Meet the Guy Who Has the Region's Wealthy Looking at Investing in Start-Ups
He stood in a conference room at the Northern Kentucky Chamber of Commerce offices in Ft. Mitchell, making his pitch to some of the region's wealthiest men. Zach Green was not new to entrepreneurship. His glow in the dark technology has brought in $2 million in sales in the past couple of years. The former Eli Lilly brand manager was motivated to create a silicone band using photo luminescence technology that would be used by his fellow volunteer firefighters.
Soon, his idea would be on helmets and equipment at fire departments all over.
And now it's used to highlight exit signs and other parts of buildings and arenas like the Bank of Kentucky Center at Northern Kentucky University in Highland Heights.
"We need to solve a problem in a unique way, we need to have an unfair business advantage, and we need to be able to succeed with distribution," Green said, having absorbed the key points that have to be made during an investment pitch. The money men that surrounded him in the cramped room came from all corners of the region and all areas of expertise: business, politics, fundraising, finance. Some nodded, some took notes, some asked questions, some left in the middle of the presentation, and some undoubtedly got their checkbooks out.
Green was looking for a $200,000 investment for Foxfire that his presentation indicated would have high growth potential. He even brought on an executive to run the day to day business aspect of the company while Green developed his position as face of the operation. (That executive, by the way, sold a financial institution for $350 million.)
When Green flipped off the lights in the conference room to show how his product works -- and will always work, even when generators fail -- it was more than his technology that lit up the room. The light bulbs over the heads of these would-be investors also shone bright as many of them clearly saw a winning venture.
This was not the first time this group of power players had gotten together to throw their quarters into the slot machine of entrepreneurship. They heard pitches in January, too, after a get-to-know-you meeting last fall at the Hofbrauhaus in Newport in a room that offered a medieval-like setting as these guys learned the ins and outs of investing in start-up companies in a new Kentucky now equipped with Angel Investor Tax Credits, a sort of protection for a high percentage of the money invested in risky wide-eyed entrepreneurs, approved in Frankfort last year.
At the center of it all is Brad Zapp, the financial whiz and champion of the start-up who founded and then sold Covington-based Legacy Financial and is now on to a start-up of his own: Connetic Ventures. As entrepreneurs fumble their way towards funding, and interested investors seek opportunities, Zapp is there as a translator of sorts. He can visualize what the start-up needs, convey that to an investor, and ultimately (and ideally) make a deal happen.
“We’re a uniquely young group of investors with a median age of just 41 years,” said Zapp, after Connetic was awarded $2 million in tax credits from the Kentucky Investment Act Fund in January. “That’s exciting because we’re able to tap into a previously unused source of capital.” Already, fifty angel investors are rolling their dice through Zapp and his fund will have roughly $5 million.
Walking into Zapp's office at the Northern Kentucky e-Zone in the Republic Bank building on Madison Avenue in Covington, it's not obvious that so much important work is being done in such a drab space. The e-zone's track record, however, includes Covington technology staples like C-Forward and TiER1. A new space is on the immediate horizon, though, and with chief operating officer Meena Meddali, Zapp will take his knowledge and enthusiasm to street-level.
Next week, Zapp will speak at the monthly Covington Business Council luncheon at the Madison Event Center where he will detail what exactly Northern Kentucky's first angel investment start-up fund can do and what it hopes to accomplish. To register, click here.
Northern Kentucky is the focal point of the state's new economy, Governor Steve Beshear said last year when he came to Covington to sign the Angel Invesment Tax Credit law. That signing took place at UpTech, the informatics start-up business accelerator on Pike Street where Zapp is the fund manager, and where the third class of businesses is currently growing. Next door, Bad Girl Ventures, a female-owned business-minded fund, will soon move from Cincinnati, and a block away on Russell Street, bioLOGIC, the life sciences incubator where companies like Bexion Pharmaceuticals, which is working on a cure for cancer, are growing. In Highland Heights, Northern Kentucky University has its new College of Informatics in the jaw-dropping Griffin Hall.
Northern Kentucky is working to emerge as a leader in informatics and new technology start-ups with a strong entrepreneur ecosystem. As that growth continues, expect to see Zapp at the center of it all.
Story & photos by Michael Monks, editor & publisher of The River City News