KINGSTON–So far, it’s four and counting.
That’s the number of regional companies that have gotten a much-needed financial boost from an angel-investment fund to take their ventures to a whole new level.
The founders of the Hudson Valley Startup Fund were on hand Wednesday morning at the Ulster County Regional Chamber of Commerce breakfast at the Best Western Plus to update entrepreneurs about their member-managed seed capital fund, how it works and who can benefit.
To date, Eco Shrimp Garden, uStadium, Burbio and StateBook International, all burgeoning local companies with high-growth potential, have gotten anywhere from $50,000 to $175,000 to help them expand and ultimately be part of driving the local economy.
Johnny LeHane, the co-founder of WAKA Kickball and Social Sports and the first investor in the Hudson Valley Startup Fund, said the idea is to fill the void left behind by IBM and create a new environment of dynamic companies that have the potential to “blow up and change their industries.”
Since IBM started cutting jobs in the Hudson Valley more than 20 years ago, upwards of 25,000 people have gotten the ax, said LeHane, a former software engineer at AOL.com.
Like his father, his goal was to relocate to the Hudson Valley after college and land a job at IBM as an engineer.
The door never opened, but he went on to become a successful entrepreneur and eventually hooked up with another Hudson Valley doer and shaker, Tony DiMarco, the former director of strategic initiatives at Marist College and managing director at the Global Center for Social Entrepreneurship Network.
Together, they joined forces and launched the Hudson Valley Startup Fund, the only one of its kind in the Mid-Hudson region.
The fund is overseen by 44 accredited investors, each of whom has invested $25,000 and are themselves accomplished entrepreneurs.
About half are from Dutchess County and a quarter from Ulster County.
“It’s a form of paying it forward. It’s about investing your time, your experience, your network…to help make successes happen,” LeHane said.
“We service the nine counties from Westchester north to Columbia and Greene (counties). Our goal is to grow companies and ultimately jobs in the Hudson Valley. If we make this a place where you can have a great business network and you’ve got that access to New York City, then you’ll be hiring long-term.”
Hudson Valley Startup Fund’s central mission is to nurture startup companies and match capital, mentorship and networking with entrepreneurs who have drive, talented teams and innovative ideas, LeHane said.
The investors get together once a month to hear two 15-minute deal pitches.
“We get the deal flowing, and then we screen and go to companies to see if they’re ready. When they are ready, we start working with them on that communication piece and how to best present and then we get them in front of our members at that monthly meeting.”
If the company meets all the criteria, the process then moves to the due diligence phase.
Investments can range between $50,000 and $250,000– typically as convertible debt, meaning it will be converted to equity at a later date.
At present, 306 companies have applied for funding, with 65 meeting the fund’s qualification criteria, LeHane said.
In order to be considered, companies must be locally based, have a minimal viable product and a form of market traction or some amount of revenue.
Thirty-four members in industries from clean tech to agricultural systems to food and beverages, so far, have come have come in to pitch.
LeHane said not all are good fits, but the idea is to help entrepreneurs eventually get there.
“We really have honed our skills in helping them identify the most likely path for them, whether it’s the path to the correct kind of capital, whether it’s investment or traditional financial vehicles or hitting the grindstone a little harder, whether it’s augmenting their team or modifying their business model.
“At its heart, it’s learning how to communicate their idea and their business to those right financial partners and those right customers,” he said.