| Follow Us: Facebook Twitter Youtube RSS Feed

Innovation & Job News

Find Your Next Startup Investment Through This New Website

Florida Funders, LLC, a conduit for connecting investors with startups seeking funding, launches in Tampa Bay.

The latest innovation out of Tampa Bay's growing tech scene was inspired by personal experience. Florida Funders co-founders David and Kathleen Chitester, who have started and sold two companies together, know the difficulty of getting funding for a startup firsthand.

After doing some research for their next venture, Tampa -- their own backyard -- caught the couple's eyes.

"We noticed that the Tampa Bay community was starting to embrace entrepreneurs with accelerators and incubators, but financing was not following along,'' David Chitester explains. "We saw a huge gap between 'family and friends financing' and venture capital.''

Florida Funders was created to fill that gap.

The company's main mission: to keep entrepreneurs from leaving the state to find capital.
 
"We are losing too many young, promising entrepreneurs to places like Silicon Valley and Austin,'' Chitester says. "If we can fund some of these firms, they can grow here, and the local community will benefit.''
 
The initial Florida Funders launch rolled out in late March with two established Tampa area startup companies open for financing: SavvyCard and Carvoyant. A third local venture, Alorum, is in "preview'' mode.

Carvoyant was previously accepted into the Gazelle Lab accelerator program at USFSP, while SavvyCard was among the first group of startups accepted into the FirstWaVE Accelerator Program in spring 2013 in Tampa.
 
So how does Florida Funders work?

The company curates early stage ventures and startups seeking investment and lists them online for SEC-accredited investors to review. This part is free. If there is a match, Florida Funders then creates a single purpose fund, or LLC, for the startup company, to be distributed for investment by a third party agent. This LLC is now the "investor'' in the company, and the individual investors/funders are members of the LLC. Investment increments begin at $1,000.

Companies like California-based AngelList and FundersClub have employed this business model, known as online venture capital, successfully.

Florida Funders is self-funded by Chitester and a few angel investors, including partners Randy Greene and Lance Raab. The company operates under a business model of carried interest, based on the success of the investments Florida Funders make in the startup companies it accepts.
 
Florida Funders plans to list 20 to 30 companies in its first year, funding 12-20 of them.

"That said,'' he notes, "we also have to make money ourselves. We have to not only find and fund companies, but they have to be successful for us to get paid.''

Chitester acknowledges that early stage ventures are "always a high risk for investors.''

Florida Funders is less risky, he says, because backers can put smaller investments toward multiple companies. Investors can take advantage of backing several startup companies for the same "$50,000 minimum some venture capital companies require,'' Chitester suggests, "which actually reduces their risk versus one $50,000 investment. If some of those companies are successful, they have a better chance of overall profit.''
 
David Chitester holds a degree in Civil Engineering from the University of Pittsburgh and an MBA from Northern Michigan University. A serial entrepreneur, he has created and subsequently sold several companies including Red Vector, Spanish language social network Questamente, and Pay Per Visit Email, an email service provider. His latest venture, Florida Funders, intends to provide seed money to Florida startups, enticing them to set up shop, create jobs, and pay taxes in state.

Kathleen Chitester attended Rutgers College in New Brunswick and Rutgers College of Arts and Sciences in Camden, NJ. She has more than 30 years of experience in marketing and over 15 years of experience starting companies, including cofounding Red Vector, Pay Per Visit Email, and Latin social network Questamente with her husband. She also cofounded Vetrack, an online continuing education portal for veterinarians, and previously managed Chitester Management Systems, a professional consultancy firm that David Chitester began in 1995 and the couple sold in 2008.

Write: Justine Benstead
Source: David Chitester, Florida Funders

Read more articles by Justine Benstead.

Justine Benstead is a feature writer and editor for 83 Degrees Media in the Tampa Bay region of Florida.
Signup for Email Alerts
Signup for Email Alerts

Underwriting Partners