That’s where guys like Michael Hadjinian and Roger Edwards come in.
Hadjinian, 65, and Edwards, 45, are entrepreneurs in residence for Accelerant, a private venture capital program associated with the Dayton Development Coalition. With the capital and oversight of local investors, both men find fledgling technology companies with promise. They also share with those companies their own hard-won experience.
The idea is to secure a return for investors. But it’s also to create jobs in the Dayton area. Moving a worthwhile idea from the drawing board to prototype to commercialization is tough; Hadjinian and Edwards can show business people a few of the pitfalls.
Last month, Accelerant disbursed awards to four start-ups, a total of $1.75 million.
In June, the Ohio Third Frontier Commission rejected the coalition’s request for $1.8 million in Entrepreneurial Signature Program funding for Accelerant. But Jeff Hoagland, the coalition’s president and chief executive, said Accelerant will continue to search out other start-ups for direct investment assistance.
Bottom line, this is a hybrid venture capital model. If your business fits the bill, Accelerant offers more than a check.
We sat down with Edwards and Hadjinian at the coalition’s Kettering Tower offices. What follows is edited and condensed.
Q: What do successful start-ups have in common? What unites them?
Hadjinian: "Their customers love them. I mean fundamentally, they have to. Unless you're a commodities business and you have a low-cost position, right? You have access to some raw materials or something. An oil well or something. You take those off the table and (talk about) companies that really have to sell and have competitors — you just have to do a really good job for your customers."
Edwards: "The other thing, too, you have to focus on is Mike and I invest a lot of time on people. What a company is offering — what Mike said is 100 percent accurate — but you have to balance, especially when you're making investments in companies, you're investing in people as much as you're investing in the companies.
“The difference between what I would call ‘failures’ and ‘successes’ are people. It’s more important. And I think it’s a disregarded thing with a lot of investments I’ve seen in other areas, across the country. But it’s something Mike and I truly believe in.
“The way we have structured this has been to work with the entrepreneur. To take people that have great ideas, all right, (and) find the ones who are willing to get the right teams in place … a company has to have a well-balanced team.”
Q: The gentle complaint I sometimes hear from CEOs is that it can be a challenge to bring the right people to Dayton. Has that been your experience?
Hadjinian: "No, we've been able to bring the talent here. We look at Dayton companies all the time. We look at a balance. We kind of look at the region. The four counties around Dayton, per se, that's part of our region. We draw people from a little broader area. And part of what we help to do with the (Accelerant I) fund of course is bring people here. If they come from outside and they come here, that's great. And if they start here, that's great, too. We're not investing solely in people who originate from Dayton. If we bring them here, that's good."
Edwards: "That's a huge misconception. I've had enough exposure to the other big cities — Cincinnati, Columbus, Cleveland, etc. And everyone struggles with the exact same thing. We're all struggling. There's no difference, is what I'm trying to relate. Dayton has its own DNA, I always joke. If you look at the talent and skill sets we have here, we have very specific skill sets buried into a lot high-tech companies we have here locally."
Q: Are there misconceptions or myths about Accelerant you want to dispel?
Edwards: "I think this is important. We literally have organized an unbelievable advisory board. Our largest investors, we have a very representative board of not only our largest institutions in town, but also very large angels (individual high net-worth investors) who have been there, done that, did that. What we do is operate independently of the DDC (Dayton Development Coalition) for investment decisions.
So we work with our board. We find opportunities. And we vet those opportunities with our investment board, which are our largest investors. It’s a well-balanced structure with a lot of controls.”
Hadjinian: "Our fund that we're operating now, the new fund, the Accelerant fund — it's got 27 limited partners that are institutions and members of the community, the Dayton community, who are really interested in two things. They are interested in development of the community. And they're interested in making a profit. … And we have to balance those two.
“We do a lot of things that aren’t strictly just to determine if we should make an investment as a venture capital fund. We do a lot of other things.
Know someone who can handle Three Questions? We're looking for behind-the-scenes-but-still fascinating Miami Valley residents with something to say. Send your suggestions to tom.gnau@coxinc.com.
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