Seed Stage Capital Fund to Keep Best Ideas Moving Forward
Fueling “what’s next” on the Space Coast is how Mark Mohler describes LaunchPad40. Far from seeing a charred landscape left by defense cutbacks and the end of the Shuttle era, Mohler believes that Brevard County’s creative and inventive legacy is waiting to be reborn, like a Phoenix, in new start-up companies.
To Mohler, economic downturns can be golden opportunities. Sighting similar experiences around the world, Mohler points to an article by Daniel Isenberg in the Harvard Business Review. One of many cases Isenberg highlighted: “Today, Finland is witnessing an upsurge in entrepreneurship, in part because corporate giant Nokia is in the midst of shedding 10,000 high-quality jobs. As it happens, the ‘Nokia Bridge Program’ is a socially-minded strategy for both easing the pain of layoffs and intentionally supporting the more talented.” Intentionally supporting the “more talented” is exactly what LaunchPad40 is designed to do.
“Florida’s Space Coast is virtually unrivaled in technical talent and access to the benefits of large company R & D and government research. What it has historically lacked is the seed-stage capital necessary to serve as the fuel to take ideas to the next level of commercial development,” Mohler explained.
Unlike large venture capital groups, LaunchPad40’s model is to identify and nurture those entrepreneurs who have marketable ideas, but are in the earliest stages of development. Almost like prenatal care, this formative period is when most promising ideas must survive and then thrive or simply fade from existence.
Mohler was, and is, a corporate tax lawyer. He came to the Space Coast as general counsel for a company preparing to go public while he was working for one of the nation’s largest law firms. It was his first opportunity, beyond legal consultation, to get his head inside the world of starting and scaling a new company. “Like a lot of people I got the start-up bug,” he conceded. So he launched a company in Boston, but was drawn back to the Space Coast. “It has always been interesting to me,” Mohler said. “From a technical talent standpoint, Brevard has the highest percentage of engineers per capita in the country. Yet it was always swinging below its weight class in entrepreneurial activity.”
Continuing Mohler added, “Early stage product and company development is not something that larger companies manage well – which is something most of them are aware of – therefore you see out-licensing.” This is where a corporation like Harris allows a smaller more nimble company, like AuthenTec, to run with a concept they initially developed but opted to not bring to market. AuthenTec was recently bought by Apple for over $350 million.
“What I saw during my career was that much of the early stage development was facilitated by other entrepreneurs, not by government or by universities. Up-and-coming entrepreneurs were connecting through social media and organic groups like Meetup.”
The initial step Mohler took was establishing a virtual platform where budding entrepreneurs could meet. Unbeknownst to him, there was another local group with basically the same direction that was gathering momentum called “Coders Hackers & Founders.” This group was made up primarily of people within larger companies that had interest in collaboration and moving ideas to the marketplace. C H & F now has about 200 members and Mohler’s group, Startup Spacecoast, has 80+ members.
They began to combine their efforts in what Mohler described as a “three legged stool.” First, it begins with an educational networking component — a forum — which demystifies the process of starting a company. This includes virtual meetings, but primarily focuses on gatherings that are interactive and informative, with industry experts who can advise and inspire those who want to move towards a start-up.
The second is creating an actual physical sight or co-working space where the new businesses can be launched, called “TrepHub” which will be a 501(c)3. This environment also provides co-op opportunities to help these highly skilled and talented people for whom the world of launching a start-up is undiscovered territory.
The final step is LaunchPad40, which is the capitalization side of the equation – finding relatively small amounts of capital to move from idea to prototype or business model stage. Mohler explained, “Our goal is to help build the concept to where they are prepared to approach angel or venture investors. Early stage investment is ‘high risk’ and the earlier the stage the higher the risk. That is why there is such a void in that kind of investment. We are putting together a group that understands the importance of this type of fund and the potential it has as an investment and as a way to develop the talent resources in the area.”