Whether it’s the stalwart Reds, frustrating Bengals or the fledgling FC Cincinnati; the local chili franchises, established restaurateurs, or emerging breweries; growing art scene, the established Fortune 500 companies or the entrepreneur community; there is a lot to love about the Cincinnati region. Site Selection magazine ranked Cincinnati a Top 10 Metro coming in at number five on the Governor’s Cup list. Zillow ranked Cincinnati number five among the nation’s top up-and-coming tech markets while our airport is ranked third in the U.S. by Skytrax. Tech company Smart Assets ranked Cincinnati as the top city in the nation for young professionals to live and the top city for beer drinkers. And Forbes ranked Cincinnati as the ninth best city in the nation to raise a family and one of the top 10 places to land a new job in 2020.
The last year was also tremendous for Queen City Angels as we grew from 53 to 70 regular members while our Ascent membership grew to 46 investors. Our focus on diversity was also successful as we added 13 new women and five new African American investors. Combined, QCA membership reached 130 investors, up from 49 in 2014. This growth will allow us to continue to expand our mission and support more entrepreneurs and start-ups. We are still only scratching the surface of our potential.
Despite COVID-19 and the subsequent economic challenges that have hit our communities, there is reason for optimism for the future of QCA and our current and prospective portfolio companies.
From first responders and front-line heroes managing the ebbs and flows of patient counts and hospitalizations; to important supply chain operators keeping shelves stocked with supplies and getting packages to quarantined individuals; to the teams of researchers working tirelessly to develop treatments and vaccines to reduce the impacts on health and lives, many organizations are rightfully focused on helping people through the extraordinary challenges created by the global pandemic.
As we transition to rebuilding our economy, we know from experience that our local entrepreneurs are going to be ready with innovative ideas that will help jumpstart the economy. We have already seen some tremendously successful developments among our portfolio companies that have pivoted because of COVID-19. Research indicates that for any 25-year period, all net new job growth is created by companies that are 0 to 5 years old. These are QCA companies, and they will once again lead us to economic prosperity.
As we emerge on the other side of the pandemic and consider our “new normal,” one of the questions that will be asked is, “Are we in a period of restoration or a period of great change?” It is our expectation that we will see some companies focused on revisiting their products and services and repairing their markets. However, we will also see an abundance of exciting new opportunities driven by emerging technologies and new ways to look at the world and how we do things. This includes angel investing.
As we move forward, entrepreneurs will look to QCA for more than capital to fuel their companies. They will also need our vision, skills, experience and leadership to help them navigate the day-to-day challenges within their startups and early-stage companies.. And as a group, they will need us to be more representative of the diversity seen among today’s entrepreneurs and start-ups, including among women and minority-owned businesses.
Over the last year, we have been preparing for this new mentoring and investment environment. Our focus on increasing our members, member training and diversity has positioned QCA as the best group of people to mentor area entrepreneurs as they help rebuild and lead a thriving economy.
(A portion of this was inspired by QCA Chairman Tony Shipley’s opening remarks at ACA 2020 Summit in May.)
In March 2019, QCA started investing out of it’s sixth fund, First Fund VI. This fund is the first in QCA’s history that didn’t have Ohio Third Frontier as a co-investor. The first class of investments came from 12 investors, including four women, while the second class included over 40 investors. Based on historical performance, between 15 and 20 businesses will benefit from First Fund VI. Companies are usually companies throughout the state of Ohio that focus on technology such as cloud-based solutions, solar, manufacturing, life sciences and biotech. The first company to receive an investment from the fund was Bert Thin Films out of Louisville, Ky.
The QCA First Funds are a family of small investment funds established in 2003 to help fledgling companies reach important milestones in their development and attract additional investment from conventional sources. These Funds were established in 2006, 2009, 2013 and 2016. First Fund V was the largest in the group’s history with $10 million, $5 million in private funds from QCA members and two Cincinnati-based institutional investors, Ft. Washington Capital and Interact for Health. The remaining $5 million of matched funds came from Ohio Third Frontier. The first class of investors into First Fund V included 10 members, three of which were women angel investors. The second class had 33 members, including 11 women and four African-American angel investors.
Typical initial investments are in the $100,000-$300,000 range. Earlier funds were created by matching investments from the State of Ohio’s Third Frontier Action Fund. Members of QCA, with support from the Tri-State Growth Capital Fund and others, provide management and oversight of the Fund, as well as mentoring and guidance to the portfolio companies.
In 2019, T-Pro Solutions, a provider of trade promotion optimization solutions, was acquired by Blacksmith Applications out of Lawrence, MA. QCA was an early investor in the Columbus, Ohio-based company, participating in two rounds of funding with the first closing in the summer of 2015. What made the investment unique is the collaborative nature of the funding, which included Rev1 Ventures and the Ohio Tech Angel Fund, in addition to QCA. Regarding the acquisition, Tony Shipley, Chair of QCA, said “This acquisition is also another victory for QCA, our member investors and the collaborative efforts of Ohio’s angel investment community.…
In 2019, T-Pro Solutions, a provider of trade promotion optimization solutions, was acquired by Blacksmith Applications out of Lawrence, MA. QCA was an early investor in the Columbus, Ohio-based company, participating in two rounds of funding with the first closing in the summer of 2015. What made the investment unique is the collaborative nature of the funding, which included Rev1 Ventures and the Ohio Tech Angel Fund, in addition to QCA.
Regarding the acquisition, Tony Shipley, Chair of QCA, said “This acquisition is also another victory for QCA, our member investors and the collaborative efforts of Ohio’s angel investment community. It is an example of what can happen when you rally the needed resources around an excellent technology and team.”
In March 2019, QCA portfolio company Collaborent was acquired. The investment was with First Fund III and included seven QCA sidecar investors. Headquartered in Cleveland, Collaborant was a group purchasing organization for public sector entities and small businesses. The primary customers were schools and small businesses, both of which have been significantly affected by COVID-19. Despite uncertainty over the impact of the virus prior to the closing of the sale, investors received the price that was set before the virus outbreak. QCA member Don McKee served as Chairman of the Board for seven years and led the negotiations of the…
In March 2019, QCA portfolio company Collaborent was acquired. The investment was with First Fund III and included seven QCA sidecar investors. Headquartered in Cleveland, Collaborant was a group purchasing organization for public sector entities and small businesses. The primary customers were schools and small businesses, both of which have been significantly affected by COVID-19. Despite uncertainty over the impact of the virus prior to the closing of the sale, investors received the price that was set before the virus outbreak. QCA member Don McKee served as Chairman of the Board for seven years and led the negotiations of the terms of sale.
In the summer of 2012, QCA was introduced to Ecolibrium Solar, a start-up company with a focus on revolutionizing the solar power market. Ecolibrium Solar’s rapid growth and the opportunity to participate in a hot market flush with merger and acquisition activity provided tremendous upside potential for local investors. From 2012 to 2014, QCA provided three investments in the company. Earlier this year, QCA investors were rewarded when Equilibrium Sol – Unirac, a North America manufacturer of solar photovoltaic mounting systems, purchased Ecolibrium Solar. Queen City Angels collaborated with Ohio TechAngels, providing significant board leadership for Ecolibrium Solar over the…
In the summer of 2012, QCA was introduced to Ecolibrium Solar, a start-up company with a focus on revolutionizing the solar power market. Ecolibrium Solar’s rapid growth and the opportunity to participate in a hot market flush with merger and acquisition activity provided tremendous upside potential for local investors. From 2012 to 2014, QCA provided three investments in the company. Earlier this year, QCA investors were rewarded when Equilibrium Sol – Unirac, a North America manufacturer of solar photovoltaic mounting systems, purchased Ecolibrium Solar.
Queen City Angels collaborated with Ohio TechAngels, providing significant board leadership for Ecolibrium Solar over the last eight years.
Ted Capossela, Queen City Angels investor and member of Ecolibrium board, said “Ecolibrium Solar’s story exemplifies the type of success we wish for all of our portfolio companies. When we choose to invest in start-up companies, we are investing in future economic development and job growth in Ohio.”
QCA invested in ConnXus, a Mason-based provider of diversity and sustainability solutions, through its First Fund VI. In June 2020, the company was acquired by Coupa, the leader in Business Spend Management (BSM). The companies call the acquisition “an exciting milestone for both of our companies that will enable us to deliver ConnXus’ world-class diversity and sustainability solutions as part of the comprehensive Coupa BSM Platform.”
QCA invested in ConnXus, a Mason-based provider of diversity and sustainability solutions, through its First Fund VI. In June 2020, the company was acquired by Coupa, the leader in Business Spend Management (BSM).
The companies call the acquisition “an exciting milestone for both of our companies that will enable us to deliver ConnXus’ world-class diversity and sustainability solutions as part of the comprehensive Coupa BSM Platform.”
The novel coronavirus is having a major impact on virtually every aspect of our lives. It is also forcing companies to make adjustments to their businesses in real-time, to adjust to government regulations, changing consumer behaviors, and challenges with supply channels. Below are several examples of how QCA portfolio companies innovated to not only survive, but thrive during these challenging times.
Sports Medicine and Telehealth company Healthy Roster announced the launch of SAFER Play for the PGA TOUR. In preparing to return to regular season competitive play, the PGA TOUR has partnered with Healthy Roster to ensure its players, caddies, and all staff at events are screened daily in order to make sure any symptomatic individual is identified and kept from coming to the course.
In addition to the PGA Tour, Healthy Roster is also close to an additional $14k in SAFER deals, including the USGA and LPGA. The company had a record month in June and July, closing $65k in new annual accruing revenue for core EMR in June, and $86k for EMR and $98k for SAFER in July. Gross customer retention at the end of June was 93% and net retention was 103%.
DART Displays provides technology solutions and skilled labor to help brands and retailers get more productivity out of physical retail stores.
As COVID-19 started to cause challenges for businesses, DART made moves to cut unnecessary costs and put a focus on improving gross margins, which has helped extend the company’s runway.
DART added two elements to its portfolio as items that it thought would be good for selling in a Covid-19 environment. Since May, the company has closed roughly $500K in sales of these products. The two services are:
Fortunately, because DART serves drugstore and grocery stores’ retail channels, clients are having strong years financially. This means DART will continue to see sales growth on its core offerings. As of July, the company has surpassed 2019 revenue by 300 percent.
Ischemia Care’s ISCDx test uses gene expression to identify the cause of stroke during the hospital admission following acute treatment, so a targeted and personalized approach can be implemented to minimize the risk of recurrence. ISCDx provides a new source of information that empowers clinicians to streamline patient workflow to confirm the most likely cause while eliminating other more invasive, high cost, or low yield testing.
While hospitals are still recovering from the several-month suspension of non-acute operations and working to manage COVID-19, we still anticipate hospitals will be using and paying for ISCDx tests in the near future. In addition to Ischemia Care’s commercialization efforts, the company is currently working to streamline the testing time, reduce costs of test processing and develop additional stroke tests.
To help manufacturing companies and their multi-tier supply chains during COVID-19, Supply Dynamics has upgraded its existing SDX SupplyMap™ capability to allow customers to easily identify sub-tier suppliers located in COVID-19 hot zones and receive updates from them on production readiness. A built-in operational readiness assessment allows sub-tier suppliers to easily report any impacts to up-stream customers.
To trace the impact of COVID-19, SDX SupplyMapTM utilizes curated data streams from Johns Hopkins and the CDC. Beyond supply chain risks stemming from COVID-19, Supply Dynamic’s technology can also support real-time monitoring of natural disasters, credit scores, on-time delivery performance, quality ratings and an unlimited number of other factors that influence supplier health.
In conjunction with the formation of FFVI, the Ascent membership class expanded (each Ascent membership class is formed in conjunction with an active fund.) Currently, QCA has 46 Ascent Members.
QCA introduced the Ascent program in 2017 to add diversity and unique perspectives to QCA with a goal to welcome younger members, more women and people of color. Ascent is an outgrowth of a key strategic imperative for QCA to improve diversity and inclusion.
In addition to the many new Ascent members, regular QCA members grew as well. At the beginning of 2019, the group had 53 members. By June 30, QCA had 70 Members, including 13 women investors and five African-Americans.
Total membership of QCA expanded to 130, up from 49 in 2014
Eric H. Kearney is the President/CEO of the Greater Cincinnati/Northern Kentucky African American Chamber of Commerce. Eric served as Ohio Senate Minority Leader and championed a number of causes including adoption, children’s health, small business development, and pension reform. Eric was a member of President Barack Obama’s national ﬁnance committee during Obama’s run for U.S. Senate and President.
Eric is managing partner of Kearney & Kearney, LPA, as well as an adjunct professor at the University of Dayton, School of Law. He also founded and built one of the largest African-American owned publishing companies, Sesh Communications. At the African-American Chamber of Commerce, he has increased the membership to the organization’s largest level, established more programs than at any point in the organization’s history, and expanded the reach of the organization.
Eric serves on several Cincinnati civic and community boards including the Cincinnati Art Museum, Ohio Citizens for the Arts, Contemporary Arts Center, Mercy Health Foundation, the Stephen Wilder Foundation, the Health Collaborative, and Go Vibrant, and the Andrew Jergens Foundation.
He has been recognized as legislator of the year by the Ohio State Medical Association, Business Courier’s 40 Under 40 and 2nd Act awards, the United Way of Greater Cincinnati’s Joseph A. Hall Award for Promoting Diversity, and the Distinguished Alumni Award from the University of Cincinnati, College of Law.
With a career spanning 34 years at Procter & Gamble in Research and Development, Melissa is a CPG expert. She’s served in a leadership capacity within several of P&G’s largest divisions including Global Grooming, Smart Products, Corporate Devices; Global Haircare; Global Pet Care, Snacks and Coffee. She is also an Impact 100 Member.
Woody joined the National Underground Railroad Freedom Center in 2019 building on a career as an entrepreneur, business investor, philanthropist, corporate executive and community leader. Prior to joining NURFC as President and COO, Woody was an executive retiree (+35 years) of global consumer goods leader The Procter & Gamble Company, with a career that was highlighted by the instrumental role in the creation and development of the Swiffer and Febreze brands.
He has been a leader in the Greater Cincinnati community, serving as part of the Jordan Crossing, Bond Hill & Roselawn Revitalization Fund, Allen Temple AME Church and Montgomery Community Church. Additionally, Woody is a mentor through Winton Hills Academy and former board member of the Dan Beard Council of Boy Scouts of America. Woody’s entrepreneurial experience includes being a founding member of Legacy Acquisition Sponsor I, LLC; Founder and Managing Director of CoValCreã, LLC (business consulting); founding director and officer of Allen Temple – Tryed Stone Development, Ltd (commercial real estate development). Woody served three years active duty as a U.S. Army officer.
After graduating from the University of New Mexico, Tom started his business career with P & G and Coca-Cola, for 15 years in various sales, marketing & leadership capacities before moving into the start-up world. His first start-up was with WinterBrook Beverage Group in Bellevue, Washington. WinterBrook grew quickly (making the Inc. 100 list twice) after the acquisition of the LaCroix brand and the introduction of several other “new age” beverages. WinterBrook was sold to National Beverage Corp.
Tom then saw an emerging opportunity in value-added fresh produce, leading a collaboration of several companies to introduce packaged salad to the country. The Fresh Express brand eventually became the leading salad brand in North America and was sold to Chiquita Brands. Tom returned to the corporate world with Chiquita for a few years, before moving back into the start-up world, helping form a new premium brand of salads named organicgirl.
Jack Kraeutler has more than 45 years of experience in the biomedical industry and was appointed Chief Executive Officer of Meridian Bioscience in 2008 retiring in late 2018. He had been the President and Chief Operating Officer of Meridian Bioscience, Inc. since 1992. During his tenure at Meridian Jack expanded annual revenues from $11 million to $200+ million via organic growth and nine strategic acquisitions. In addition he successfully led five public equity offerings. Before joining Meridian, Jack served as Vice President, General Manager for a division of Carter-Wallace, Inc. Prior to that, he held key marketing and technical positions with Becton, Dickinson and Company and Organon, Inc.
Jack has a B.S. in biology from Fairleigh Dickinson University, an M.S. degree in biology and an MBA in marketing from Seton Hall University.
He is a former member of the AssureRx Board of Managers until its acquisition by Myriad Genetics. He is a a retired member of the Board of Directors of the Cincinnati USA Regional Chamber. He is past President of the Dan Beard Council, Boy Scouts of America and currently serves on its Advisory Board and as a member of the Trust Fund Committee. He is also a former appointed member of the Ohio Third Frontier Commission and a former Vice Chairman of BIOSTART.
Currently, Jack is an active member of the Queen City Angels; he is on the board of Sense Neuro Diagnostics and is a board observer for Kurome Therapeutics.
Queen City Angels provide a variety of interactive training sessions for its members. As the organization adds new members, training has become critically important to help individual angels better understand the world of investing; strengthen the overall organization and depth of experts; and provide portfolio companies with more resources that can turn to help them solve a variety of business challenges.
Critical to the success and growth of Queen City Angels is finding new investors to join the group. During the past several years, QCA has worked to expand the number of women and people of color who can bring unique perspectives and experiences to support and mentor QCA’s portfolio companies. This is a key strategic imperative, led by Sue Baggott, and coupled with the Ascent program will help improve the organization’s overall diversity and inclusion.
In addition to increasing investment opportunities to more people, QCA invested in diversity as well in 2019. Out of the 10 investments from the group’s new fund, three were either led by African-American or women founders.
Regarding the group’s standards and practices, as committee chair John Ward embarked led a six-month process (involving 36 of our members) to evaluate and re-engineer our internal workflow processes. The team incorporated practices from angel and other investor groups across the country, documented the all processes, and the result was produced a revised Standards and Practices Guide. The effort resulted in a best-in-class searchable reference document for members to better understand QCA’s workflow process internal workings.