FourBridges’ leader, new tech point man on a rising breed of Southern entrepreneurs, upcoming opportunities

The leaders of Chattanooga-based investment FourBridges Capital Advisors earlier this month announced they had recruited Atlanta technology executive Doug Johns to be a senior advisor. Johns is a former senior executives at Internet Security Systems and Compaq Computer, among others, who now is chairman of HDJ Wireless Enterprise, an Internet of Things venture that runs Atlanta-based sensing and control networks company Nivis.

Adding Johns to the team gives FourBridges a much more extensive reach into the Southeast’s tech and telecom sectors, especially in its biggest city. Scanning the region, Johns says he sees opportunities aplenty, especially when it comes to working with companies who need advice and expertise just as much as they need to do a deal.

Johns and FourBridges Managing Partner Frank Williamson recently took some time to chat with us about their news and the entrepreneurial landscape of the Southeast. Here are some excerpts from our conversation.

Doug, how much of time will you devote to FourBridges and what are your main priorities as you get started?
Johns: I’ll spend at least half of my time on FourBridges, making connections with companies around the region. Ideally, I’ll be locating companies with revenue — that really separates the sheep from the wolves — and some level of EBITDA, which will say to me that this is a real company.

Too often, tech companies have a set of PowerPoint slides that can make them seem fabulous but there may not be much more to them than those slides. A big part of my mandate will be not to dig dry holes.

When it comes to young entrepreneurs, particularly in technology, have you noticed a change in tone over the past decade when it comes taking risks and starting companies?

Williamson: Absolutely. Many young people have seen that, if their idea doesn’t work here and now, there’s a chance it will work somewhere else down the road if they keep working on it. There’s more of a California spirit to them now, one that looks at failure as more of a learning experience than a tattoo of shame.

How does that change what FourBridges does?

Williamson: It changes our potential client base. There’s a whole lot more velocity to what entrepreneurs are doing in terms of starting something that they intend to be an asset rather than an occupation. Many more of them are happy to start a business, grow it as fast as possible and exit.

It sounds like you now have to find these entrepreneurs earlier in their careers.

Williamson: Yes, we do. Also, the fact that more people across the South are building companies this way is a testament to the health of the ecosystem. If they build and sell that asset, they’ll then be able to redeploy their cash. For us, that means we need to have something more relevant to say to young companies. We think there is a role for us much like there is for accountants and lawyers. We can help prepare businesses for big growth.

We love the ECD aspect of what we do. It’s my belief that, in three to five years, a lot of the investments made recently in the entrepreneurial ecosystems around the region will be realized. There will be many exits and larger raises. That’s why Doug has come on with us. There are a lot of stories to tell and enough companies are growing into a position where an intermediary like us can be a real help.

Johns: Entrepreneurs’ attitudes to deals also have changed. There was a time when transactions were much more adversarial, more mercantile. Now, entrepreneurs are looking for advisors for a while; they’re not looking for a deal right away.

Younger entrepreneurs are more interested in a relationship. They maybe have heard from their parents stories of when things went bad. They know it’s important to have a relationship, that you need someone who has ideally worked in their shoes.

News wrap: AngelSummit in Chattanooga, a VISE upgrade and handling the stresses of entrepreneurship

As always, there’s a lot of compelling entrepreneurial news emanating from the Southeast and beyond. Here are a few things that have caught our collective eye in recent days.

Chattanooga will play host next month to AngelSummit, a two-day gathering run by global group Startup Angels that will tackle a variety of big ideas, many of them in the form of breakout sessions and workshops. Organizers expect more than 250 people to attend.

“Part of what we need to do is storytelling,” Jump said. “We need to make this kind of emotional. The reason people become startup investors isn’t just to make money. It’s because either they really believe in the entrepreneur or they’ve been an executive in that industry and they see it’s ripe for disruption—or, like in Chattanooga, they really want to back the growth of the innovation community.”

Chloé Morrison has much more at nooga.com.

Vanderbilt University leaders have strengthened their VISE, upgrading the Vanderbilt Initiative in Surgery and Engineering, a collaborative push to break down barriers to surgical innovation, to a full-fledged institute. The move comes shortly after the four-year-old program, which now is home to five full-timers and 29 researchers and grad students, was chosen to receive more funding under Vanderbilt’s $50 million Trans-Institutional Program.

And finally, here’s an interesting read from Forbes contributor Kelly Allan on the fact that “there are very few places where the fears, and sometimes panic, of entrepreneurs and small business owners can be validated and addressed.” Allan passes along some resources and the wisdom of others for when the stresses of entrepreneurs get exceptionally heavy.

Strike partners: Nashville FC’s president connects with a startup specialist to prepare the club for more growth

Nashville FC — like so many stories in Music City — started with a crazy dream. And Nashville FC — like so many start-ups everywhere — was a wild, ambitious idea in 2013.

After the sudden and quiet demise of the semi-pro Nashville Metros, a team that had survived for years with only occasional flashes of publicity, Tennessee’s capital was left without a soccer team and at a time when soccer was more popular than ever before.

Enter Chris Jones. A sports fanatic thirsty for games in his hometown — he loves to emphasize that soccer is a “civic sport” around the world, with fans’ ties to their club and their hometown being inextricable — he wanted soccer, at some level, back in Nashville. Not wealthy enough to finance such a venture on his own, he sought a different model.

He was inspired by FC United of Manchester, an English club started by fans of super-club Manchester United miffed after the team was bought by the Glazers, the American billionaire family that also owns the NFL’s Tampa Bay Buccaneers. Smith began exploring the notion of a supporter-owned club. That design is not terribly unusual in Europe, but is virtually unknown in America, where the publicly held Green Bay Packers are the only real analog.

Smith said he had almost no guidance, except for some communication with the people in Manchester. By the time initial meetings with other interested people were complete and the ball was rolling, there were only four months until the start of the 2014 National Professional Soccer League season. The founders’ group made it, even though the first slate of games were played in silk-screened t-shirts and virtually every other aspect of the club was quickly cobbled together by necessity. Better yet, the first season was a somewhat surprising success. The supporter-owned model gave instant buy-in (literally) to fans and took some pressure off the team in Year One.

“If we had been a traditional club, there would have been suspicion,” Jones said on a recent early Saturday morning at Printer’s Alley’s Skulls’ Rainbow Room, where he gathered with a couple dozen other fans of English side Chelsea to watch the Blues’ match against Everton. “But we weren’t just another club.”

Enter Marcus Whitney, the Nashville startup superstar and now the CEO of health care-focused incubator Jumpstart Foundry. Whitney — who is a Tottenham Hotspur fan and was as out-of-place at a Chelsea bar as this Fulham-supporting reporter; Spurs fans gather at Dan McGuinness, for what it’s worth — was an early member of Nashville FC but, because of his busy schedule, actually didn’t attend a game until the final contest of that 2014 season and met with Jones. With his entrepreneur’s eye, he took a look at how things were developing.

“The revenue mix was pretty healthy and there was a path to scaling that,” he said.

While Jones had the idea and is president of the club, Whitney saw that what NFC needed was structure. And now, as chairman of the board, that’s where his background has proved useful. Running a young business and the club aren’t exactly the same — in Nashville FC’s case, the customers are the backers and there are no big-time venture capitalists behind the scenes — there are lessons to take from the startup world to the soccer pitch.

“What I really do at Jumpstart is mentor startup founders. It’s my job to help (Jones) evolve from a founder to a business leader. I did that for seven years and made six years of mistakes,” Whitney said.

Jones said the process has made a difference and eliminated mistakes he knows he would have made. And in fact, he says, two years ago, he was “just a guy on the Internet” but now he receives calls for advice from people all over the country who want to start clubs, either with a traditional top-down model or following the grassroots model.

“If I had the time, I could have made some supplementary income as a consultant,” he joked.

Whitney has helped implement all manner of record-keeping and data management tools, helping NFC track member participation and follow up with game-goers to take the next stop and become members. The club also has created an out-of-town membership for people from all over the world inspired by NFC who got on board early but (for obvious reasons) can’t attend games.

Still, most major decisions are made by the members. The club’s logo was approved by them and the widely lauded jersey design was voted on by those with a stake. A sponsorship from multinational oil distributor Delek US Holdings, which is based in the Nashville area, raised impressed eyebrows from outside observers, giving credence to the little club that could. When a team from Pennsylvania sniffed around Greer Stadium for a new home, a shrewd and aggressive grassroots PR push by NFC nipped the idea in the bud and reinforced the “Our Town. Our Club.” mantra to members and the city at-large.

There are currently 450 club members and games (which moved from Vandy’s intramural fields to Vanderbilt Stadium for the 2015 season) have regularly drawn a couple of thousand people. Newly elected Nashville mayor Megan Barry has been photographed in an NFC scarf. And Jones and Whitney are targeting new demographics; ads for the club have aired on Spanish-language television stations and Whitney said inroads are being made into the Kurdish community.

Looming is the possibility of promotion up the American soccer pyramid. Upper leagues (even those below the top-level MLS) require a majority owner with a certain net worth. Of course, exceptions are possible — the MLS said expansion teams had to play in soccer-only stadiums until the Seattle Sounders sold 35,000 season tickets and were allowed to share a home with the NFL’s Seahawks — but Jones and Whitney said the membership is aware of what might be on the horizon.

Like startup types all over the world, NFC’s ground-floor group is smart enough to understand that with growth comes the possibility (or necessity) of a sale.

“We’ve been clear with them from the beginning,” Jones said. “The response has been positive and they’ve been realistic.”

Social media, dogs and building a digital community: Q&A with Ryan Carter

Did you know September 5 is National Camping with Dogs Day? I came across this national day that advocate the importance of being active with your dog, and found out that it is a creation of Nashvillian Ryan Carter, president and CEO of Parachute Media. The holiday is also an extension of a community he started just six months ago called Camping with Dogs.

What struck me was that though it’s a digital community, the critical and necessary component of it is physical activity, and more specifically in the great outdoors.   I contacted Ryan and asked about developing an engaged community in just six months and what he learned from the process:

Q. How did ‘Camping with Dogs’ come about?

campingwithdogs merchA. The idea of Camping With Dogs came in November 2014 around 2am. For some reason I found studying micro-communities on Instagram more important than sleeping. Initially, I wanted to see if I could take a few passionate micro-communities or simply put, hashtags, and drive all the engagement to one focal point. I decided to begin with one of my own passions; being active with my 2 dogs, Bailey and Cooper. The idea was and still is very simple- to share experiences that build a community around people who love to hike and camp with their dogs. Think, “Life is good,” but for the outdoorsy dog community.

Q. Why did you decide to create National Camping with Dogs Day?

A. We came up with the idea of National Camping With Dogs Day as a day to promote being active with your dog. If bacon, cheesecake, and guacamole can all have their day, and they absolutely should, why not have a day about being with your dog?

In its first year, we wanted this to be an event that could stand on its own which meant we needed proper branding. We contacted Valerie Jar who created the National Park badges for Nat Geo because she has a natural style that fits with our brand. She hit a home run with the design and we will have a few items for sale with a portion of the profits benefiting The Pedigree Foundation. 100% of everything The Pedigree Foundation receives goes directly to shelters that help dogs in need. That’s something we can get on board with!

Q. What do you want this National Camping with Dogs Day to become?

A. This might be premature to speculate, but I think the effect of this day will be increased conversation about dogs sharing more trails and parks that have otherwise been off limits. Our community is very active on social media which could help change the way the parks system views dogs. It can’t be the Camping With Dogs brand that takes credit for any of this. It’s community driven and it would not be possible without their voice. Maybe one day in the future, there will be enough support to open up all the National Parks on September 5th for dogs and their owners to enjoy parks they are typically not allowed in. Who knows. We’re going to let this grow organically and see what happens!

campingwithdogs photo

Q. There is obviously now an engaged community around Camping with Dogs, which wasn’t a formal group this time last year.  What was your process?

A. Social media, primarily Instagram, is the main driver for Camping With Dogs. I started building this brand without a product to sell, and I think that has been a great learning lesson. Most brands will create the product first, try to sell it, and hope to build a strong community around the product. Reverse engineer that process and you have what Camping With Dogs did.

  1. Build a community around a lifestyle that people are passionate about. That means you have to actually work on being a thought leader and not some brand with a shiny object looking for quick sales.
  2. Engage with fans and listen to what is most important to them. These are not customers yet. In fact, don’t even look at them as customers. Give a damn about their day to day lives.
  3. Now go build the product your fans and soon-to-be customers are asking for.

We have had a great deal of success using social media to build our community and drive sales.

Q. What are some things you’ve learned?

A. Here’s my five insights from the last six months since creating Camping with Dogs:

  1. We share content from normal people with an average number of followers. Doing that once won’t yield many results but repeat that almost 600 times and you’ve got an army of highly engaged fans.
  2. Our mark is easily identifiable with the National Park trail system. People ask for the mark on everything from bandanas to stickers, to shirts, and even dog bowls. People want to wear our product so they can identify with a culture and lifestyle. Our brand mark is an extension of their personality so it’s not a difficult ask when we announce a new product for people to buy it.
  3. We try not to be pushy with sales. Our focus for sales, especially on Facebook, is to create quality blog content which drives people to our website where we can retarget them based on their persona and behaviors. That said, almost 70% of our sales come directly from link clicks from our Instagram bio. We are very prepared to launch ads within Instagram from Power Editor when the time comes.
  4. We educated people early on that if they want their picture featured, they need to use the hashtag #campingwithdogs. In early January 2015, the hashtag had been used less than 200 times in the history of Instagram. Now it’s been used over 30,000 times. People don’t want to use 20 hashtags all saying the same thing. They want to only use one that sums it all up. We basically took 20+ hashtags all saying the same thing and told people the only one that matters is #campingwithdogs. It worked.
  5. Our community does the marketing for us. When they buy our products, they post about it. When they go camping, they post about it. When they go hiking, they post about it. When they’re thinking about doing anything with their dog, they post about it. We have turned our fans into content generating machines and that’s been a key part to our success.
    camping with dogs post

 

 

LaunchTN publishes real-time investment activity data in Tennessee

Launch Tennessee (LaunchTN), an economic development related public-private partnership, measures startup investment activity data every year and releases annual reports based off the data. In an attempt to bring more transparency to quarterly investment activity, LaunchTN is tracking investment activity data as it happens in this public collection of spreadsheets. 

The data can be extremely helpful for a founder who is trying to measure the early-stage investment landscape, because it gives founders and investors a good general idea of what industries are being funded, and which investors are active.

Most recently, LaunchTN reported that from their data, Tennessee had its first $100M quarter ever.

 

Screen Shot 2015-07-09 at 10.14.28 AM

However, not everything gets reported to the SEC. Therefore, LaunchTN has to pull non-institutional funding data from different sources, including media sources. If Southern/alpha, Nashville Post, The Tennessean, Milt Capps, or the Nashville Business Journal interviews someone who says their company has raised $5M dollars, and the media entity reports that they’ve raised $5M, it doesn’t necessarily mean they have secured $5M. It also doesn’t necessarily mean the founders are being dishonest. It is, after all, private capital and they don’t have to report it in some specific instances (another rabbit hole for another time).

When LaunchTN takes data from news/media sources, it means that the company likely hasn’t filed its capital raise with the SEC, but it doesn’t mean the money does not exist either. The margin of error gets lower when companies decide to file with the SEC. LaunchTN discloses in the data table all its funding information sources.

LaunchTN published the data table to the public after the entity reported capital investments topping $276M with 31% investment growth last year. The table measures investment since 2012.

Credntia, the ‘missing piece to a virtual wallet’ expands through Alabama, Tennessee

“Your identity is your most valuable asset.” That phrase rings true for anyone who has ever had their ID stolen, or who has lost their wallet on New Year’s Eve, or who has been pulled over only to discover they have casually and carelessly forgot their license at home.

Whatever the case may be for leaving a valuable piece of information behind, it’s always serious in the moment.

Credntia, an app that allows users to save important forms of identification, has the above phrase plastered across the homepage of the company’s website.  The cofounder of the app, C.J. Adams, is expanding services in Birmingham, Alabama and Nashville, Tennessee.

Adams, a Chattanooga native, said that the app currently has the capacity to hold information from Driver’s Licenses, Student IDs and car insurance cards. He said the app plans to feature medical insurance and passports starting as soon as next month.

He described the process of digitizing identification as “the missing piece to the virtual wallet,”  explaining that although Apple Pay, Square Cash, Venmo play lucrative and important roles in sending electronic cash, it doesn’t solve the entire problem for users. “I’d love to be able to walk out of my house with only my phone,” he said.

To setup an account, users add a “credntia,” or an identity credential to their profile. To upload a driver’s license for example, the user takes a photo of the front, back and barcode. Adams explained that the licenses use OCR technology, a three step verification process that proves that the ID is real and that it belongs to the right person. The verification process takes three to five seconds, according to the founder. “We want to make sure we are not a platform for fake ID’s or those kinds of things,” he added.

Adams said that digitizing identity has to be introduced on a state level, where a government associated advisory board decides on acceptable forms of identification for state citizens. So far, the app is available in Alabama, but Adams is in current talks with Tennessee government to expand to Nashville, Memphis, Chattanooga and surrounding cities.

Fortunately, technology may be on Adams’ side. The founder said that other states are embracing digital identity as a more efficient answer to identification.

“The nice thing about what we are proposing is there’s a lot of gray area on whether this is an acceptable form of identification. Delaware and Iowa are actually already issuing mobile ID’s. The way things are going with it, we do have a little bit of precedent to move us along.”

He added that states are beginning to see that digital IDs can actually be more secure for identifying individuals. It’s easier to weed out fraudsters via the Credntia platform. Once the ID is expired, it can prevent fraud and forgeries than that sort of thing, he said, adding “It’s a lot more secure. You have people who think their physical ID is a lot more secure but it’s a lot easier for me to take your wallet and have your ID than for me to steal your iPhone, figure out the passcode to get into your iPhone, then figure out everything to get into Credntia.”

Adams said that the company’s direction may be headed toward linking up with a payment platforms and expanding the application’s features to include notifying users when their license, insurance, passport, etc., is about to expire.

‘The whole point is to not be like Amazon’

Bezar (and former Fab.com) founder Bradford Shellhammer took to the Pandoland stage earlier this morning to talk about branding designed to empower young entrepreneurs.

In his interview with Sarah Lacy, Shellhammer talked about love, loss, growing his two businesses and having some fun along the way. He started by saying that a core aspect of the design world comes from artists, designers and creators.

“They care about what they make over how many they sell,” Shellhammer said, referring to the balance between building a fashion business and engaging with designers involved in the marketplace.

Many in Silicon Valley aspire to grow a company quickly with large amounts of capital. He said on stage that he doesn’t care about how big his current company gets.

“The whole point is to not be like Amazon,” he said. “I think it’s a big business, but I’m not going to make bold statements. I focus on slow and steady and sustainable growth.”

The former co-founder of Fab.com mentioned that e-commerce companies often run into a bad cycle, not one of innovativion. On Shellhammer’s current startup, Bezar, he said he dreads the idea of e-commerce turning into “regular retail.” The company is much more focused on the health of the business — and what it got to where it is today — rather than how fast it can grow.

“Empower designers to get their products into the hands of consumers,” he said.

Shellhammer also talked briefly about the Fab break-up with his Fab.com co-founder, Jason Goldberg. He said that both men have gone on to create their own things. “When we get together, there’s almost this feeling of ‘We survived’ and there’s love there,” he said.

Lacy said Fab.com was the “first dead unicorn,” referencing companies who raise lots of money and hype only to later come crashing down to reality. Shellhammer said he learned to stay focused on sustainable growth.

 

36|86 startup pitch competition – Group 5

Here’s a recap of the pitches from the last group of startups presenting their concepts to the 36|86 crowd. (Here’s our take on this morning’s fourth group.) Be sure to check back later for info on the overall winner.

Scorebird – App that allows high school sport spectators to keep track of live sports scores. Will be in 200 schools this year.
Servature – A redesigned survey platform to help companies get feedback on the data they are collecting. Users include Bonnaroo and HGTV.
TransitScreen – Helps users see real-time transportation information and ETAs to help you find the fastest route to get to your location.
UtilizeHealth – Matches patients with the right physical therapists all over the country so they can go through the healing process more efficiently.
Avaindo – Travelers connect with local workers to learn about their business work lifestyles and identify skills.
VirtualSecurity – Security software adds a layer of data encryption without hiring an expert in security.
WorkAmerica – A skilled worker job site that represents 40 million jobs. The company describes itself as the “Linkedin for skilled trade.”
YouRoam – Allows you to make and receive calls on your phone anywhere in the world for free.
ZipFlip – An online marketplace to sell cars. Sells reliability, trust and a tight-knit community.

Our pick of this bunch? ZipFlip
Our score: 14 out of 20 (Opportunity 5/5 – Innovation 3/5 – Design 2/5 – Polish 4/5)

We are going with Chattanooga-based ZipFlip, which earlier this spring also won the Hackomotive pitch competition in California. I think the co-founder of the company was right: It’s really hard right now to find a trustworthy place online to sell your car, but lots of people do it because they want the most return.

36|86 startup pitch competition – Group 4

The fourth batch of 36|86 startup pitches forced us to make another hard call. The ideas were incredibly polished this morning. It will make the final audience choices pretty tough today. Here’s who just presented and who we thought rose above the rest.

Kanga – A delivery service for anything. Co-founder and CEO Everett Steele pitched the Atlanta-based company that is currently expanding to Nashville. Its newest partner is Delta.
MakeTime – Lets manufacturers, designers and makers buy and sell CNC machine time by the hour.
MetroTech – Takes traffic data and generates analyses to help cities better manage traffic.
NeuroPlus – Helps kids with ADHD learn through focus games that develop self control. Recently partnered with popular game-maker Rovio.
PartPic – Searches for car replacement parts. Users snap photos of parts they are looking for; PartPic organizes and defines it. Team has closed a $1.5 million seed round.
PriceWaiter – Adds personalized pricing to online shopping. The team is looking at a $300 billion market opportunity.
Rivalry – Software for sales teams to improve their “one on ones.”
RootsRated – Platform for outdoorsy types to curate outdoor experiences for visitors across the country.

Our pick from this group? NeuroPlus
Our score: 19 out of 20 (Opportunity 5/5 – Innovation 4/5 – Design 5/5 – Polish 5/5)

This round was a tough one, too. We’ve covered several of these companies before. Their product ideas are strong and their pitches were very polished. For the sake of our ratings, I think NeuroPlus did the best. The team showed off a product, told us how it worked and gave us the data behind the findings. It’s a device kids wear to improve their focus through games.

36|86 startup pitch competition – Group 3

Here’s a snapshot of the last of today’s pitch competitor groups. Several among them addressed some big potential markets, which made Kelley Boothe’s job of picking a standout quite tricky. (Our review of the other groups are here and here.)

Florence Healthcare – Makes software for the clinical trial space
PhotoSwipe – Photo and screen-sharing for photos app that claims 600,000 users and can drag and drop between iPhone and Android devices
GameWisp – A platform for gaming entertainers and celebrities that hosts gaming entertainment
GoodDoneGreat – A charitable giving and tax app that helps users keep track of payroll deductions so individuals can feel good about giving more
GraphStory – A platform for data analytics that lets customers more easily access their data in real time. Is asking for $2.5 million.
Ground Floor – Makes private lending public, which its co-founder said is a $70 billion market opportunity. Uses Reg A+ to help unaccredited investors.

Our picks: GoodDoneGreat and Ground Floor
Our scores: 14 out of 20 — GoodDoneGreat (Opportunity 3/5 – Innovation 4/5 – Design 3/5 – Polish 4/5) and Ground Floor (Opportunity 5/5 – Innovation 4/5 – Design 3/5 – Polish 2/5)

From Kelley: GoodDoneGreat was impressive and I think Ground Floor has the potential to be huge — it probably has a bigger market opportunity. It may be more risky but I’ve been studying Reg A+ and I think there’s’ a lot of potential there. I’m going to give the two a tie.