Yearly Archives: 2018

Venture capital gains ground around Tampa Bay

Source:  Tampa Bay Business Journal 

By:  Margie Manning

In the nearly one year since Ballast Point Ventures in Tampa invested $4 million in venture capital in Symphonic Distribution Inc., the digital music distribution company in Tampa has been able to make moves needed to scale the business.

Symphonic hired key employees with management experience that allows Jorge Brea, founder and CEO, to focus on growth, while also gaining a partner that provides business guidance.

Full Article:   Tampa Bay Business Journal 

 

Revealed: Billboard’s 2018 Indie Power Players

Source:  Billboard

By:  Billboard Staff

When independent record executives gathered at the Libera Awards in New York in June to honor their label’s best releases, they had more than artistic achievement to celebrate.

Independently owned labels — ranging from small, artist-owned imprints to multimillion-dollar organizations like BMG, Big Machine Music Group and Concord Music Group — now claim 37 percent of the U.S. recorded-music market, according to a report released by MIDiA Research last October.

When the American Association of Independent Music, the independent-label trade group that presents the Libera Awards, was founded in 2005, that market share was 29 percent, says A2IM CEO Richard James Burgess.

Libera Awards performers Mann
READ MORE
The 2018 A2IM Libera Awards Will Be a Declaration of Independents

The MIDiA report, which was commissioned by the Worldwide Independent Network, a trade group of the independent music business, found that the indies’ share of the global music market is even marginally higher — 38 percent — and that indies generated $6 billion in worldwide sales.

“It speaks volumes for the tenacity, passion and entrepreneurship of independent labels and the public’s desire for musical diversity, that even in these times of global dominance by major corporations, almost four out of every 10 dollars spent on music goes to the independent sector,” said Martin Mills, founder of Beggars Group and WIN vice president, commenting on the MIDiA report.

In addition to expanding their market share, independents are growing revenue for their artists through their collective clout as Merlin, the global digital-rights organization for indie labels, negotiates with streaming services on behalf of their artists.

Billboard’s Indie Power Players report recognizes achievement at independently owned record labels, music publishers and distributors — but also distribution companies owned by the three major music groups that play a significant role in bringing indie-owned repertoire to market. In a volatile time for the music business, these executives assure the continued growth of indie music.

Jorge Brea33
CEO, Symphonic Distribution

Founded in 2006 by Florida music producer Brea in a spare bedroom of his parents’ house, Latino-owned Symphonic is a key conduit to Spotify, Amazon and other streaming platforms for indie acts of all genres. Last November, the equity firm Ballast Point Ventures put $4 million into the Tampa, Fla.-based firm, which also offers design, audio mastering, marketing, merchandising and licensing services. “People were wondering, ‘Why are you taking money now? Is everything all right?’” says Brea. “I told them, ‘Everything’s more than all right.’ We want to invest more aggressively and hire more people.”

Full article 

 

 

Astroball > Moneyball

Regular readers know that we’ve often covered the limits of decision models, the importance of chemistry, and what makes a team work well together.  And that we’re baseball fans (especially of our Rays).

recent review of “Astroball” in The Wall Street Journal. covers that same ground with the terrific story of the 2017 World Series champs.  Astros GM Jeff Luhnow figured out how to get scouting and analytics to work together and combine that with team building to go from last place to World Series champs in 3 short years.

It was no easy task, “(B)ut it was done, and the team made a series of sound, even brilliant, choices as it drafted, traded and signed players.”

An excerpt:

This roster-creation, all by itself, did not bring home the championship. Building an exceptional team is one thing, but making it work as a team is another. “Fault lines” exist in all complex organizations—including baseball teams. If these lines can be bridged or eradicated, a team is likely to win more ball games. To use another bit of old-fashioned terminology, a team needs chemistry.

Carlos Beltrán, the veteran outfielder signed by the Astros after the 2016 season, immediately took on the role of chief chemist. Among other things, he created a postgame ceremony that awarded prizes for excellence in the field and instituted a postgame “court” for those who failed to attend: The fine was $500. Mr. Beltrán also had a singular ability to study opposing pitchers and determine their “tells”—gestures and small changes in behavior that signaled whether or not the next pitch would be, for example, a breaking ball or a fast ball. Finally, Mr. Beltrán had a strong desire to close the gap between the English and Spanish speakers.

His biggest ally in this quest was Alex Bregman, who professed to speak perfect Spanish. In fact, it was far from perfect, but Mr. Bregman worked hard to communicate with his Spanish-speaking teammates, including going out of his way to befriend first baseman Yuli Gurriel, who joined the team in 2016 after coming to the United States from Cuba and who spoke no English at all. Mr. Gurriel was exactly the sort of player who can become isolated and resentful in many American clubhouses. But Mr. Bregman refused to let that happen. As Mr. Reiter explains, “The two yammered at each other in Spanglish all day long.”

Add to all this the signing of pitcher Justin Verlander, acquired during the 2017 season, and a dash of good luck, and there’s no reason why any of us should have been surprised that the Astros won their World Series right on schedule. Mr. Reiter’s superb narrative of how the team got there provides powerful insights into how organizations—not just baseball clubs—work best.

We have previously suggested  that in baseball there’s just a slight correlation between more analytics and more success.  It remains tough to eliminate the usefulness of having more money than other clubs, and with technology and best practices so widely disseminated and articulated (in baseball, at least) the early Moneyball advantages may have been arbitraged away.  So excellent teamwork or a hot stretch of cluster luck can make the difference.

The fan inside us is fascinated by new thinking on the topic, and the prospect of advantages to be gained in the short term, but over the long term our conclusion remains the same:  big data may help make accurate predictions or guide knotty optimization choices or help avoid common biases, but it doesn’t control events.  Models are useful in predicting things we cannot control, but for those in the midst of the game – players or entrepreneurs – the results have to be achieved, not just predicted.

Growing Capital In the Corridor

Source:  Florida High Tech Magazine

Home to more than 383,000 millionaire households and 34 people on Forbes’ list of the 400 richest people in America, Florida has ample funding available. While success stories from across The Corridor exhibit how startups like Orlando’s Fattmerchant, Tampa’s Morphogenesis and Gainesville’s Captozyme have tapped into such wealth, the reality is most entrepreneurs struggle in an increasingly competitive environment.

Fundraising has accelerated rapidly in recent years. While funds grow in dollar amounts, the number of funds has remained relatively the same. This dynamic causes investors to write fewer, larger checks, making it more difficult for smaller companies seeking less capital to benefit unless they boast a disruptive or scalable idea. Indeed, MoneyTree’s Q1 report this year ranked Florida among the top five states for largest deals by dollar amount, with $511 million in financing distributed amongst just 20 contracts.

“On one hand, The Corridor region is a much more credible geographic area to invest in than it was 15 years ago and investors from all over the country now consider investing here,” said Randy Scott, partner at Gainesville’s HealthQuest Capital and advisory board member for the Florida Institute for the Commercialization of Public Research. “On the other hand, the businesses starting here tend to be the ones raising smaller amounts of capital, which will make it tougher to raise capital in this era of bigger deals.”

Randy has been an executive, board member, entrepreneur and investor in health care and medical technology companies for more than 30 years. He recommends smaller companies in The Corridor seek funding from “less traditional sources like angel groups or family offices,” which offer assets from wealthy individuals or families with longer investment horizons.

Tampa’s Ballast Point Ventures, the most active venture investor in Florida over the past 10 years, is not an angel group or family office, yet it does assist companies in earlier stages generating around $3 million in revenue. According to Principal Sean Barkman, who works largely with software-as-a-service companies, this segment of the entrepreneurial ecosystem is underserved by larger funds.

“We are pleased that five of our first 10 investments in Ballast Point Ventures III (a $164-million fund raised in early 2015) are based in Florida and three of those companies are based in Central Florida,” said Sean.

Similarly, IDEA Fund Partners is one of the most active seed and early-stage venture investors throughout the Southeast with stakes in three Florida companies, including one in The Corridor. With offices in North Carolina and Orlando, its managers review over 1,000 business plans a year, but typically make only one investment a month. This scenario is not uncommon among firms, said Founding Partner Richard Fox.

All three investors would agree success stems from investing not only in funds, but also in entrepreneurs. For Florida and The Corridor to advance the entrepreneurial ecosystem, assisting early-stage companies in the competitive environment is key. As Randy explained, venture capital money “chases talent more than technology.”

“We need to turn Florida into a destination for high potential and already successful entrepreneurs to move to.  Then, everything will take care of itself in time.”

Several groups across the region, such as NEXUS and Seed Tampa Bay, are aware of the challenges facing early-stage companies and are working to help company founders more easily access funds. Before entrepreneurs utter one word of their business pitch, however, much preparation is required. Investors are more likely to work with founders who possess strong business acumen, leadership capability, industry awareness and a realistic company valuation. They must also be adaptable.

“In all the companies we invested in that were successful, every one of them had to pivot because of outside influences, surprise competitors and deeper opportunities in adjacent areas,” explained Richard. “It’s not all about the brilliant idea; it’s whether the company has thought through every scenario.”

It’s not unusual, added Sean, for investment firms and entrepreneurs to build relationships long before any capital is raised.

“The most rewarding part of our job is developing relationships with entrepreneurs and working alongside them to help grow their businesses,” he said. “The entrepreneurial spirit is truly unique, and we are thrilled to be part of the growing ecosystem here.”

In the world of venture capital, progress begets progress. As early investments in some of The Corridor’s leading technology entrepreneurs are coming to fruition, the region faces immense potential. Crucial to growth is reinvestment by successful entrepreneurs. We need them to serve as angel investors and advisors for the next wave of pioneers. This cycle proves efficacy, enticing even more investors and entrepreneurs to The Corridor, where a favorable business tax climate, modern infrastructure, talented workforce and lifestyle amenities provide refuge from the rising costs and bloated markets of other high tech hubs.

 

Dick Brandewie, co-founder of Ballast Point Ventures in Tampa, remembered for ‘intellectual curiosity’ and love of people

Source:  Tampa Bay Business Journal

By:  Ashley Gurbal Kritzer

Dick Brandewie hadn’t been active at Ballast Point Ventures since 2012, but his colleagues at the Tampa private equity firm still invoke his one-liners on a regular basis.

Brandewie, who co-founded the firm in 2001, died July 14 at the age of 63 after a long illness, according to an obituary published Friday.

Full Article:  Tampa Bay Business Journal

 

Prepaid Technologies Appoints New President, CEO and Executive Chairman

Source:  Prepaid Technologies


BIRMINGHAM, Ala.July 10, 2018 /PRNewswire/ — Prepaid Technologies, a leading provider of payment and rewards solutions announced multiple leadership changes today. Long-time prepaid industry executive Steve Fussell was hired as president and former president Stephen Faust has been promoted to CEO. Company founder and CEO Thomas Mcculley will now serve as executive chairman.

Steve Fussell is an industry leader whose extensive operations and technology experience is essential at a time when we’re investing in and experiencing immense growth,” said Thomas Mcculley. “As Steve concentrates on enhancing our technology offerings to support our entire product suite, Stephen Faust will accelerate his focus on growth, business development and key account management.”

“We’ve driven steady 20-30 percent year-over-year growth for the past five years, pacing well above industry growth estimates of 3-12 percent,” added Faust. “Steve’s expertise will bolster our ability to sustain this growth through the delivery of innovative business payments and reward products.”

Fussell is known for creating best-in-class operations and process solutions. His experience includes management of transaction processing, operations, credit, and prepaid in both startups and large public companies. He has held executive positions at UniRush, FSV Payment Systems, Netspend and Macy’s, among others. Most recently, Fussell consulted investment groups in the evaluation of financial service and technology companies.

“Prepaid is driving more innovation than any other payment platform today and will continue to be the rails for growth in virtual, contactless and peer-to-peer payments among others,” said Fussell. “As a provider of some of the most diverse payment and reward solutions across payroll, expense management and incentives, Prepaid Technologies is uniquely positioned to capitalize on market opportunities and I’m excited to lead the team as we support this growth.”

Since third quarter of 2017, the Prepaid Technologies team has also made several key hires in Birmingham as well as the addition of national payments leaders including Brian Thornsberry, who joined in November 2017 as senior vice president of business development and marketing.

About Prepaid Technologies

A pioneer in financial technology, Prepaid Technologies has been providing innovative electronic payment solutions including payroll, expense, gift, reward and incentive card products to employers, financial institutions, and government agencies for more than 20 years. Learn more at www.in-prepaid.com.

 

Up-and-coming Tampa musicians featured in six new Downtown Tampa playlists on Spotify

Source:  ABC Action News WFTS Tampa Bay

By:  Sean O’Reilly

TAMPA, Fla. — It just became easier to jog down Bayshore Boulevard or do yoga in Curtis Hixon Park while listening to up-and-coming Tampa musicians.

Symphonic Distribution and the Tampa Downtown Partnership worked together to create six new public playlists music on Spotify. Each playlist on the music streaming service offers a different experience for people living, working and playing in Tampa’s downtown neighbor.

“After moving our operations to the downtown area, we quickly realized that there is a great opportunity to connect this vibrant and dynamic area with the music that is being created in it,” said Janette Berrios, Director of Marketing for Symphonic Distribution.

The playlists features music from up-and-coming Tampa musicians, local favorites, indie music from around the globe and people performing in the monthly downtown music series, Rock the Park.

“We hope that listeners discover and experience the diversity, culture and incredible talent that our Tampa Bay area has to offer,” said Berrios.

Rock the Park is among the six playlists created by Symphonic. The others include Study Sessions, Tampa Riverwalk Run, Yoga in the Park, Zumba in the Park, and Pre-Game Party which is a tribute to Tampa Bay Lightning fans.

To view all the playlists, visit Tampa Downtown Partnership’s profile on Spotify at downtowntampamusic.com.

New addition to The Library in St. Pete

The latest addition to The Library in St. Pete is Thinking in Bets – Making Smarter Decisions When You Don’t Have All the Facts,  authored by Annie Duke, the professional poker player who began her career when, at age 26, she quit the cognitive-psychology doctoral program at the University of Pennsylvania.  The Wall Street Journal review of her book calls it “the dissertation she never got around to finishing.”

Ms. Duke writes that “our brains weren’t built for rationality” and “they aren’t changing anytime soon” so decision-makers have to “figure out how to work within the limitations of the brains we already have.”

As with many of our irrationalities, how we form beliefs was shaped by the evolutionary push toward efficiency rather than accuracy.  Abstract belief formation (that is, beliefs outside our direct experience, conveyed through language) is likely among the few things that are uniquely human, making it relatively new in the scope of evolutionary time. (p.51)

Duke maintains that the highest-level performers in any field have developed habits to compensate for cognitive biases and unconscious habits.

Among her recommendations are organized skepticism and truth-seeking accountability groups, as well as assorted forms of “mental time travel”:  backcasting, premortems, Ulysses contracts, and moving regret in front of a decision.

The WSJ review nicely summarizes Ms. Duke’s thesis:

Ms. Duke suggests recasting our judgment calls as bets. “We don’t win bets by being in love with our own ideas,” she writes. “We win bets by relentlessly striving to calibrate our beliefs and predictions about the future to more accurately represent the world.” Thinking about choices this way brings with it a profound attitudinal shift, from binary right-wrong thinking to a “probabilistic” approach, in which we choose “among all the shades of grey.” This reframing has a clarifying effect. “The more we recognize that we are betting on our beliefs (with our happiness, attention, health, money, time, or some other limited resource),” Ms. Duke writes, “the more we are likely to temper our statements, getting closer to the truth as we acknowledge the risk inherent in what we believe.”

Moreover, when we state our judgments circumspectly in the form of a bet, we are more inclined to revise them with the arrival of new information. “When confronted with new evidence, it is a very different narrative to say, ‘I was 58% [certain] but now I’m 46%,’ ” writes Ms. Duke. “That doesn’t feel nearly as bad as ‘I thought I was right but now I’m wrong.’ . . . This shifts us away from treating information that disagrees with us as a threat.”

She also argues that the role of skill and luck in sports and business makes it difficult to just “work backward” from outcomes to the decisions we made.

Think about this like we are an outfielder catching a fly ball with runners on base.  Fielders have to make in-the-moment game decisions about where to throw the ball:  hit the cutoff man, throw behind a base runner, throw out an advancing base runner.  Where the outfielder throws after fielding the ball is a bet.

We make similar bets about where to “throw” an outcome:  into the “skill bucket” (in our control) or the “luck bucket” (outside our control).  This initial fielding of outcomes, if done well, allows us to focus on experiences that have something to teach us (skill) and ignore those that don’t (luck).  Get this right and, with experience, we get closer to whatever “-ER” we are striving for:  better, smarter, healthier, happier, wealthier, etc.

It is hard to get this right.  Absent omniscience, it is difficult to tell why anything happened the way it did.  The bet on whether to field outcomes in the luck or skill bucket is difficult to execute because of ambiguity.  …

Outcomes don’t tell us what’s our fault and what isn’t, what we should take credit for and what we shouldn’t.  Unlike in chess, we can’t simply work backward from the quality of the outcome to determine the quality of our beliefs or decisions.  This makes learning from outcomes a pretty haphazard process. (p.86)

PowerDMS Names David DiGiacomo as Chief Executive Officer

Source:  PowerDMS

ORLANDO, Fla.June 19, 2018 /PRNewswire/ — PowerDMS, a leading provider of cloud-based policy management software, today announced that David DiGiacomo has joined the company as chief executive officer. In this role, DiGiacomo will be responsible for leading the day-to-day operations as well as executing the company’s growth strategy.

 

For over 15 years, DiGiacomo served as the CEO and president of OnSolve (formerly ECN), a global provider of cloud-based critical communication solutions for government, enterprise, and SMB clients. Under DiGiacomo’s leadership, OnSolve grew from two full-time employees to what it is today, the industry’s largest provider of emergency and mass notification services with $100+ million in annual revenue.

“I am excited to welcome Dave as our new CEO,” said PowerDMS founder, board member, and former CEO, Josh Brown. “He has the experience we were looking for, along with a vast understanding of our customer base. His track record of scaling a company of our size to our next growth horizon makes him ideally suited to lead the company through this stage of its incredible journey.”

Founded in 2001, PowerDMS offers a compliance and content management solution that helps organizations reduce risk and liability. The company provides software tools to organize and manage an organization’s critical documents and industry accreditation standards, as well as allow for training and testing of employees. PowerDMS serves customers in public safety, government, and healthcare and has achieved significant organic growth in these markets.

“I’m honored to lead the team at PowerDMS,” said DiGiacomo. “The company has a long history of success and an unmatched reputation for customer satisfaction. My goal is to drive strategy that accelerates business growth and technology innovation without compromising the world-class service PowerDMS provides its clients.”

Michael Ramich, partner of Frontier Capital, the growth equity firm that invested in PowerDMS last year, said that adding a seasoned leader from the public safety and government software-as-a-service space is key to the company’s strategy and future growth. “Dave has the right combination of industry experience and expertise to advance PowerDMS in this next phase of growth.”

About PowerDMS
PowerDMS, headquartered in Orlando, Florida, is a cloud-based policy management software company. The application 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.

About Frontier Capital
Frontier Capital is a Charlotte-based growth equity firm focused exclusively on software and technology-enabled business services companies. Founded in 1999, Frontier partners with management teams that can benefit from capital to accelerate growth, fund acquisitions or generate shareholder liquidity. The firm makes minority and majority equity investments in high-growth companies. For more information, please visit www.frontiercapital.com, or follow Frontier on LinkedIn or @TheFrontierTeam on Twitter.

Contact:
Amy Dinsmore
407-992-6058
amy.dinsmore@powerdms.com

 

“Health Ambition” on the diagnosis & effects of sleep apnea

This interesting article in Health Ambition provides an excellent summary of the potentially serious risk factors of sleep apnea, which they estimate affects 26% of adults – 80% of which goes undiagnosed.

The corresponding reduction in sleep quality can lead to common symptoms in the short term such as fatigue and irritability, but over the long term the consequences could include increased risk of many serious conditions such as diabetes, high cholesterol, heart disease and stroke.

If you’d like to learn if you might be part of the undiagnosed population, our portfolio company SleepMed offers a free online preliminary sleep risk test that is quick and easy.  They also offer home- and lab- based sleep diagnostics services as well as outcomes-based sleep disorder treatments and support.

Check out the article at Health Ambition.  One of the many fascinating things we’ve learned since our investment in SleepMed is how critical a good 7 hours/night of sleep is to a whole range of health outcomes.

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