly special. It’s just something you don’t find in most cities, definitely not in NYC.

T.H.E.: What would you say to entrepreneurs or startups considering working with QCA?
Holoway: To understand that their diligence process is stringent for a reason. I think the process helps founders look at their business more intimately and objectively, which helps to identify vulnerabilities and potential opportunities. I would also note that this is an organization filled with a lot of experience and knowledge across various sectors/industries. To me, this is one of the most exciting benefits of having QCA in our corner. This level of knowledge and experience is invaluable, but you have to take advantage of it, having access to resources is worthless if you don’t utilize them.

T.H.E.: What are some lessons you have learned during your startup journey that can help others going through or considering a startup?
Holoway: That you have to be fully committed. You can’t be half-in and half-out. I used to pitch investors while still working my previous full-time job, and I couldn’t understand why they would pass on me because I wasn’t full-time. When I look at the progress I made while “moonlighting” versus being full-time I now wholeheartedly understand the perspective of investors. Being full-time on an idea that has an uncertain financial future is such a vulnerable feeling, but that vulnerability lit a fire in me that I didn’t know existed. My thought process switched from “I hope this works” to “This has to work, and I’m willing to do whatever it takes to make it work.” That’s powerful. I’d also say that asking for help is important. I’ve always been very much the “I can figure it out myself” type, but that doesn’t work in this world. Asking for help doesn’t show weakness, it shows awareness. Nobody achieves success without help along the way.

Queen City Angels Leads New Investment in CRäKN

Company using investment to bring never before seen innovations to the death-care industry

CINCINNATI – June XX, 2018 – Queen City Angels today announced a new investment in CRäKN, a cloud-based software solution that helps funeral directors manage day-to-day operations in order to streamline operations, prevent errors, and save time. This is the second investment in CRäKN for QCA, which provided early-stage funding for the company in June 2017. The new round of funding includes investment from QCA and QCA members, as well as funds from industry professionals and from Canadian investors. More than half the funds were from outside the United States.

CRäKN plans to use the funds to continue rounding out the product, bringing new innovations to the funeral home industry, and for marketing support to help increase awareness for the company’s technology. The company is also hiring developers, customer success personnel and sales professionals. Many of the operational hires will be based in Cincinnati, while the sales team will be located throughout the country.

“Our software makes funeral directors’ lives much easier, so they can focus on families and providing a great experience for them, and less time on other business details,” said Scott Mindrum, president and CEO of CRäKN. “The industry is ripe for innovation, and we are finding customers and prospective customers who have been waiting for technology like ours to help them be more efficient and provide excellent service. Funeral directors are notorious world-class jugglers. CRäKN gives them more arms to manage every aspect of their businesses.”

Mindrum added, “As a member of QCA, I have a unique perspective on the angel group. Terry Wright with QCA has been awesome, jumping in whenever we need help. He has gone above and beyond a typical angel investor, accompanying us to investigate new technology, and helping us figure out pricing and marketing strategies. We appreciate QCA’s commitment to CRäKN and the local entrepreneurial community.”

Prior to CRäKN, most funeral directors managed their interactions with customers with pens and paper forms. Often, doing arrangement forms by hand led to duplicated efforts, as information was entered into various systems. On average, the name of the deceased is written more than 50 times when planning funerals. This increases the opportunity for spelling mistakes, transposition errors and inaccurate filings. CRäKN eliminates these manual processes, and the new innovations will increase efficiencies even further.

“The past year we have seen a lot of innovation coming from CRäKN, and we are excited for the industry’s response as the new technologies are released later this year,” said Wright. “The company has doubled down on mobile capabilities and is doing things that no one in the industry is doing; all of which bodes well for CRäKN’s near and long-term success.”

About Queen City Angels
The Queen City Angels (QCA) is a group of more than 50 experienced accredited investors who provide funding, support and guidance to early-stage growth companies in the Cincinnati area and surrounding region. QCA members, which include former C-level executives and entrepreneurs, draw from their personal operating and management experience to evaluate opportunities and provide on-going mentoring to young businesses with exceptional growth potential. Since 2000, QCA members have directly invested approximately $50 million in nearly 80 portfolio companies. The total capital invested in these companies, including QCA members’ capital, syndication partners’ capital, follow-on venture capital funds and venture debt is in excess of $410 million. CB Insight recently ranked QCA second out of 370 national angel organizations. For additional information, visit www.qca.com.

About CRäKN
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QCA Rising with New Ascent Program

Earlier this year, QCA launched the Ascent program with the purpose to add diversity and unique perspectives to QCA with a goal to welcome younger members, more women and people of color. Ascent is an outgrowth of a key strategic imperative for QCA to improve diversity and inclusion. The effort will make QCA a better organization that will ultimately deliver better outcomes, and returns for investors and portfolio companies.

Recently, T.H.E. had the opportunity to interview Ann Mooney, a member of QCA and the person tasked with leading this new initiative. Ann grew up in a small town in rural Ohio, and launched her first entrepreneurial venture at the age of 12 with a lawn care service. She earned her bachelor’s and MBA in finance from Indiana University, and started her career at P&G working in finance, strategy and marketing. After 18 years at P&G, she launched Rising Moon Consulting in 2009, working with Fortune 500 companies and start-ups. She is a mentor at The Brandery and serves as a strategic advisor with a young company that has grown to more than $13 million in revenues in just over three years. Recognizing her passion for start-ups, she wanted to learn more about the funding side, which led her to QCA and the Ascent program.

T.H.E.: What made you want to get involved in QCA and Ascent.

Mooney: Ascent’s lower upfront investment definitely accelerated my timeline in getting involved in angel investing! And I’m thrilled that I made the leap when I did. I’ve learned so much in this last year, and know it’s only the beginning of an exciting many-year journey for me in angel investing.

T.H.E.: Why Cincinnati, and why now? What makes this the right place and time for Ascent?

Mooney: It’s an exciting timing in Cincinnati! The downtown economic development is cultivating a palpable vibrancy and energy in the city. The #StartupCincy ecosystem is bumping! Union Hall, led by Cintrifuse, is a true hub for entrepreneurialism. Incubators and accelerators seem to be almost reproducing (e.g., The Brandery/gener8tor, UpTech, Aviatra, Mortar, Hillman, First Hatch), with an increasing emphasis on diversity and inclusion.

There’s an infusion of energy and youthful talent and exuberance that is elevating the city. At the same time, new venture funds are spawning, and there seems to be the beginnings of an influx of new blood into angel investing. For start-up founders, the cost of living of Cincinnati gives them an advantage over the coasts – with funding raised going further (lower payrolls, lower burn). And, for investors, start-up valuations in the Midwest are more reasonable, allowing for higher possible returns.

T.H.E.: What do you feel are the biggest challenges for getting more women involved in angel investing?

Mooney: I see four definite challenges. First and foremost is awareness. We need to make more women with the financial wherewithal aware of angel investing as an asset class.

Second is education. Women, need to understand the ins and outs of angel investing, and how to get started. It’s worth noting that the education program that Sue and Steve Baggott have put together has been amazing! It’s helping accelerate my learning curve on many important topics related to angel investing – from due diligence to term streets, etc.

Third, women tend to be more risk averse. The lower Ascent investment allows me to learn and experiment with angel investing without an outsized financial commitment.

Finally is respect. This might not seem obvious to some. The current QCA membership is disproportionately male. Many women, like me, who’ve spent a career in male-dominated corporate environments – with perhaps more than a few examples of feeling under-appreciated, slighted, passed over, disrespected, etc – might not want to carry the weight of helping turn the diversity tide in angel investing. I’ll be honest, I had that thought myself. Ultimately though, I decided I want to be an integral part of creating the changing face of angel investing. I relish the challenge. I’m diving into this effort initially via membership on the QCA Diversity & Inclusion Committee. I’ve also started to actively socialize QCA & Ascent among my network, with the hope of attracting more newcomers like me.

T.H.E.: How do you measure the success of the program?

Mooney: We want to look at a broad set of KPIs, include Ascent membership, diversity, educational sessions conduct and participation levels, as well as due diligence team participation, the number and amount of angel investments made, and referrals by Ascent members for additional QCA members.

T.H.E.: Since you started, what have you learned about the people interested in angel investing?

Mooney: Since joining QCA via the new Ascent membership in early 2017, I’ve learned that those interested in angel investing are really awesome people! They are deeply invested in the whole entrepreneurship and innovation ecosystem. Out of the gates, I noticed experienced angels were welcoming to newcomers like me! And, not surprisingly, I discovered angels are smart, enterprising people who’ve had very successful careers in their own right. Angels seem to be motivated by a combination of ‘staying in the game,’ helping young founders be successful, earning a return and/ or making a meaningful impact. Though without exception, angels’ unique expertise is hugely valuable in evaluating start-ups seeking investment and advising them once investments are made.

T.H.E.: How do you see Ascent helping people transition to angel investing?

Mooney: The Ascent has a lower investment threshold, and hence removes the upfront ‘big check’ that might be a barrier for some contemplating joining QCA. This is especially true for women and minorities. The program allows Ascent members to gain experience and confidence in angel investing, and to learn from the vast wisdom of the QCA group.

T.H.E.: How do we get more women to get engaged with investing in start-ups?

Mooney: To get more women engaged with investing in start-ups, we need to address the aforementioned challenges barriers to entry: 1) awareness, 2) education, 3) risk and 4) respect. A great example of an event that addressed the first two was the Venturesome Woman event, a by-women, for-women day-long educational workshop last Summer. There were 60+ fabulous women in attendance. The energy was amazing. The curriculum was terrific. The speakers were true subject matter experts. The materials were relevant and helpful. We all left energized and inspired! I’m hoping we can do more of these types of things. Another example that addresses all four challenges mentioned are angel funds like Rising Tide abd Next Wave that are squarely focus on diversity of investors and companies.

T.H.E.: What’s next for Ascent?

Mooney: Ascent is just getting started. As QCA raises its next fund in the next year or so, we want to dramatically grow Ascent membership to perhaps 10% of the total fund. Achieving this would amount to quintupling the number of Ascent members vs. today. This would have a huge immediate impact on the diversity of QCA!

Queen City Angels Invests in Divine Services Corporation

divine-webQueen City Angels (QCA) recently completed an investment in Divine Services Corporation, a growing traditional and on-demand valet service for downtown Dayton and Cincinnati. In addition to its traditional valet offerings, Divine Services is modernizing valet services. The company uses mobile teams that will customers anywhere within the service area to pick up their vehicles and deliver them to their designated location, also anywhere within the service area. Customers can engage Divine Services with a simple request through the company’s mobile app. Divine Services plans to use QCA’s investment for working capital and expansion.

“We are catering to individuals and developers downtown, offering a solution for communities that extends beyond simply parking a car,” said Cody Bratton, CEO of Divine Services Corporation. “We have a team of well-trained, professional drivers that want to eliminate any worry that our clients might have about their vehicles. We have invested significantly in our culture, brand, technology, processes and training to ensure that we provide a memorable experience every time. From our staff’s appearance and electric scooters, to drop-off and pick-up anywhere in the city, we want to make people feel like rock stars.”

Bratton added, “I have found tremendous value in working with QCA because they bring so much more to the table than money. I’m looking for guidance and coaching, and there have been fewer bumps in the road because of QCA.”

Divine Service valets can be requested anywhere in the Cincinnati downtown area including Over-The-Rhine, by simply dropping a pin on the city map in the Divine mobile app. A member of Divine Services’ team will be waiting at the location to drive the car to designated parking areas. The car will be returned to the customer with another pin drop in the app. Drop off and pick-up can be at different locations in the city.

“Divine has built its business on a culture that focuses on quality, accountability and execution,” said Randy Cantor QCA lead investor and Divine Services board member. “Queen City Angels and Divine’s Board of Directors are confidence that the company’s executive team will execute successfully. With a culture established, Cody and his team are moving forward with an aggressive game plan that includes expanded services and markets that will really help the company grow. Divine Services understands that this business is not about parking cars. It’s about delivering an experience that customers will want again and again. We look forward to helping Cody along this journey.”

A Trusted Legal Partner

Taft logoa-trusted-legal-partner-webTaft Stettinius & Hollister LLP (Taft) is a valuable QCA partner. Since QCA’s formation over 15 years ago, we have engaged with Taft to provide a number of legal services needed by QCA. Taft has a strong presence in this region with over 400 attorneys practicing every area of law. The firm understands the business climate and is actively engaged in building the region’s entrepreneurial business climate. Recently, The Halo Effect (T.H.E.) had the opportunity to interview James M. Zimmerman, Partner In Charge of Taft’s Cincinnati operations, about the firm’s role in Cincinnati’s emerging start-up and small business scene. We also asked his perspective on how the city is doing in supporting the entrepreneurs and founders in their efforts to build businesses in southwest Ohio.

T.H.E.: Why is Taft so engaged in Cincinnati’s entrepreneurial community?

Zimmerman: We believe that a strong entrepreneurial community is critical to maintaining a vibrant local economy.  We care deeply about Cincinnati, and we see this as one way that we can give back to the community by offering our expertise to help build the region’s economy.  A more vibrant local economy, with more successful startups, is also good for our business.

T.H.E.: What do you see TAFT’s role in the advancement of start-ups and small businesses in the region?

Zimmerman: We’ve been fortunate to play a role in several initiatives serving startups and small businesses in the region, including The Brandery and Cintrifuse.  Obviously, lots of others are involved, but we like to think that we play a valuable role in helping launch initiatives that support startups and small businesses, and in advising those startups and small businesses to help them grow and prosper.

T.H.E.: How do you see the current climate for start-ups in Cincinnati? How is the city doing in developing a culture for small businesses?

Zimmerman: The current climate for startups in Cincinnati is significantly better than it was a few years ago.  There are more startups, more experienced entrepreneurs, and a lot more organizations dedicated to helping startups and small businesses than there were.  The culture of the city is still a Midwestern, risk-adverse culture in general.  I would love to see risk-taking continue to become more a part of our business culture in Cincinnati.

T.H.E.: From your perspective, what are the challenges that the city faces when it comes to start-ups and what is TAFT doing to help overcome these challenges?

Zimmerman: I already mentioned our conservative, risk-adverse culture that I believe sometimes holds us back.  Another challenge we have is that there is a fairly small number of recent successful exits for startups and growth companies in Cincinnati.  More successful exits – particularly big, high profile ones – would create more experienced entrepreneurs and more wealth to re-invest in startups!  At Taft, we try to do our part by helping our startup and growth company clients grow and ultimately achieve a successful exit.

T.H.E.: What are some of the services TAFT provides that are focused on small businesses, start-ups and entrepreneurs?

Zimmerman: We have a lot of experience providing services to small businesses, startups and entrepreneurs.  Our services include helping them form a legal entity; raising a first round of financing; patent and intellectual property protection; helping with the legal side of hiring employees; venture capital and other types of financings; and the ultimate exit (sale or initial public offering).

As a supporting QCA sponsor, Taft supports QCA’s mission, which is to provide capital to early stage companies, plus ongoing counsel to maximize shareholder returns and build a stronger, regional ecosystem. QCA supports its mission by co-managing entrepreneur development programs (Morning Mentoring , eKickStart, and our annual Entrepreneur Boot Camp.

We appreciate our longstanding relationship with Taft and the firm’s active role and interest in building the local entrepreneur ecosystem.

Brick and MORTAR…

At first I wasn't sure what to expect from a relationship with the QCA.  However, Scott and team have been tremendously supportive in ensuring that whatever resources are at their disposal are offered to the entrepreneurs we serve.  From discounts to events to opportunities to share our story in front of their investor team, Scott and the QCA have been incredibly helpful and supportive of our work.
At first I wasn’t sure what to expect from a relationship with the QCA.

However, Scott and team have been tremendously supportive in ensuring that whatever resources are at their disposal are offered to the entrepreneurs we serve. From discounts to events to opportunities to share our story in front of their investor team, Scott and the QCA have been incredibly helpful and supportive of our work.

The number of resources available to entrepreneurs and start-up companies continues to grow in Cincinnati. In 2014, three friends started an organization focused on serving underserved downtown communities such as Walnut Hills and Over the Rhine. MORTAR fulfills its purpose by “offering non-traditional entrepreneurs the opportunity to use their inherent talents to not just make a dollar, but to positively participate in the rise of Cincinnati.” The organization has created a nine-week entrepreneurship course to help low-income urban entrepreneurs build or expand their dream businesses, giving them the tools to help them grow with their neighborhoods.

In the past year+, MORTAR graduated its first and second classes of entrepreneurs, opened a Brick OTR, a pop-up shop to feature local goods, introduced its third class and initiated a partnership with Xavier. MORTAR has found traction in helping people find their passion and talents, and build a business around them. A quick glance at the organizations partner and news pages, and it’s clear that MORTAR is doing something right. We recently had the opportunity to catch up with Derrick Braziel, Managing Director of MORTAR to learn more about him and his emerging organization.

T.H.E.: What about your background prepared you to launch MORTAR?

Braziel: I’m not sure if anything in my background has sufficiently prepared me for MORTAR.  If anything, my background showed me why MORTAR was needed. Both of my parents are first generation college graduates and they both grew up in poverty and I recognize the need for under-resourced entrepreneurs to have opportunities to break the cycle of poverty. This is why MORTAR was born.

T.H.E.: Why Cincinnati, and why now? What makes this the right place and time for MORTAR?

Braziel: Statistically, MORTAR recognizes that entrepreneurs of color struggle in Cincinnati. The Kauffman index ranks Cincinnati 32nd out of 40 in terms of entrepreneurial opportunity and Forbes ranks Cincinnati 50th out of 52 cities in terms of economic opportunity for African-Americans.

About 18% of Cincinnati businesses are African-American, despite representing 43% of the population and 29% are women-owned, despite representing 52% of the population.  According to a recent Urban League report, Cincinnati lags behind peer cities with only 6.9 minority-owned businesses per 1,000 residents.

Because of this information I, along with my colleagues, couldn’t wait any longer to try to turn the tide.  There’s no better time than now to start programs that enable entrepreneurs from challenged socioeconomic backgrounds to change their lives.

T.H.E.: What have been the biggest challenges for you and MORTAR to this point?

Braziel: The biggest challenge BY FAR has been access to capital, both for our organization as well as for our entrepreneurs.  If 80% of your start-up capital comes from friends and family, and the median household income for white households is over eight times higher than African-American households, access to capital is significantly important.  As a result, we (along with our entrepreneurs) are bootstrapping and continuing to show indicators of success until we’re able to solicit a long-term investment.

T.H.E.: What types of companies are you looking for to be part of your program?

Braziel: We do not have a specific type of company that we "look for" although most of the businesses in our program would fall under lifestyle businesses.  Regardless, we’re starting to see more tech businesses, and we have a plan to integrate tech into our program to support entrepreneurs who wish to become more tech-enabled.

T.H.E.: How do you measure success with the entrepreneurs you are mentoring?

Braziel: We measure success in the following ways:

  • # of students who participate in the class
  • # of students who graduate from the class
  • $’s invested in these businesses
  • # of jobs created
  • # of new businesses incorporated

T.H.E.: Since you started, what lessons have you learned that have made you a stronger organization? How has MORTAR evolved in your early stages?

Braziel: I think we’ve learned that we can’t do everything on our own, despite our best efforts to.  Luckily we’ve been able to cultivate partnerships with a myriad of organizations around the city to provide holistic services that we believe will support the long-term success of the entrepreneurs we serve.

T.H.E: Can you share an example of companies that have participated in your program and have started to experience success?

Braziel: Here are just a few:

  1. Nyah Higgins
  2. Lindsey Metz
  3. Anton Canady
  4. Kristen Bailey

T.H.E.: How do you see MORTAR working with other incubators and organizations that are helping small businesses and entrepreneurs?

Braziel: We think it takes a village to raise an entrepreneur. So, we’re working with partners across the region to hopefully connect entrepreneurs in our class to the resources that are available in our local ecosystem. If it’s funding, we train and connect our folks to funders. If it’s legal support, we have a partner there. The system is designed for us to partner with other organizations that have more expertise than us, so we can focus on training and other partners can provide other expertise.

T.H.E.: What do you think Cincinnati and the surrounding region need to do to make small business success a priority?

Braziel: We need more opportunities for non-traditional entrepreneurs. Our current system, unfortunately, is designed to support entrepreneurs who have access, connections, and inherently understand the system.  What we want to do is educate people to think of other people who may be entrepreneurs, people who operate in their living room, out of their trunk, etc., and look to provide them with the same opportunities.  These people have the same skill-sets as other entrepreneurs they just don’t know what they don’t know. Our goal is to expose our region to these talented folks an hopefully ensure that they are being connected to resources and opportunities.

T.H.E.: What’s next for MORTAR?

Braziel: Eventually, we want other parts of the U.S. to look at MORTAR for expertise in intentional community development. As communities are looking to empower residents to fill storefronts or anything else, we hope that they could look into MORTAR’s approach as a possible solution.

Learn more about MORTAR at www.wearemortar.com.

Angel Spotlight: Don McKee

don-mckee-webOver the past eight years, Don McKee has become a leading member of the Queen City Angels. He has been instrumental in arranging and then raising the initial and follow-on financings for six companies and currently serves as a lead board member for four companies. In 2013, after nomination by one of his portfolio companies, Don won the E&Y Outstanding Private Company Director of the Year Award.

Recently, The Halo Effect took the opportunity to conduct a brief Q&A session with Don.

1. What is your professional background, and how did it prepare you for your role in QCA?

My 30 years of experience helping to build successful corporations in several different industries prepared me well for the roles I play at QCA. I had responsibility for finance and business strategy for most of the 30 years, the last 15 as CFO. Early in my career, at Richardson Vicks, subsequently acquired by Procter & Gamble, I spent 8 years as a sounding board and advisor to CEOs and CFOs of foreign subsidiaries in strategy, finance, marketing and sales. I also developed financial and strategic planning systems and analyzed the strategic and operational plans of each subsidiary. This role was very similar to my current role as board member and advisor to QCA companies. At Richardson Vicks and subsequently as treasurer and CFO of larger companies, I raised debt and equity capital for numerous entities.

2. Why did you join QCA?

I love to work with smart, passionate CEOs to build fast growing and profitable companies.

3. What is one piece of advice you were given early in your career that continues to serve you well today?

Always set and maintain the highest standards of performance for yourself and your organizations. Since no one person has all of the best answers, seek to work with people who are open to a collaborative working environment. Avoid people who believe they have all of the answers and are not open to ideas of others.

4. What are one or two common themes you run across when working with entrepreneurs?

To successfully build a company, it always takes twice as long as projected and costs twice as much money.

5. What business, political, or social issues do you think will have an impact on the business climate in our region? Why?

I believe the immense and growing debt level of our country is likely to be a significant drag on future generations when interest rates rise and the level of debt keeps growing. High and increasing debt service requirements will result in higher interest rates, taxes and less money available for all other sectors of our national budget.

6. What company do you suggest entrepreneurs watch as a good example of success?

AssureRx and Ecolibrium Solar are two companies that come to mind as good examples of success. Several other companies that I am working with are likely to become additional examples.

7. What is something about QCA that the public may not know about or understand?

While we compete as a source of capital for young companies, our key strength and differentiation is the intellectual capital that we share with the companies in which we invest. Members of QCA have broad and deep backgrounds in most areas of business.

8. What do you consider as Cincinnati’s strengths and weaknesses for starting a business?

In the last 10 years Cincinnati has burgeoned into a very attractive place to start a business. The Entrepreneurial Ecosystem has expanded and grown to meet the needs of entrepreneurs. . Cintrifuse can now help direct entrepreneurs to the resources they need. The Hamilton County Development Center continues to be an invaluable resource to young companies. New accelerators and programs including Bad Girl Ventures, The Brandery, Mortar, Ocean, and Uptech are very positive assets for young entrepreneurs. Furthermore, QCA and CincyTech have recently raised significantly more money to support seed and seed plus rounds, and are sharing investment opportunities with other angel groups.

Despite these positive developments, raising follow on rounds of $2-3 million remains a challenge for young companies. Venture capitalists are now focusing on later stage companies and the demand for this level of funding outweighs the supply. As a result, realistic company valuations, syndication of deals with other angel groups, and achieving cash flow breakeven sooner all are more critical today.

Queen City Angels Closes Largest Fund in Group’s History

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$10 Million First Fund V includes $5 million in match funds from Ohio Third Frontier

Queen City Angels has closed the largest fund in the group’s history. The $10 million First Fund V (FFV) is the fifth in a family of funds and includes $5 million in private funds from QCA members and two Cincinnati-based institutional investors, Ft. Washington Capital and Interact for Health. The remaining $5 million of matched funds came from Ohio Third Frontier. QCA’s history with Third Frontier dates back to 2003, when it was the first angel group recipient and among the first overall recipients of state funds.

“Since we started QCA 16 years ago, we have invested nearly $50 million in nearly 80 companies,” said Tony Shipley, founder of QCA. He and John Habbert, director of QCA, will manage FFV.

He added, “This new fund will allow us to further expand our efforts, helping more entrepreneurs and early-stage ventures to accelerate their development, grow their operations, launch new products, expand their reach or take whatever that next step may be towards success. This size of fund is a major milestone for our group, and we appreciate the confidence that Third Frontier has shown us as a partner in building economic growth in Ohio.”

QCA will use the funds to invest in companies throughout the state of Ohio, focusing on technology businesses such as life sciences and biotech companies like Assurex and IT companies like ShareThis. QCA was the first investor in Assurex, which received funds from QCA First Fund II. ShareThis received an investment from QCA First Fund. Other industries of focus may include advanced manufacturing and materials science.

Habbert added, “Key to QCA’s longevity and success is our growing and committed membership, and our strong partnerships with local incubators, universities, venture capitalists and government agencies. In addition to leading investment rounds, QCA will continue to support syndication deals with other recognized and certified angel groups throughout the state as part of our alliance with the Angel Capital Association Ohio. Based on our history, we envision FFV will support 15-20 different companies.”

One-on-One with an Angel: Richard Westheimer

angel1  What is your professional background, and how did it prepare you for your role in QCA?

I began my professional life as a 20-year Cincinnati Public School elementary school teacher and then leadership consultant for the schools.  In the mid 90s, I took over our family office, managing and then initiating our alternative and direct investment portfolio.

2  Why did you join QCA?

Deal flow and collaboration are the keys to developing a great direct investment portfolio.  QCA was developing a channel to good deal flow and was assembling terrific cadre of experienced investors and successful entrepreneurs with whom I looked forward to collaborating.

3  As an educator, what do you consider as Cincinnati’s strengths and weaknesses when it comes to education?

The strength of the STRIVE partnership is becoming a real community asset.  All institutional participants have improved their work under the auspices of STRIVE and are serving as a model for such collaborations nationwide.  In addition, the Community Learning Center program, pioneered by CPS has gone a long way to removing the barriers that kids who grow up in communities of constructed poverty face.  The weaknesses are similar to weaknesses in all urban environments.  Schools are asked to do everything from acting as foster parents, to social service agencies, to counseling services, to…  They are given sufficient resources to teach but must use those resources to serve so many other roles in kids’ lives.  Ohio’s funding structure puts an undue burden on urban property owners to fund this work.

4  What is one piece of advice you were given early in your career that continues to serve you well today?

All enterprises have a mix of dedicated participants and "tagalongs." Team up with the dedicated folks no matter their status in the enterprise, and you’ll be golden.

5  What are one or two common themes you run across when working with entrepreneurs?

We — entrepreneurs and investors — tend to focus on what we are comfortable with and attribute to those things outsized importance.  Often the important things are outside of our experience or comfort zone.  It is to our benefit — again as entrepreneurs and investors — to invite rouge players and naysayers to the table to help push us out of those comfort zones.

6  What are you reading today, and what is one thing you have learned from it?

I read a mix of fiction and non-fiction. Just finished Between the World and Me by Ta-Nehisi Coates. Coates’ personal narrative lyrically and fearlessly explores growing up black and poor on the mean streets of Baltimore. It is at once one of the most beautifully written books I’ve read and the most haunting. I would put it on my required reading list for good citizenship. The last fiction I read was Nathan Coulter by Wendell Berry — a story that rests on a theme of good hard menial work being "good" in and of itself. It further teases out issues of trust and collaboration and how important they are to any enterprise that involves more than one person, no matter how simple or complex.

7  What company do you suggest entrepreneurs watch as a good example of success?

This, of course, depends on the entrepreneur and her or his enterprise. I do think it is important for fledgling entrepreneurs to study failed enterprises, as well as thriving ones.