The Halo Effect

5d74b456-350b-4a1a-809a-3a1a80c23752For the past 20 years, Brian Berning has been a consistent presence within the entrepreneurial and start-up community in Cincinnati. As Office Managing Partner at BDO USA LLP, Berning is a CPA and trusted business advisor specializing in M&A, tax planning and entrepreneurial growth strategies. He is also a member of the firm’s technology executive committee, and actively engaged as Chairperson of The Circuit, Cincinnati’s information technology association. In the various business circles around the region, Berning offers a valued and well-respected perspective of what it takes to start and build a successful venture. The Halo Effect (T.H.E.) recently caught up with Berning to learn more about him and get his insights on the status of the local start-up and technology scenes.

T.H.E.:  What made you want to work in financial services?

Berning: Initially, I thought I was going to work for the FBI. The Bureau encouraged me to pursue a career in accounting for white-collar crimes. I’ve always had an interest in business, and I felt more comfortable and more intrigued with math.

T.H.E. What is one piece of advice you were given early in your career that continues to resonate today?

Berning: Servant leadership is a philosophy that includes a set of core principals and a set of practices that stems from a conscious choice to serve others.  Through transparency, inclusion and accountability, we can enrich the lives of those around us, which leads to greater satisfaction and productivity. 

T.H.E. As a CPA who works with entrepreneurs, what are a few things you have learned, from a financial perspective that can help young companies when it comes to managing the financial side of their businesses?

Berning: First, talent matters. It’s important to hire the best professionals you can afford, internally and externally.  The right team will pay the highest return on investment over time. 

Second, focus your time on the core activities of your business and outsource the rest with competent professionals who have a positive reputation in the industry. 

Third, forecast cash flows vigorously and update your cash flow forecasts monthly.  Cash is king.  Finances of early stage companies are volatile and ever-changing.  Stay on top of it so you can accurately predict how fast, or slow, you are burning cash.  Compare your burn rate with your milestones (goals) to check if you are on track or need to pivot accordingly.

T.H.E. Why do you enjoy working with entrepreneurs?

Berning: I’m an accountant, who is secretly an entrepreneur.  I’m at my best when I feel like I’m an extension of a company’s executive team.  Entrepreneurs have to make quick, tough decisions and demonstrate exceptional leadership, sometimes all on their own.  This is the platform which I’ve proven to best participate. I like to be in the trenches with my clients, through both the trials and tribulation. 

T.H.E. What books or blogs are you reading today that you continue to learn from?

Berning: I just finished reading “Essentialism:  The Disciplined Pursuit of Less” by Greg McKeown, which is a book on focused leadership and learning to say “no.”  I frequently read industry blogs, but most consistently read BDO’s Technology & Life Sciences blog at BDO USA. I also find SaaS Capital to have an interesting blog about software companies.

T.H.E. You are very active in the community serving on boards and mentoring entrepreneurs. Why do you feel it’s important to do that?

Berning: I have a vested interest in this community.  I want to see our economic ecosystem flourish, whether as a mentor, Board participant or an angel investor.  If our economic ecosystem flourishes, so does our community.  It’s a win/win situation for everyone.  Also, I strongly believe in servant leadership.  I internalized this philosophy, which enriches the lives of individuals or organizations, and ultimately creates a more just and caring community.

T.H.E.: How would you describe the entrepreneurial and technology communities in Cincinnati? What gives you optimism about the future?

Berning: The entrepreneurial, and more specifically, the technology climate in Cincinnati is still perceived by most outsiders as immature.  Whether that’s factual or perceived doesn’t matter.  It is the perception.  I don’t think it’s an unfair assessment.  I consider Cincinnati an emerging market with a lot of promise so long as we continue to attract and retain talent.  Programs and associations such as VentureOhio and Third Frontier give me optimism for the future.  These programs are essential to the funding gap that exists in our community.  Further success stories in our region will also increase U.S. awareness.

T.H.E.: Is there a company or organization that you look to as an example of doing it the right way?

Berning: Good question, tough question.  There are several companies that demonstrate the right way of doing business.  I believe BDO is one of them.  Our core purpose is “Helping People Thrive Every Day,” and it embodies our entire culture.  Since the development of our CLIMB strategy five years ago, our growth has been 24% YoY, which is impressive for a $1.2B professional services firm.  In lieu of naming companies, I’ll defer to organizations that practice strong core principals of transparency and inclusiveness, choose accountability and people first, embrace change, and are laser focused.  In my experience, successful companies today generally practice most of these core principals.

Sense Diagnostics


2fe2c501-3a58-4e3f-a938-72c46d26a9daUpwards of 25 percent of the four million annual ICU admissions in the United States experience neurological complications. Half a million ICU admissions are due to brain diseases and 75 percent of these experience clinical worsening due to brain bleeding or swelling. Beyond the ICU, there is no convenient, non-invasive method for brain monitoring in ambulances, emergency departments or operating rooms to detect active bleeding. With these medical challenges in mind, a team of emergency medicine physicians and neurologists at the University of Cincinnati set out to develop a reliable, non-invasive monitor for medical conditions of the brain, specifically bleeding. In 2013, Sense Diagnostics was born to commercialize their technology. One of the company’s founders is serial entrepreneur Dan Kincaid, who is also a member of the Queen City Angels.

Over the next two issues of The Halo Effect (T.H.E.), we will interview Dan to find out more about him, his latest venture and the progress of its technology and what’s next for the three-year old company. In part one, we focus on Sense Diagnostics.

T.H.E.: What is the science behind Sense’s technology?  

Kincaid: The Sense Diagnostic device uses radio waves to detect physical changes in the tissues of the brain.  It relies on the fact that the different tissues found in the brain have unique electromagnetic properties.  As changes in the brain occur, the device signal changes in characteristic ways.  We use our proprietary software to interpret these signal changes and provide information to clinicians in real time.

T.H.E.: In addition to you serving as CEO, who else is part of your development and leadership teams?  

Kincaid: Our director of R&D is Dr. Joe Korfhagen, a Ph.D. in Neuroscience from UC who has worked with the technology for six years.  He left the university in March 2016 to join the company full time.  Dr. George Shaw is an emergency medicine physician and Ph.D. physicist.  He assists in the development of the signal interpretation algorithms and theoretical basis of the technology. Dr. Opeolu Adeoye is a Neurointensivist physician at UC. He serves as medical director for the company and is responsible for clinical trial design and execution.  Dr. Matthew Flaherty is a neurologist at UC.  He serves as Clinical Director for the company, and he participates in clinical trial design, acts as liaison with the scientific and medical communities, and assists in development of new clinical applications for the technology.

T.H.E.: Where are you in the development of the company and its technology? How soon until it will be on the market?  

Kincaid: We started our first in human clinical trial in February 2017.  The study will demonstrate the safety of the device and give us further information on the usability of our current design in patients. We are also continuing the development of additional indications beyond detection of brain hemorrhage.  We anticipate kicking off a pivotal clinical trial next year that will lead to FDA approval within two years.  

T.H.E.: What is your competition? And how does your technology compare to what is currently on market?  

Kincaid: The need for our product comes from the way critical brain injuries are monitored today.  Currently, when patients with a brain injury come to the hospital, they receive either a CT or MRI.  If immediate surgery is not required, the patient is monitored either in the ER or the ICU.  The primary means of determining if there is continuing or new bleeding in the brain is a clinical exam.  The exam consists of the physician or nurse making a series of observations and asking the patient a number of questions. If a patient’s cognitive state deteriorates, the physician orders another CT or MRI.  Unfortunately, by the time these outward signs of active bleeding show up, much of the damage to the brain has already occurred.   

There are several companies attempting to solve the same or similar problems.  Two technologies are already on the market. Infrascan’s Infrascanner uses near infrared radiation to detect bleeds in the brain. Because near infrared radiation is absorbed rapidly by the brain tissues, this product can only detect a subset of hemorrhages – primarily those occurring near the surface of the brain. Brainscope’s Ahead product uses an EEG based technology. It is currently indicated only for minor brain injuries, not the severe injuries we are targeting. There are three other companies developing competing products.  Neither product is on the market and information about them is limited.  Based on what each has published, we believe that our approach will yield superior results.  

Next month, we will have part two of our interview with Dan focusing on his involvement with Sense Diagnostic and his perspective on the local entrepreneurial and funding ecosystems building in the region to support businesses like his.


In the last issue of The Halo Effect (T.H.E.), we provided part one of an interview with Dan Kincaid, co-founder and CEO of Sense Diagnostics. In part two, we find out a bit more about Dan and his involvement with the company, the financial support for company’s like Sense in Cincinnati, and the role of QCA.

T.H.E.: You are a serial entrepreneur and an investor. What made SENSE the right “next” opportunity for you?

Kincaid: I have been looking for the right opportunity for some time. My criteria were pretty simple, the company had to be solving an important medical problem; needed a product that could provide significant clinical improvement; had to lower the overall cost of care; and had to have a group of brilliant people associated with it who were passionate about seeing the product improve people’s lives. Equally important, the problem had to be one I could be passionate about solving myself.  Startups are too hard to get into if you are just trying to make money.  There has to be more to it to sustain your commitment through the hard times (and there are ALWAYS hard times).  

While these criteria were simple enough to conceptualize, it was hard to find one opportunity that had everything I was looking for.  With Sense, I finally found it.  Some three million Americans suffer strokes or traumatic brain injuries each year.  Many of these people either die or are left severely disabled. The Sense technology can lead to quicker detection of bleeds, which can allow doctors to start treatment sooner, saving lives and avoiding long-term disabilities for patients.  As I dug into the economics of the issue, it became clear that the product could lower the overall cost of care for the health system while saving money for hospitals and providing an excellent return for investors. Personally, I had experienced a situation where a family member could have been helped by the technology, so I was eager to jump in.

The clincher for me though was the people involved.  The team around this technology is one of the best I’ve seen.  They are all top-level physicians and researchers.  More importantly, they are committed to seeing this product come to market and making sure it delivers on it’s potential.  As physicians, they see these injuries everyday and know the value the product can provide.  As a group, they have a deep understanding of the biology and physics involved.  They are scientists who don’t flinch from looking at their findings, even if the data isn’t what they’d initially hoped.  They have a resilience that allows them to learn from setbacks and use that knowledge to improve the product.  Seeing the improvements they made even while inside the university told me they had the right mindset to be involved in a startup.

T.H.E.: How has your background in start-ups and start-up funding helped you with Sense Diagnostics?

Kincaid: I think having done startups and seed investing has helped me in many ways.  First, in planning the company and the development strategy.  I’ve had the opportunity to see companies succeed and fail over the last eight years through my involvement with QCA, UC’s technology accelerator, Innov8 for Health and Biostart. Knowing where some of the land mines are is useful in the early stages.  

Another benefit to my startup experience is in understanding how to present the opportunity to investors.  The first company I did, we were able to get outside investors, but I have to admit, it was largely in spite of the way we approached it.  We had a plan and knew the industry, but did not complete enough validation to really convince people.  We were lucky enough to find investors that worked through our shortcomings to understand the opportunity.  I was determined not to let that happen with Sense.  We spent a lot of time preparing for the raise.  We were able to do this by investing our own money in the company and being insanely frugal (“garbage picking” office furniture, renting as little space as we needed, using our own blood in our experiments rather than buying from a blood bank, begging favors from everyone I knew, etc.).  

T.H.E.: What are the benefits of building a med-tech company in Ohio?

Kincaid: We’ve received support from a number of people in the Cincinnati and Ohio startup world.  HCDC has been a huge supporter, allowing us flexibility in leasing space as we need it, introducing us to their contacts – especially in manufacturing and market research areas – advising us on funding strategy, etc.  We received a grant from the Ohio Third Frontier Validation Seed Fund that extended our runway and helped us make some significant progress that attracted investors. The Third Frontier supports many of our investors as well. QCA, Accelerant and GCIC all have funds that the state supports to encourage early stage investment in high tech companies.

Cintrifuse is an organization that we’ve only begun to tap into, but they’ve already given us connections for our next round of funding and have connected us with some of their partners.  I am looking forward to working with them more.

The Sense Diagnostics’ story is really the story of how the Cincinnati and Ohio startup support networks function. We’ve received advice, funding, technical support, flexible physical space, and market connections from a number of people and entities. The support and feedback has been phenomenal.

T.H.E.: What about the challenges?

Kincaid: In terms of challenges that come from being in Ohio, I don’t really see many.  The one area where I see some opportunity is in direct support for very early stage companies.  One example is in the area of grant matching.  Kentucky, and other states, often will match Small Business Innovation Research grants issued by the federal government.  Many high tech startups find themselves in the “valley of death” where they have a promising technology that has moved beyond the research stage at a university, but is not yet developed enough to draw private investment.  In the past, many of these product ideas would die at that point.  The federal government created SBIR grants to help these companies progress to the point where they can get private investors.  By matching these grants, a state can leverage the federal resources to enhance the chances of getting out of the valley.  Ohio does a number of things well, but I still see a number of technologies get stuck in no man’s land.

T.H.E.: How has QCA helped you with SENSE Diagnostic? Beyond the financial support?

Kincaid: Well before anyone thought about writing a check, QCA was instrumental for us.  Rich Grant came in during UC’s accelerator and told us where we needed help.  He introduced us to an electrical engineering firm that has been a core part of our team since 2013.   Dan Geeding has been instrumental in making capital connections and introductions to the Cincinnati health care system.  Bob Petrik gave our financial plan a thorough vetting, making a number of improvements along the way (as he always does). Roy Kulick has helped with feedback and suggestions on the direction for our development going forward. Jim O’Reilly challenged our thinking on regulatory path, which helped us better prepare for the FDA conversations. I could go on. There have been so many people inside QCA that have helped, and I don’t think a lot of companies realize what QCA offers. You’ve got 50+ successful people from all areas of business (finance, sales, technology, marketing, etc.) and each of them has extensive networks.  If you ask, chances are someone in the group can help or can get you to someone who will.

Beth Rader on Women and Angel Investing

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Beth Rader has been a member of QCA for over five years and is enthusiastic about the benefits of angel investing for investors, entrepreneurs and the community at large.  As one of the still relatively few women angel investors in the Cincinnati area, Beth recently shared a few of her perspectives with The Halo Effect.

Why are you a QCA angel investor?

The short answer is because it’s exciting to support our local entrepreneurs and the amazing new products and services they are developing.  It’s also an opportunity to earn an attractive return on my investment.

By background, I’m a CPA.  Over my career, some of my most rewarding professional experiences have involved advising start-up companies both large and small.  Angel investing offers the same sort of opportunity.   There is an incredible richness of new ideas from entrepreneurs who are very smart and very passionate.  

You are one of only a handful of women members of QCA.  Would you encourage women to become involved in angel investing?


Women have all the skills – analytical, strategic, technical, marketing, and interpersonal/coaching – that make a  successful angel investor.  Moreover, women can help make QCA an even better organization than it is today.

In addition to serving as an important source of capital to young companies, one of the key benefits that QCA offers young companies – and one that differentiates us from other investors – is the depth of experience and expertise that we can share with the entrepreneurs.  Women bring different perspectives, and those diverse perspectives mean better outcomes and greater potential value!  

Because of the proven benefits of diverse perspectives, QCA is now actively focused on increasing the diversity of its membership. Another of the women members of QCA, Sue Baggott, is leading that effort.


Why do you think there haven’t been more women in the group so far?

That’s a very interesting question, and one I’ve thought a lot about. I see several reasons that women have been slow to enter angel investing in the Cincinnati area.

First is women’s perception of the local angel investing landscape.  Women with the experience and resources to be angel investors tend to be savvy and independent, seasoned by many years in the workforce.  Women look at angel investing groups such as QCA and see predominantly men, which they associate with “Old Boys Clubs.”  They’ve already “been there and done that,” in terms of working in groups where they had to fight for credibility and respect, and they aren’t interested in repeating those experiences.   

There are also differences between men’s and women’s approaches to angel investing.  Many women don’t fully understand the angel investing model, and they think that the threshold for angel investing is higher than it really is.  But the more significant differences relate to risk tolerance and expectations.  Women in general have a lower risk tolerance than men, and they don’t relate to the concept of “play money.”  They invest for only one reason, which is to make money with a level of risk they consider comfortable. Also from that perspective, many women are skeptical about angel investment returns. They believe the success rate and the returns should be – and could be – higher than they are.  

In order for women to consider angel investing, they need to be able to influence the issues that concern them.  That means the opportunity to be actively and directly engaged in the process for selecting the investments, overseeing them, and influencing the exits.  Some of these ideas could be disruptive to “the way we’ve always done it.”

What about women entrepreneurs?  Do many of them seek angel capital?

Very few of the entrepreneurs that approach QCA are women, even though my perception is that QCA has funded a large majority of the requests that have come from women.  So the women that do “pitch“ to QCA tend to be very effective.  But overall, women entrepreneurs seem to lack awareness of angel capital as a financing vehicle.  

In addition, women entrepreneurs, like women investors, seem to be leery of Angel Investors.  They are reluctant to give up control to a group of men — perhaps as a result of prior negative experiences with male investors or negative reactions to behavior they’ve seen on Shark Tank.

So, what are your suggestions for attracting more women to angel investing in Cincinnati?

I think we have a tremendous opportunity right now to expand the role of angel investing in the Cincinnati area.  That will require taking advantage of the potential contributions of women, as well as other diverse groups.  

First, we need to educate more women about angel investing and engage their interest and intellect.  We then need to make them feel welcome and provide hands-on opportunities for them to participate actively in angel investing, perhaps starting on a trial basis at an entry financial level.  

On a national level, there are already many women actively involved in angel investing, including the leadership of the Angel Capital Association.  Columbus has its own women-led angel capital group – X Squared.  We need similar role models and critical mass here in Cincinnati, and I’m confident we can and will get there.

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

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


$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.

Angel View: Four Reasons Why Start-ups Should Consider Cincinnati

skylineOne does not have to look very far or search very hard to find news about why Cincinnati is a great place to start a business. Reporters and writers from national publications are touting the great resources in the city while start-up founders attracted to local accelerators and incubators in the city craft blogs with an almost incredulous tone about everything from the cost of rent to the availability of funding. It’s almost as if they have discovered something that they are unsure whether they are allowed to say anything or not. What they are discovering is a city and a community that are really excited about ideas and innovations, and wants to be perceived as not only the home of P&G, Macy’s and GE Aviation, but also a place for the next big thing in consumer products and analytics software. There is a general understanding that if businesses are successful here than the entire region benefits.

A year ago, Rodrigo Galindez brought his start-up Keego from New York to Cincinnati to join The Brandery. On his Medium page, he crafted a blog titled, "Why Cincinnati Matters for Startups." In it, he wrote,

"Building a startup is one of the hardest things you will do in your life, but these folks make things easier. You are not alone here, and everybody will make sure you are part of the family from day one."1

This is reason number one to select Cincinnati, a Midwest mindset.

Simply put, in the Midwest, we think a little bit differently than the coasts. We don’t see a start-up as one of thousands. We are welcoming, and we want entrepreneurs to be successful. Afterall, Cincinnati is listed among America’s most livable cities, best city to relocate to, best cities in U.S. for post-grads and best cities to raise a family. We want you here, and everyone is working to make it a great place to live and work. It’s not really a secret, but it may be a surprise.

Alex Bowman, co-founder of Casamatic wrote in a July 2014 blog about why he moved back to the city, "There is a growing startup scene that supports each other. I am constantly amazed at the support that startup receive in Cincinnati, from investors, resources, events and other startups."ii

This brings me to reason number two, a growing start-up infrastructure.

Queen City Angels, CincyTech, Cintrifuse, The Brandery, Bad Girl Ventures… these are just a few of the resources eager to assist entrepreneurs in their start-up journey. Sean Grace, a marketing professional in Cincinnati called it an “Entrepreneur-Friendly Environment” in a Techli blog.iii

"Entrepreneurial activity is quickly becoming a defining feature of Cincinnati. This is due to many different pieces all working together to create a cohesive set of advantages."

Cincinnati is home to 10 Fortune 500 companies, and while those same businesses have defined this region for decades, they are the same organizations rallying behind the entrepreneur movement, supporting the accelerator programs, providing executive leadership and mentoring, and investing money.

Capital is reason number three why entrepreneurs should consider Cincinnati.

Most articles and blog posts about Cincinnati’s capital resources, or any Midwest city for that matter, start off by comparing it the money available to businesses in Silicon Valley, Boston or New York. It’s not a fair or appropriate comparison. For one, Cincinnati is not trying to be like San Francisco or Chicago. We don’t have to be. It doesn’t cost as much to live here or build a business, and there are significant capital resources available to young companies.

A January 2015 Huffington Post article stated, "Cincinnati lays claim to a growing and vibrant startup ecosystem. Much of this success is due to what we are seeing across the United States with fewer barriers to entry, but the main part of Cincinnati’s success is due in large part to the venture funding access in the city."iv

Since launching in 2001, Queen City Angels has invested $50 million in nearly 80 portfolio companies, initiating more than $400 million in follow-on capital. CincyTech has invested $25 million in 54 portfolio companies resulting in $435 million in follow-on capital. The Brandery has helped raise $78 million for 45 companies, and Cintrifuse has a venture fund with more than $50 million to invest. River Cities Capital Fund has nearly $500 million under management and has made more than 100 investments, and since 1990, Blue Chip Venture Company has invested approximately $1 billion in more than 500 financing rounds of 170 portfolio companies.

These aren’t all the capital resources available, but it provides a partial view of what is available from seed stage to venture stage investments. Hundreds of local companies have benefited from the dollars, as well as the business guidance from executives and investors who know what it takes to start and build a successful business.

This brings me to reason number four… a growing list of successful start-ups. Whether it’s receiving capital to take the business to the next level or growing the business to the point of an exit, Cincinnati has a growing list of companies that are proving why Cincinnati is a great place to start a business.

AssureRx, ChoreMonster, The Business Backer, DotLoop, Everything But The House, Lisnr, iSqft, Ecolibrium Solar… these are just a few of the businesses with foundations in Cincinnati that have received local and national attention for their funding, acquisitions and/or growth. Cincinnati played a role in each of their success stories, and the list will continue to grow driven by a city and community that has rallied around the startup scene; an emerging startup infrastructure with people and organizations that are eager to help; and angels and venture capital investors that provide support beyond the capital resources.

Obviously, there are more reasons to come to Cincinnati, from a successful urban renewal plan, and creative talent, to top-notch universities and an emerging art and restaurant scene. Honestly, our entrepreneur environment is relatively young, and we have a lot of room to grow. But if there is something we are good at in the Midwest, it’s building stuff, and we are off to a pretty good start.