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Yearly Archives: 2018
SOURCE: Orlando Business Journal
By Matthew Richardson – Staff writer, Orlando Business Journal
Orlando Business Journal zeroed in on two M&A deals in Central Florida, talking to the top local executives to get insights on what led to the decision to sell their companies — or a majority stake in it — and more:
Josh Brown, founder and CEO, PowerDMS
What led to the decision to form a partnership with Frontier Capital? We were about three years into our investment with Ballast Point Ventures and we saw a lot of growth through that investment. We were aware of the market opportunity for software and services companies. We serve a very niche customer base, like law enforcement. The knowledge of the growth and being well-connected to the opportunity that was in front of us in terms of the market as it was scaling helped us know it was the right time.
Affordability, tech talent pools and access to capital top the list.
It costs $2000 to rent a U-Haul in San Francisco. Rent one anywhere else and it’s roughly $100. This year the Bay Area will lose more people than any other region in the country. The reason is a variety of factors; affordability, access to opportunity and technology making it increasingly easier to work from anywhere.
When you’re considering where to relocate, which I’m in the process of doing myself, access (both to capital and talent) is key. What I look for in a destination city are strong existing companies, a large talent pool and capital that exists but may not be investing in tech yet.
Think Outside of Conventional Tech Hubs
I toured Orlando in January. In the last six years the city has grown 16.31 percent. And at first blush you may think theme parks, retirees and tourism. But they have the largest university in the country, based on enrollment, in UCF. Downtown is young. And there’s a pipeline of talent both from universities and strong existing companies like Disney, Lockheed Martin and EA Sports.
Orlando has already seen the Silicon Valley exodus pay dividends, with fast-growing Fattmerchant. The young payment processing company is growing rapidly. Founder Suneera Madhani and her brother Sal Rehmetullah, who worked in Silicon Valley, intentionally chose to plant their flag in Orlando.
“Fattmerchant is where we are today because of the support of the Orlando community,” said Suneera Madhani, CEO, Fattmerchant?. “We are proud to be Orlando born and bred and find that as we expand Orlando continues to have the infrastructure we need to not only achieve our growth but to continue to surpass our goals.”
Enter on the Upswing
“We’ve stayed ahead of the curve by testing and implementing bleeding-edge cleantech solutions, such as floating solar power, electric buses for public transit, and even positioning ourselves as a national research hub for autonomous and connected vehicles,” said Chris Castro, who leads sustainability and smart cities initiatives for the City of Orlando.
If Orlando wants to attract those leaving Silicon Valley it starts with the same things most cities pitched to Amazon for HQ2. Castro anticipated this years ago and has Orlando already prepared.
Donna L. Mackenzie, Executive Director, Canvs, Starter Studio, FireSpring Fund has worked to deliver a similar infrastructure to Silicon Valley in Orlando. Her space offers a variety of education programs that are open to the public, accelerator programs that take founders from idea to a scalable venture, collaborative work spaces, seed funding, and access to angel and venture capital.
Make Sure a City Invests in Education
Otronicon, Orlando’s annual tech conference, is different than anything I’ve ever attended. It’s for kids, rather than adults. It’s interactive, educational and full of plenty of Esports tournaments.
“It’s a great venue that introduces students to the high-tech world and gives them the opportunity for high-tech careers right here in our community,” said Adam Breed, Engineering Project Manager, Lockheed Martin?. “A software development panel at Otronicon featured a lead Lockheed Martin engineer and opened the eyes of a recent college graduate. He was quickly interviewed and brought into Lockheed Martin within weeks to help develop some of our most advanced simulators.”
Assess the Network
Full Sail University, which prepares people for work in entertainment, has also been paramount in this youth movement. Last year 66 Full Sail graduates worked on 10 Oscar winning films.
Chance Glasco, the co-Founder of Call of Duty is an alum. His latest venture Doghead Simulations is creating VR meeting space and is partnering with Full Sail University with its HQ on site. Having access to state-of-the-art and graduating talent was key in Glasco’s decision to stay local.
This rise of highly-trained entertainment talent has also translated in to a growing film industry. “Last year, the Orlando region saw a 78 percent increase in commercial productions when compared to the previous year. While Florida currently lacks an Entertainment Industry Financial Incentive Program,” said Sheena Fowler, Orlando Film Commissioner, and also a Full Sail alum.
What to Consider Most
Orlando’s challenge will be migrating real estate investors to startups and high tech. The success of Fattmerchant and the work Donna Mackenzie and others are doing in the incubator space will help.
If I’m a young company that wants to create a longer runway–keep costs low to buy time before success–I would chose Orlando. The young talent is there. There’s an Orlando tech ecosystem already in place that wants you to succeed.
There’s no state income tax, no inflated wages or housing and there’s a growing, young, downtown community.
Orlando is a lot like Bitcoin was five years ago, you should get in while it’s still cheap.
Ballast Point Ventures III, LP (“BPV”) is pleased to announce that Frontier Capital has led a majority recapitalization of its portfolio company PowerDMS, an Orlando-based policy management software company. BPV invested in PowerDMS in 2014 to help the Company grow its sales and marketing team and further enhance its technology platform by offering new features to its customer base.
Founded in 2001 by Chief Executive Officer Josh Brown, PowerDMS offers a software as a service, cloud-based compliance and content management solution that helps organizations reduce risk and liability. The Company provides software tools to organize and manage all of a company’s critical documents and respective industry accreditation standards, as well as allow for training and testing of employees. PowerDMS serves customers in law enforcement, public safety, and healthcare and has achieved significant organic growth in these markets during BPV’s investment period.
Robert Faber, a Partner with BPV, will continue to serve on PowerDMS’s board of directors subsequent to the majority recapitalization. He remarked, “We are very pleased to have partnered with Josh Brown and his team as they have built a successful software company in Florida. We are proud of the growth that PowerDMS has shown during our investment period and want to thank Josh and his team for their excellent work since we invested. We think that PowerDMS has found a great partner in Frontier Capital to help the Company reach its goal of being the market leader in crucial content management, and we are excited about remaining shareholders for the next leg of the journey.”
“Ballast Point Ventures has been a great partner throughout our relationship. Their expertise and thoughtful leadership helped us mature without compromising our culture or customer satisfaction,” said Josh Brown, Founder and CEO of PowerDMS. “The team at BPV was immensely helpful in bringing its strong Florida network to bear as we scaled our operations, and we added numerous key team members as a result of BPV’s introductions. Now, with Frontier Capital as a partner, we are enthusiastic to expand this growth and continue to provide our customers with a world-class product.”
PowerDMS, headquartered in Orlando, Florida, is a cloud-based policy management software company. The platform provides practical tools to organize and manage crucial documents and industry standards, train, and test employees, and uphold proof of compliance, thereby helping organizations reduce risk and liability. PowerDMS simplifies document management through powerful collaboration, process, and automation. For more information on PowerDMS, please visit https://www.powerdms.com/
Ballast Point Ventures, headquartered in Tampa, Florida, is a later stage venture capital and growth equity firm founded in 2002 to provide expansion capital for rapidly growing, privately owned companies, with a particular emphasis on companies located in the Southeast and Texas. The BPV partners have more than 80 years of combined experience investing in and building high-growth companies in several industries, including health care, software, technology-enabled business services, communications, and consumer. BPV has $360 million under management and seeks to make initial equity investments ranging in size from $4 million to $10 million. For more information on Ballast Point Ventures, please visit http://ballastpointventures.com/