Understanding the difference: independent contractors vs. employees

(Disclaimer: The information presented in this article is not intended as legal advice. Please consult with an attorney and/or tax professional before hiring independent contractors or employees.)

Just about every business needs outside help at some stage of growth, but how do you know if you need a contractor or an employee?

A few factors go into that decision — financial, cultural and even legal. Here’s an overview of what to consider when it’s time to build your team.

Get to know the differences

In the eyes of the law (and the IRS), workers traditionally fall into two categories: employees and independent contractors. 

These two types are often described by their respective forms for reporting income to the IRS: 1099 for independent contractors and W2 for employees. Both have their time and place for your business, and businesses frequently use both at the same time, depending on their needs. Below is a quick breakdown of the key distinctions.

  Independent Contractors (1099) Employees (W2)
What should they help with? Specific goods and services Any area of business
Should you train them? No Yes
Should you provide equipment? No Yes
Should they work under your supervision? No Yes
Who is responsible for withholding taxes? Contractor Employer
Should you provide benefits (PTO, health insurance, etc.)? No Yes

Contractors: a business within a business

Businesses often hire independent contractors when they don’t have enough work to justify permanent employees.

David Worrell
David Worrell

David Worrell is a fractional CFO and partner at Fuse Financial Partners. In his role, Worrell works with small and medium-sized businesses that don’t have a robust financial team. He said an independent contractor role is perfect for people you don’t have to supervise, such as consultants or housekeepers.

“1099 is designed as a way to employ experts,” Worrell said. “It's designed as a way to employ people for their technical expertise or ability to complete a job that is not part of your day-to-day operations.”

This means independent contractors, similar to vendors, conduct business on a transactional basis. Usually, a business pays a contractor for his or her work and that’s it.

“You are buying a finished product or a finished service from those people,” Worrell said. “You're not purchasing their time. You're purchasing their output.”

In a sense, independent contractors are in business for themselves, meaning they carry their own liability and are responsible for their own taxes. They’re also expected to use their own tools.

“Technically, a 1099 contractor should bring his own computer and not report to your office every day to use your copy paper and pencils,” Worrell said.

And they can be an invaluable resource as you’re growing your business. 

The contractor cost/benefit analysis

Contractors will often command a higher wage, but could be cheaper in the long run, since they aren’t obligated to ongoing benefits in addition to their wages, as an employee would be. In addition, employers don’t have to pay for taxes for contractors — another source of savings.

“You don’t have to pay FICA, FUTA and SUTA on any 1099 contractors, and that’s equal to [approximately] 7-10% of your wage, so you can save a big penny there,” Worrell said.

There comes a time when it benefits the business to transition from contractors to full-time employees — although that moment can be hard to pinpoint. The cost savings can make it tempting for a business to rely too heavily on contractors, treating them more like full-time employees while classifying them as 1099’s. And that can get companies into trouble. After all, calling someone a contractor doesn’t necessarily make it true. The IRS has its own criteria for determining whether a worker is an independent contractor or employee.

Andrew Tucker
Andrew Tucker

Andrew Tucker is a fractional CFO and owner of AETucker Consulting. Tucker said he has helped clients decide between contractors and employees. In one instance, he advised a client to convert a contractor to an employee when the relationship didn’t pass the smell test.

“Basically, if the employee looks like and acts like an employee, then they’re probably an employee,” Tucker said.  

Employees: a long-term investment

Beyond the legal considerations, choosing between contractors and employees is also a cultural decision. Sometimes, it’s a smart move to fully commit to having a person on your staff, Tucker said. 

“In general, you're going to get more loyalty, in my opinion, from an employee versus a contractor,” Tucker said.

Worrell agreed.

“As a business owner, the best way to build culture is always going to be to have an employee,” Worrell said.

Perils of Misclassification

Be careful of bending the rules – if you do, the potential penalties for non-disclosure could be as much as 40 percent of all wages for previous years.

If you find that you have made a mistake, you don’t necessarily have to wait to get audited to address it. The Voluntary Classification Settlement Program is an opportunity for business to come clean to the IRS and convert workers to employees for future periods, in exchange for a reduced amount in back taxes and penalties.

As of 2020, participants in the VCSP would pay “10 percent of the amount of employment taxes that would have been due on compensation paid to the workers being reclassified for the most recent tax year, calculated under the reduced rates of section 3509(a) of the Internal Revenue Code,” according to the IRS

“So many people get caught up in calling [employees] contractors, and they don't realize it until it's too late,” Worrell said. “It’s the right decision for you if you think you’re making incorrect classifications.”

You can outsource the decision, too

Rather than personally managing workers, some companies choose to farm out their HR functions by hiring a professional employer organization (PEO) or a staffing company. 

These companies can act as employers of record for you and handle all of the administrative workload, such as payroll, timekeeping and claims. They also have tremendous buying power for benefits, albeit at a cost to the customer.

“They can get preferred rates on your health insurance in particular,” Tucker said. “So instead of you having possibly 10 to 15 percent increases per year, you could have 3-5%, which could save a business a lot of money.”

Keep an eye out for changes

As the gig economy has taken root, some startups, such as Uber, have a business model that relies on a roster of independent contractors. That has implications on tax collection, because contractors can fail to self-report their income and that means lost tax revenue for states.

To address that shortfall, states like California have tried to reexamine the independent contractor role with legislation, Tucker said.

“They're actually wanting people like Lyft and Uber drivers to be employees as opposed to contractors, and they very much changed the rules on that,” Tucker said. “So it depends on how many other states get involved with that same methodology.”

But chances are, they’re coming.

“Keep your eye out for future legislation from other states because I’ll bet there's going to be some more.”

At the end of the day, how to hire is a complex decision, with multiple factors at play. Part of our goal at INCLT is to help founders and entrepreneurs build their business acumen so they can set their ventures up for success. That happens through these articles (thanks to our new friends at Kepler Team for supporting our efforts to spread valuable information), as well as through our Venture Mentoring Service, which pairs companies with seasoned business leaders from all areas of expertise.

We are currently accepting applications for founders and mentors. To find out more about our program and to apply, click here.


Ready for more than friends and family money? Here’s what you need to know when you go in search of professional investment

Say your company has a prototype or product on the market, some traction among your target audience and some revenue coming in the door. The concept has been proven; now it’s time to scale. 

That’s about the time many startups hit the pitch circuit, making their case to investors about why the company is worth their money and time. They recognize that scaling takes money — that if the friends-and-family round of fundraising was the foundation, the next round will provide the fuel.

Rob Cummings, William Bissett, Matt McFee, and Angel Rutledge

 

In Charlotte, the number of companies that are ready to pursue the first round of professional investment is relatively small, said Rob Cummings, co-founder of DealCloud and managing director and CTO at Falfurrias Capital Partners. 

“There are a lot of very interesting companies that are very early on in Charlotte, and there are others that have raised venture capital funding and are well on their way. But there’s not a ton right in the middle,” Cummings said.

It’s a symbol of Charlotte’s status as an up-and-coming startup city. As the Queen City gains notoriety in the larger entrepreneurial ecosystem, it’s something that will change, Cummings said. Companies will grow beyond those earliest stages. They’ll start gaining more traction and becoming more attractive to investors.

“It’s a cycle,” he explained. “And those companies are on their way.” 

While every startup is unique, there are some questions they all must consider as they embark on the fundraising process. Here are a few, according to local investors and founders.  

 

Do you know your stuff?

William Bissett is the founder and host of the Charlotte Angel Connection podcast in Charlotte. He’s become a voice for the startup ecosystem in Charlotte, inviting founders and investors and space into the studio for in-depth conversations on the local startup experience. To date, he’s hosted nearly 100 episodes, and in the process, he’s confirmed that fundraising in Charlotte isn’t easy.

“You’re going to be turned down, a lot,” he said. 

Charlotte isn’t a startup hub. And while Charlotte has “boatloads” of money, the city doesn’t have any “dumb money,” as Bissett calls it.

What’s “dumb money”?

“When you go out to San Francisco or Austin or New York, some businesses sold for a billion dollars, and you’ve got 100 early employees who got well compensated through stock. Now, they have money, and they’re going to invest in startups because that’s what they know,” Bissett explains. “Here, there aren’t 100 people who made $10 million and are ready to just throw money at startups.”

That means startups have to earn the money they raise.

“When you’re presenting in front of folks, they want to make sure you know everything about the product. They want to make sure you know everything about your business, too. Your numbers have to make sense. You’ve got to know your market, and you’ve got to show some demonstratable knowledge of your end user,” he said. “Raising money can be done in Charlotte. It just has to be a really good fit.”

 

Do you really need the money?

Angel Rutledge meets with a lot of founders through her work as an investor, advisor and mentor to local startups. Many of them assume they’ll have to raise money as part of their entrepreneurial journey because it takes money to build a company, right?

But Rutledge advises them that raising money isn’t always the best course of action for a young company. She and her husband, Dan, for instance, bootstrapped SignUpGenius, an online event planning and volunteer management tool, until they sold a majority stake in the company to a private equity firm back in 2017. 

“A lot of times, I’ll encourage founders to figure out how they can make progress in their business regardless of the funding they have. And there are so many ways to do that. We have the resources for that in Charlotte,” Rutledge explained.

Ventureprise is one, she said. NC IDEA grants are another, along with mentorship programs like the one offered through INCLT and office hours at Packard Place, where entrepreneurs can meet with a handful of successful founders for free.

“We have what’s needed in the ecosystem for many companies to get started without a round of funding. Bootstrapping a company is not easy. It’s definitely not easy, but honestly, it can be easier than getting on the path of raising money. There are strings attached to the money you raise,” she said. “When you take outside investment, you’re signing up for different challenges.”

Bootstrapping is not an option for every type of company, Rutledge added. But if it is, those companies will have a lot more flexibility and freedom.

“With every bit of equity, you give up your ability to make some choices,” she said.

 

If you do need the money, what are you willing to give up?

Matt McFee is a founding partner of BriteVerify, an email list verification platform, and a startup investor. In his experience, there is a factor to middle and late-stage investing that most founders don’t take into consideration.

Investors coming to the table with serious dollars will have demands. While most founders focus on matters of equity, many investors will also have thoughts on leadership. There’s a chance they’ll want the founder to step aside, in favor of bringing in their own leadership to push the company forward. They may stack a startup’s board with their own selection of advisors. And they may position themselves to have a stronger voice than their equity stake would imply.

McFee, a mentor with the INCLT mentorship program, calls it “the most undervalued result of a fundraise.” 

That doesn’t have to be a bad thing, McFee added. For instance, when he was building BriteVerify, there came a point when he and his founding team realized they had taken the business as far as they could.

 

“It was time for us to walk and put it in the hands of someone who could do something greater,” said McFee, who exited BriteVerify in 2018 after it was acquired.

But it does require asking yourself in advance what you’re willing to do in exchange for investment.

“Maybe raising capital and taking a different seat in your company is something you’re willing to accept. Or maybe you decide you have to be the CEO and have at least this much equity,” McFee said. “But, if you’re an early-stage company that still has to prove you have a strong, valuable, scaled business, you don’t have the leverage you think you do.”   

 

How do you find the money you need?

A good place to start, Cummings said, is by looking for people who have invested in your industry in the past.

“We were ultimately successful with a high-net-worth angel investor who lived in our business and had experienced the pain we were solving for. That was key to our success. So I’ll tell entrepreneurs, ‘Find someone who really knows the industry — experienced the challenges,’” Cummings said. 

Those people could be part of the Charlotte Angel Fund, a powerful network of local angel investors. (Cummings and Rutledge both are.) The Charlotte Chamber of Commerce has put together a thorough list of local venture capital, private equity and angel firms, with contact information. Local accelerators such as Queen City Fintech can offer investment in startups that complete their programs. And Pitch Breakfast, a monthly pitch simulator hosted at Packard Place Uptown, can give entrepreneurs the practice they need to make their fundraising efforts more productive — and introduce them to valuable connections. 

Regardless of the avenue a startup chooses to take, McFee agrees with Rutledge that startups should do whatever they can to come to the fundraising conversation from a position of strength.

“Find a way to get to the point where the business is affording itself. Then you can figure out the right way and from whom to raise money,” he said. “Anything you can do to be able to take your time and have a cash-flow-positive business going into a raise is the strongest advice I can give an entrepreneur.”

At INCLT, we are committed to serving Charlotte’s entrepreneurial ecosystem, through information, advice and mentorship. RMCSoft, a software development firm, supports those efforts by making these monthly articles possible.

 

If you’d like to do your part for local founders, you can sign up to serve as a mentor to a local founder. We are also accepting applications for founders in need of mentorship.

 

You can find more information here

 


The friends and family round — What early-stage startups need to know

A startup at any stage needs money. What varies is how much, and where that money comes from.

We tend to hear a lot about later-stage funding. You may have read, for instance, that Passport recently closed a $65 million Series D round. Less frequent, though, are the early-stage fundraising stories — the friends-and-family rounds. 

And yet that can be some of the most important money a company can raise.

The money you receive when you’re starting out allows you to lay a strong foundation for success moving forward. It also comes with significant personal risks: If you squander friends and family money, you can damage important relationships. 

“It is definitely something that weighs heavy on me at night,” said Christine Nicodemus, who raised $280,000 from friends and family to get her startup, Ascend, off the ground. “It’s one thing to convince your husband that you’re going to drop a great salary at a great job to go do something. It’s another to ask for commitments and votes of confidence and investments from people who are good friends of yours.”

Another layer of accountability

Nicodemus went full-time with Ascend, a gamified goal-setting platform, back in March after making a personal investment in the company and getting funding from a former professor.

“That gave us the funds to go develop what we were talking about,” said Nicodemus, now part of the INCLT mentorship program.

Soon after that, she realized the company needed to hire additional resources. To do that, she was going to need money for salaries, so she turned to another former professor. Then, a close friend whom she met through her church decided to contribute, too.

Those investments have come varying degrees of accountability to the pressure inherent in taking money from family and friends. Her first investor appreciates updates but is very hands-off. He told Nicodemus he just wanted her to “do something meaningful.” The other two investors are more actively involved and diligent in offering feedback on directional questions and other updates, Nicodemus explained.

The investment agreements have also varied between investors. Nicodemus’ first investor, for instance, did a “SAFE” —  a simple agreement for legal equity. The other two investors requested convertible notes. 

What stayed consistent throughout her fundraising process was the ask: Her conversations would always begin with a request for feedback, rather than money.

“That was genuine,” she explained. “We absolutely want the feedback, and based on their reactions to it and their interest level, that determines what questions come next on our side.”

 

No input, please

Drew Bartek, co-founder of Groove Watersports, approached the friends-and-family conversation in a similar way. When the company was raising $140,000 from angels, friends and family, Bartek, who is also part of the INCLT mentorship program, talked to just about everyone he knew. And he opted to be candid from the start. 

“I was very up front about the risk involved with family and friends,” said Bartek, whose company makes the Groove Vest, a life jacket with built-in speakers. “And one of the things we made explicit for friends-and-family investors was that we wanted to update them but are not looking to receive ongoing questions. We disclosed everything we knew to them prior to accepting investment. If there’s an area where you can add value, then by all means set up a call with us and let’s discuss it. But we’re not looking for feedback on various things because then you have 12 different people running your business, and you don’t get anything done.” 

And you’ve got to get things done to have a shot at future fundraising success.

 

When friends and family seed success

Rob Cummings, co-founder of DealCloud and managing director and CTO at Falfurrias Capital Partners, lived through every stage of fundraising during his time at DealCloud, a software platform built to serve the private equity world. And it started with a friends-and-family round. 

For that, Cummings and his co-founder, Ben Harrison, turned to their colleagues at Falfurrias Capital, a Charlotte-based private equity firm. They understood the challenges inherent in the private equity space. And they signed on to invest as friends, rather than professional investors.  

“They invested personal money because they believed in what we were doing,” Cummings said.

A year after that, in 2012, DealCloud raised a seed round — part of which involved collecting more money from those initial friends-and-family investors. Then, the fundraising process stalled. DealCloud did over 100 pitches for its next round, and nothing panned out. 

But that didn’t stop the company from growing. Those early rounds of fundraising had allowed DealCloud to build a solution to a known problem, and the company became profitable, fast.

“By mid-2015, we had over $1 million in annual recurring revenue, and that’s when we became really attractive to VCs. That’s when they started calling us,” Cummings recalled.

In 2015, DealCloud raised $5.3 million. In 2017, it raised an additional $4.5 million. And then in August 2018, DealCloud was acquired, and Cummings exited.

“With early stage, you’re really betting on the team. Can you see the passion with the entrepreneurs? Do they really know their market?” Cummings said. “For us, we had experienced the pain personally, and we could verbalize why we built the solution. And that resonated.”

 

The value of shared experiences

This article is the first in a series about fundraising for companies at various stages of growth. Next month, we’ll dig into what comes after the friends-and-family round, based on the stories of those who have been on both sides: the companies who have raised money and the investors who given money. 

That on-the-ground perspective is a critical part of the work we do within the INCLT mentorship program, which is built on the idea that members of the entrepreneurial ecosystem have a lot to learn from one another. Whether it’s the intricacies of running a business or the strategies involved in raising funds, the experiences of those around us are powerful tools in making the entire community stronger. We are grateful to RMCSoft for helping us share these stories with the community at large.

Want to do your part to help the ecosystem grow? Consider joining INCLT’s Venture Mentoring Service. We are currently accepting both mentors and founders looking to learn. Click here for more information.


Inside the state-funded effort giving North Carolina an edge over the entrepreneurial competition

It started with an old tin percolator.

Calvine Frazier was 8 years old and visiting her grandparents’ farm. Her mother and her grandmother would sit at a table, drinking a mysterious beverage. Frazier didn’t know what it was, but she knew it must be good because it filled the room with conversation and laughter.

So, she poured some into a cup and snuck a taste. It was the best thing she’d ever tasted: coffee. Years later, that experience inspired Frazier to start a business.

But that business – her own coffee shop – needed percolating too, which led Frazier to the Small Business Center at Central Piedmont Community College.

Founded in the early 1980s, the SBC is one of 58 centers housed at community colleges across North Carolina. Providing seminars, counseling and more, the network is set up so anyone looking to start a business in the state can access resources within a 30-minute drive.

Because Frazier’s business meant so much to her, she wanted to make sure it was set up correctly. So, she explored the SBC’s free resources, which helped her structure her company.

“Once you start talking to the counselors, they give you the most upbeat encouragement,” Frazier said. “It’s already in you. They just bring it out.”

With that guidance and a lot of hard work, Calvine’s Coffee has taken on a life of its own since its launch in 2015. Today, the business has two locations and a coffee cart, with a third location planned for 2020. Frazier said she expects to use additional counseling to help with the expansion.

Small Business Center at CPCC

And Frazier is not alone. Last fiscal year, the SBC provided more than 490 hours of counseling to 267 clients, and more than 2,700 participants attended the center’s seminars and courses

Those clients cross the entire spectrum of small business ownership, from novices looking for input on an idea to owners of existing businesses looking to scale. The services offered at the SBC are largely free, with some tuition-based courses, and they include one-on-one counseling, as well as seminars and workshops. It’s a resource center of sorts, allowing small business owners to get help with different challenges at different stages of their ventures. 

Partnership with Innovate Charlotte

SBC has become one of our valued partners at INCLT. While our work focuses on founders who’ve gotten some validation of their idea and a yearlong mentorship experience, they are providing a constant source of information and support for small businesses, from the idea exploration stage through growth and scaling challenges and through a variety of offerings. And when one of us encounters a venture that would be a better fit for the other organization, we refer them along, for the benefit of all involved.

 

Small Business Center at CPCC Innovate Charlotte VMS
Target ventures Small businesses in Mecklenburg County Main street & tech / high-growth in the Greater Charlotte Area
Stage of the business Any stage, including existing businesses We work with companies that have some traction and are past idea only stage
Fee Free (Some tuition-based courses) Free
Main focus Overall business troubleshooting with counseling, seminars and workshops Mentoring, helping founder grow as a leader
Founder experience Novice to advanced  Usually some or significant business experience
Commitment No commitment At least 1 year

Renee Hode

The SBC’s work with business owners starts with an understanding of where they are in the entrepreneurial process, said Renee Hode, executive director of the Small Business Center at CPCC.

“A lot of people just come into the center because they’re thinking about an idea and they don’t know how to get started,” said Hode, who was recently named Small Business Center Network State Director of the Year.

“What we’ll do is set them up with counseling because it’s best to work one-on-one to understand where they want to be personally and professionally. Business ownership isn’t for everyone, so we want to assess their professional and financial goals.”

From there, the SBC can assist with just about any obstacle the business is facing. The staff has specialists in accounting, digital marketing and government contracting, among other areas. Clients can also receive legal advice, a must-have for every fledgling enterprise.

Overall, North Carolina is unique in this endeavor. While the federal government funds its own small business programs such as SCORE, the SBC network is state-funded and helps create and retain 3,800 jobs in the state every year.

“North Carolina takes it a step further,” Hode said. “Our legislators have recognized that small business is the engine of growth.”

The center promotes that growth with workshops and seminars on a wide range of topics, some of which are free. Clients can learn the fundamentals of business or more targeted subjects like marketing on social media. There’s even a course on how to start a food truck.

“Whatever element you’re going to come across in your journey of getting started or growing, we’re going to have some type of training that we can put you through that is focused on those particular areas,” Hode said.

Outside of informational resources, the center also gives clients a way to get plugged into the business community at large, as well as to other resources.

“It’s not only about the training or the coaching that we might provide,” Hode said. “It could be opening a door to the next connection that you need for something else. We all have an extensive array of partners that we work with, and sometimes, it’s just opening that next door by coming in and building a relationship with any one of these entities.”

Together, the collaborative approach at the SBC has helped Charlotte develop an ecosystem of business development resources, Hode said.

“When someone’s looking to start or operate a business, whether it’s a novel idea or concept or it’s something that’s a repeatable type of entity, they should take advantage of all the resources in the community to help support them,” Hode said.

That collaboration is core to Charlotte’s growing ecosystem of support for entrepreneurs — a community of partners committed to working together to provide entrepreneurs and business owners with the tools they need, when they need it. 

Local health-tech software development company RMCSoft is a vital part of that effort, supporting our work to shed light on the work of our organization and others in the entrepreneurial ecosystem.

Interested in getting mentored by Charlotte’s leading executives and entrepreneurs? You can learn more and start your application here.

Interested in becoming a mentor? Submit your application here.


Three female founders going big in finance, music and STEM are joining INCLT VMS

Abi Olukeye is a self-described STEMinist and the founder of Raising Smart Girls, a platform to help get girls interested in STEM. Priya Malani is the founder of Stash Wealth, a financial planning and investment management firm for H.E.N.R.Y.s™ [Stash Wealth-speak for High Earners, Not Rich Yet]. And Arsena Schroeder is the founder of Dear Soul Music Company, the business she built to provide workshops, consulting services and educational resources to independent artists like herself.

“It’s a powerful and diverse group of women with a lot of potential to make an impact on the Charlotte entrepreneurial community and beyond,” said Keith Luedeman, executive director of INCLT. “Now it’s the job of our mentorship teams to help them take things to the next level. It’s also our job as an organization to help introduce them to the community at large.”

Pryia Malani (Stash Wealth), Abi Olukeye (Smart Girls HQ) and Arsena Schroeder (Dear Soul Music Company)

 So here they are, the newest members of the INCLT mentorship program.

 

The STEMinist

Abi Olukeye grew up in Nigeria, where her computer science education consisted of the occasional visit to the computer lab.

 “At the time, we didn’t have laptops. It was just that one lab. I knew what a computer was, but it didn’t come alive until I came to the States. And I wanted to learn everything about it,” Olukeye recalls.

 But that interest in technology put her among the minority. There just weren’t that many girls and women pursuing careers in technology. An advisor in her American high school even cited a research study that showed girls like technology less than boys. And yet her experience had been so different. She had fallen in love with technology and computers, and she began to wonder what would happen if STEM was taught in a different way — one designed to appeal specifically to girls.

 Fast forward to 2019, and Olukeye continues to find herself among the minority when it comes to STEM. Despite the fact that women make up more than half the workforce, they hold just 26 percent of tech jobs.

 “Digging into why and the motivating factors, I realized that the missing piece was what’s going on in the home. Everyone assumes parents should just know how to do STEM activities at home, and there’s no true guidance,” Olukeye explains. “If your child wants to be a professional dancer or football player, you know what to do. That’s not the case with STEM.”

Abi Olukeye

 A year ago, she launched Raising Smart Girls to solve that problem. It’s a digital platform designed to provide parents with the tools and resources they need to help them implement STEM activities at home.

 “We want parents to find what they need and create a path of STEM exposure that allows their daughters to be informed decision makers. How do you match what they’re interested in to what the possibilities could be?” Olukeye says.

 To date, Raising Smart Girls has built its reach to about 30,000 parents, who connect to the platform via email, social media and its website. The company is working with fifth-grade girls at a local elementary school for a yearlong pilot program focused on a creative exploration of STEM. And Olukeye is raising funds to build an AI-driven navigator that would allow parents to create their own at-home learning plans.

As all of that is taking shape, Olukeye is feeling an acute need for mentorship, which brought her to INCLT.

“I have several advisors but not a permanent advising team who’s holding me accountable,” she says. “Being able to have INCLT fill that gap is really a dream for me. It will help give us the bench strength we need to push forward the way we want to.”

 

The financial guru (for millennials with cash)

Priya Malani is new to Charlotte. She came here earlier this summer after spending nearly six months traveling up and down the East Coast, looking for the right city to grow her seven-year-old startup, Stash Wealth.

 “Charlotte was last on our list, and once we landed, it immediately felt so supportive,” Malani says.

 From her office in the new WeWork space at the RailYard South End, Malani tells her entrepreneurship story candidly, with the sort of raw, unfiltered perspective that has come to define her brand.

Priya Malani with her co-founder Rob Kovalesky

 She was a ballet dancer growing up and began dancing professionally in college. She danced 50 hours a week, while going to school full time. It wasn’t a career that would stand the test of time, but as Malani describes it, it was the best possible training ground for entrepreneurship. A career in dance requires commitment and stamina. You sacrifice a lot. The same is true when you’re running your own business, she says.

 “True entrepreneurship takes time,” she says. “It also sucks. It’s painful. You give up friends. You give up sleep.”

 She particularly likes the well-worn quote from Biz Stone: “Timing, perseverance and 10 years of trying will eventually make you look like an overnight success.”

 Malani hasn’t quite been at it for 10 years, but she’s getting close. She created her LLC in 2012, while she was working for Merrill Lynch in New York. She didn’t have the oft-described “a ha moment”. She doesn’t believe in them, actually. But she did start to notice an opening in the financial services market: Companies like Merrill Lynch wouldn’t do business with a client unless he or she had at least $1 million to invest. That ruled out an entire population of young professionals with good jobs and hefty salaries who just hadn’t built any wealth yet.

 “We decided, ‘Let’s start working with people who are younger, who are on their way to being wealthy but who need advice and guidance early on,” Malani explains. “That’s hard because their friends aren’t buying financial advice. They’re feeling young and invincible. But the truth is, the sooner you start, the sooner you get your financial sh*t together, the less you’ll have to compromise down the line.”

 She gave her target demographic a name: H.E.N.R.Y.s — high earners, not rich yet. And along with her co-founder, she took the concept to market with a brash, edgy voice that stood in complete contrast to the stuffy formality of Wall Street.

 The company’s tagline is, literally, “get your financial sh*t together.”

 Now, Stash Wealth serves clients in over 35 states. The company has been cash-flow positive since 2016, which is also when Malani’s co-founder joined the company full time. The average client is 32 years old, earning $180,000 in income, and Stash Wealth appeals to its target demographic with the promise of helping them live their best lives.  

 “Most of Wall Street is about saving for retirement: ‘Don’t buy the latte. Don’t go over budget.’ We don’t want to tell them ‘no’,” Malani explains. “And if you have your financial sh*t together, you should buy the Louboutins. You should go to Thailand and Bali. You can have your rosé, frosé, avocado toast brunch.”

 Now, Stash Wealth has come to Charlotte as part of its plan to grow the company significantly in the next 24 months. The company is hiring, and Malani is looking to her INCLT mentors to gain the insights she needs to make the move a success.

 “I’m excited about our mentors. They have really good experience and are all very successful,” she says. “We’re looking for people who can help us get to the next level. And in Charlotte, if someone says they’re going to do something, they’re going to do it.”

 

The business-minded musician

When Arsena Schroeder went to college, she had half a million dollars in scholarships.

 It was enough money to finance her entire education, from bachelor’s degree to Ph.D., and more than enough to kickstart what she assumed would be a corporate career.

She was wrong.

 While she was in college, she started writing songs. Then, she did a few recordings. In 2010, she got her first gig. She’d done internships at Bank of America and on Capitol Hill, but two weeks before her college graduation, she decided to pursue music full time.

Arsena Schroeder

 “One of my advisors said, ‘We think you like music more than you like business,’” Schroeder recalls.

 So she started performing and touring. She was an independent artist, responsible not just for the writing and recording, but also the marketing and booking. She soon hit a point where she was performing up to five times per week, and she realized her pace wasn’t sustainable.

 “So I started being more open to some of the things people requested of me,” Schroeder explains. “People asked about how I did my marketing, so I started consulting with other artists. I started teaching the creative side, too, giving voice and guitar lessons.”

 Demand for those services grew, and in 2017, Schroeder formed Dear Soul Music Company, which provides business resources to independent artists.

 “The music industry is changing. Record labels aren’t making their money from records because people are streaming it for free. Artists and labels are having to find other ways to generate income,” Schroeder says. “My business exists to assist those artists. We are bridging the business and artistic world and figuring out how they can go hand in hand.”

 That work has caught the attention of larger creative agencies, who have asked Schroeder to speak to the artists signed to their labels.

 “The agencies are telling me they’re just salespeople. They’re just trying to get the artists booked as much as possible. That means the artists need to understand what is that unique thing they offer,” Schroeder explains. “The artists need to understand there is more you need to do than just sit around and wait to be booked.”

 Schroeder has also started offering free live concerts to feature independent artists. The Arts and Science Council Culture Blocks have sponsored several of her events, which allows the artists to get paid and the audience to enjoy the performance free of charge.

 “I curate these events because those are the events where our artists get exposure to people who will become their fans. It brings people who respect music together with people who produce it,” she says. “And a lot of those artists go on to do other ticketed shows.”

 Now, Schroeder can see the potential for scale in her business. But she’s reached the limits of what she can do on her own.

 “I’m the first person in my family to go to college and to have a business, so I’ve been figuring it out as I go. I live online trying to get advice. I watch all the videos. I read all the books. But having real-life contact with someone who’s done all these things will be invaluable,” she says. “I threw the whole business side of myself away when I left school, and what I didn’t realize was, I was navigating my music career with everything I took away from my business world. INCLT will plug me back into people who speak that language.”

 Over the next year, Schroeder and the other new additions to the INCLT mentorship program will work hand-in-hand with a dedicated group of mentors to scale their businesses. Thanks to our ongoing support from RMCSoft, we will continue to tell their stories as they become more deeply entrenched in Charlotte’s entrepreneurial ecosystem. 

Interested in getting mentored by Charlotte’s leading executives and entrepreneurs? You can learn more and start your application here

Interested in becoming a mentor? Submit your application here

The more we grow our program, the more we can help strengthen our local startup community.


Leslie Vander Baan, Andrew Tucker and Dan Comisar

Why mentorship matters

Leslie Vander Baan, Andrew Tucker and Dan Comisar
Leslie Vander Baan, Andrew Tucker and Dan Comisar

Leslie Vander Baan has been there.

She’s built and exited two businesses. She’s bootstrapped and raised money. She’s struggled and succeeded. And she wants to put all the lessons she’s learned in the process to good use.

“When you’re starting out, you may not have a board or a group of strategic advisors, and yet you have questions. Where do you go to get those answered? What attracted me to the Innovate Charlotte (INCLT) mentorship program is that we are providing that resource for founders,” Vander Baan said. “I knew from my experience as a founder that having a group of strategic advisors was a need, and it was a need I was looking to solve.”

Vander Baan is an INCLT mentor, one of many local leaders who have chosen to give their time and expertise to entrepreneurs building businesses in the Queen City. They aren’t all entrepreneurs. Some are subject-matter experts in law or finance. Others have lengthy track records with large local organizations. But they all share a desire to support founders looking to build new businesses right here in Charlotte.

That pool of mentors has grown significantly since INCLT launched the Venture Mentoring Service more than a year ago — not just in number but in diversity, said Keith Luedeman, INCLT’s interim executive director.

“Over the past 18 months, we’ve created more structure for our mentors and offered more training, which has opened the door to many more leaders who may not realize the value they can provide to local founders,” Luedeman said. “We also want to let people know there’s no right time to get involved. We’re constantly interviewing new mentors and founders for the program, so if you’re thinking about it, don’t wait, reach out to learn how you fit in.”

Diversity and structure

Vander Baan joined the program at a time when she was looking to give back.

She spent time meeting with various founders and investors in the entrepreneurial ecosystem, but when she found out about the mentoring program through INCLT, she liked the infrastructure the program provided, as well as the diversity of people involved.

“It allows me to volunteer and make an impact in a meaningful way, with clear guidelines to ensure all benefit from the commitment.” Vander Baan explained. “You’ve got people from diverse backgrounds with depths of experience who can lend input, and they’re doing it because they recognize the value that it would have been to themselves and are interested in paying it forward.” 

Vander Baan has been working closely with Carol Waggener, the founder of Bold Missy Brewery, as part of the program. Together with a few other mentors, Vander Baan has been helping Waggener develop the business in a manner that would be attractive to investors. They’re also working on employee development, strategic partnerships, product expansion and sales enablement, so Waggener can continue building her business.

“I understand what she’s going through, and I care about seeing her succeed because not only is it good for her, it’s good for her employees, and it’s good for our community,” Vander Baan said. “The fulfillment I get from knowing I’m pinch-hitting for someone that needs it means a lot, because I’ve been in the trenches and this is the type of support I would have wanted to have.” 

Founder-centric

Dan Comisar spent more than 25 years working in HR roles with big financial companies, from AIG to Lehman Brothers, Wells Fargo Securities to Bank of America. About four years ago, Comisar decided to use that experience to give back, first as a mentor with Queen City Fintech and now as part of the INCLT Venture Mentoring Service.

“I got to the point in my career where I really got excited about helping younger companies grow and build their strategy,” Comisar said.

Much of that work has been focused on the fintech space, given his past experience in large financial institutions, but INCLT offered him the chance to diversify his impact.

“I think about INCLT as a component of the overall picture in our community, but an important one. It’s got a much broader charter than QC Fintech or CLT Joules. That’s attractive to a broader group of founders, which I think is good,” Comisar said. 

The program also allows him to focus on the founder above all else.

“That’s something different about INCLT: It’s totally founder-centric,” Comisar explained. “A lot of accelerator programs or incubators are mostly focused on growth. This is more of what I think about as pure mentorship. You’re really there to support the founders, and as long as they’re committed, they generally get a lot out of it.”

 Relationship building

Andrew Tucker is the founder of an independent consulting firm, AETucker Consulting, that provides outsourced CFO services to companies. His business revolves around helping companies manage their finances so they can grow, but typically, his work is limited to companies that are at least five years old. 

When he learned about INCLT’s Venture Mentoring Service, he saw in it the possibility to help companies at earlier stages — and to get exposed to a world of new ideas.

“As part of the program, I’m getting to see all these people with all these different ideas and getting to understand what’s really happening in Charlotte, other than the humongous companies out there,” Tucker said. “At the end of the day, they’re not the ones who create jobs. It’s the small to midsized, privately held companies that create jobs.” 

In its pilot year, INCLT only accepted a set number of mentors, so by the time Tucker applied, the program was at capacity. But he kept in touch with Jack Heil, one of the first INCLT mentors, who continued to tout the program, its impact and the relationships he had built as a result. He encouraged Tucker to get involved, so Tucker did.

Now, Tucker is working with Advent Coworking and Step In Sock, which makes hands-free shoe covers. At the same time, he’s strengthening his own network as he builds relationships with other mentors.

All it costs is a small commitment of time.

“It’s a great opportunity for people who are willing to share their knowledge, want to share their knowledge and can actually provide some good quality feedback to help them with whatever hurdles they may have,” Tucker said.

It’s all part of a broader effort to build Charlotte’s entrepreneurial ecosystem — and we are grateful to RMCSoft for sponsoring our communications and helping us tell the story of our impact to the community at large.

Interested in becoming an INCLT mentor? We are accepting applications now. Check this section for more information and to apply today. 

Are you a founder looking for mentorship? We can help. Click here for more information about how to get involved.  


Getting on board — How INCLT is preparing startups and seasoned leaders for mentorship success

The Innovate Charlotte (INCLT) Venture Mentoring Service looks very different today than it did just over a year ago, when the program officially launched in the Queen City.

For one, INCLT has welcomed a total of 19 companies looking for mentorship into the program (including 12 currently enrolled) and added more seasoned business veterans to its pool of more than 35 mentors. But the biggest changes have happened behind the scenes — the team worked on mission, vision, and values for the mentoring program, and documented the processes, specifically the on boarding component that forms the foundation of the program.

As with any startup, once you get your MVP out into the market, that’s when the real learning starts to happen.

Igor Gorlatov, VMS Operations Manager

“Over the course of the past year, we learned there was a lot more we could do to educate and support not just our mentors, but also the companies taking part in the program,” said Igor Gorlatov, VMS operations manager at INCLT.

The INCLT leadership team drilled it down to three core goals to improve the onboarding process and make the program more powerful for both mentors and companies.  

“We needed to improve transparency and ensure both companies and mentors understood the opportunities and challenges that would come with the program. We needed to get everyone focused around how to maximize the impact of the program and to understand that it was up to the founders to be accountable to themselves and to their mentoring team. And we needed to ensure all parties respected the process and were committed to showing up, taking notes, responding promptly, listening and doing what they said they were going to do,” Gorlatov explained.

To accomplish all of that, INCLT decided to start at the beginning.

The startup onboarding process

On the company side, the onboarding process begins when an application comes in from an
interested founder. INCLT conducts an initial screening to ensure the company hits certain
baseline requirements:

  • Coachable founder(s)
  • The founder is already working full-time on this venture, or is planning to go full-time in
    the near future.
  • Some paying or at least pilot customers
  • All founders are able to meet with mentors in person

From there, the INCLT intake committee meets with the prospective mentees.

“The intake committee is a group of mentors who talk with the prospective founders to make sure they’re coachable and that they understand what the program is about,” Gorlatov explained.

When the intake committee recommends a company move forward, that company participates in a two-hour onboarding session to go over the history of INCLT, the core principles of the Venture Mentoring Service and the overarching goal to create a program that benefits all parties involved.

“During that meeting, we’ll actually look into specific situations, such as what to do if you have a meeting scheduled with your mentors and then you get a call from a potential investor at the same time. What do we consider appropriate behavior in that instance?” Gorlatov said.

Then, the first three months of the program are considered another trial period, he added.

“The goal is to figure out if the founder is actually coachable: Are they willing to do the homework, commit to growing the business and learn together with mentors? Usually that’s decided within the first three meetings,” Gorlatov said. “In that time, we’re also able to find the right mix of mentors for the team and to ensure that the founder and the mentors are having a truly good experience with the program.”

Wendy Hickey, the founder and executive director of ArtPop Street Gallery, joined the program as a mentee earlier this year, after going through the revamped onboarding process.

“The process allows founders to be clear with the mentors about what they need most from them. At the same time, we as the founders learn how our responsibility to the project allows for a mutually beneficial relationship and commitment,” Hickey said.

The mentor onboarding process  

On the mentor side, the onboarding process begins when INCLT receives an application from an interested individual. If the candidate seems like a good fit, Gorlatov conducts an interview.

“I’m learning about their background and career and the lessons they’ve learned in life. But one of the biggest roadblocks is time commitment. Our expectation is that a mentor commits one year to the program and spends eight hours a month with us. It involves mentoring two ventures, attending a monthly mentoring session and doing some communications via email in between,” Gorlatov said. “It means that the mentor needs to be at the stage in their life when they have the time to commit to this program.”

If the mentor is a fit, he or she takes part in a two-hour onboarding session to go over principles of the program, which originated at MIT, as well as actual case studies that help define how these principles apply to real-life scenarios. Then, the mentors can select the companies they want to work with and start helping local founders build strong, thriving companies.

“We have over 35 mentors, and they are referring their friends because they’re enjoying the experience. They get to learn from each other. They get to be part of a community, and they get to provide guidance for the challenges that early-stage startups are facing,” Gorlatov said.

One of those mentors is Judith Jeffries, a former executive with Carolinas Healthcare System, who appreciates the value the onboarding process brings to the experience.

If there is a conscious effort to introduce the mentors to mission, vision and each other and subsequently the culture, trust is built,” Jeffries explained. “Leaders often want to be so helpful that they could defeat the purpose of mentoring. Keeping the mentors from enabling is essential for a successful mentoring program.”

And the more people learn about the benefits of what INCLT provides, the more people are aligning with the program. RMCSoft, for one, has signed on to sponsor INCLT’s monthly publications and help the organization continue spreading the word.

“We are proud to support an organization that is committed to consistently improving and growing its mentorship program overtime. It’s also exciting to be of assistance to mentees who need advanced software development talent and expertise,” said Olga Muller, Director of Business Development at RMCSoft.

INCLT is currently accepting applications for companies and mentors looking to take part in the Venture Mentoring Service.

Apply to get a team of mentors

Apply to become a mentor with INCLT

Subscribe to our Newsletter

Want to learn more about how to support INCLT? Contact Igor Gorlatov at [email protected]


Meet the new class of startups looking to take advantage of INCLT’s post-pilot mentorship program

Wendy Hickey, the founder of ArtPop Street Gallery, is at a pivot point in her journey of building a sustainable organization.

Kevin Giriunas, the founder of Advent Coworking, wants to find the “secret sauce” that fuels his business.

Marc Mataya, the founder of Leaf Burrito, is looking to build a manufacturing facility and create anywhere from 250 to 1,000 jobs.

They’re all facing different challenges, but they all came to the same conclusion: They need help to get where they want to go.

That’s why all three founders applied to take part in the new class of Innovate Charlotte’s Venture Mentoring Service. The program is modeled after the mentorship program used at MIT in Boston. Innovate Charlotte (INCLT) brought it to the Queen City last year to give local startups the opportunity to harness the power and expertise of seasoned mentors as they build thriving, sustainable and profitable businesses. NC IDEA lent its support to the program in the form of a grant in November of last year.

The Venture Mentoring Services launched in a pilot stage, pairing 10 startups at a variety of stages with teams of two to five mentors. As the year progressed, INCLT leaders began to study the program’s processes, its people and its impact.

As with any startup, the goal was iteration, right from the start, said Keith Luedeman, executive director of INCLT.

INCLT had a playbook from MIT to start with, but it quickly became clear that the implementation would require a fair amount of customization to suit the needs of Queen City startups. Expectations needed to be set among the companies receiving mentorship; this was about getting better and stronger as an entrepreneur, not just about making connections. The selection process for startups needed to be more intentional, with diversity a core factor to consider. And the program needed to work more diligently to assign startups to mentors based on their specific needs, Luedeman said.

“We tried a lot of different things during the pilot, as we should have. We learned a lot about what we’re looking for in companies and mentors, and we are continuing to refine the teams so we’re getting folks value sooner than we were during the pilot,” Luedeman said. “Now we have companies in a lot of industries, at all different stages.  It’s a very exciting and passionate group.”

In addition to ArtPop, Advent and Leaf Burrito, the new class includes:

  • Invoira, an invoicing software company;
  • Maze Services, a platform that connects clients with mobile hair and nail specialists;
  • Step In Sock, a company that manufactures a reusable shoe cover;
  • Genubot, a machine-learning platform for students taking calculus;
  • SPREAD, an online platform and magazine for creatives;
  • Dineamic Smart Signage, which offers marketing technology solutions for restaurant and retail brands.

And while they all had different reasons for wanting to take part in the INCLT Venture Mentoring Service, they share a common understanding of the value that a team of unbiased advisors can provide.

“Mentorship is a knowledge springboard to help you grow faster and more efficiently,” said Giriunas, of Advent.

“Receiving guidance from others will contribute to our success and push us to challenge our current way of thinking,” said Samonica Ngo, of MAZE.

“The venture mentoring program at INCLT is the perfect opportunity for us to leverage the collective knowledge and experience of Charlotte’s best and brightest during this stage of our company’s growth,” said Jake Corday, of Dineamic Smarter Signage.

The new class of companies represents a range of industries and stages, while its founders represent different genders and ethnicities. Of the 16 founders who are part of the program, nine are either women or minority male founders. And that is by design, Luedeman said. “We want the next generation of successful entrepreneurs to be more representative of the overall population of Charlotte, so diversity will remain a core focus,” he said.

The evolution of the mentorship program is symbolic of the evolution of INCLT as a whole. The past year Logo of RMCSofthas been about testing and iteration so that the organization builds a resource the city’s startup community needs now. And startups have started to take note and lend their support: Local software development firm RMCSoft, for instance, recently agreed to support INCLT’s newsletter.

“It all comes down to product/market fit,” Luedeman said. “We know there’s a need for support in Charlotte’s entrepreneurial ecosystem. The question is, what are the best ways our organization can help? We’re learning more and more every day, and the plan is to continue doing just that.”

INCLT is currently accepting applications from companies and mentors looking to take part in the Venture Mentoring Service (Interested companies should be beyond the idea stage, with some traction or validation and preferably at least one full-time employee.)

Apply to get a team of mentors

Apply to become a mentor with INCLT

Want to learn more about how to support INCLT? Contact Igor Gorlatov at [email protected]


A conversation with Keith Luedeman

Changes at Innovate Charlotte were formally announced last week, including Walt Frye stepping down to pursue other interests and passions around entrepreneurship. Keith Luedeman, a local entrepreneur and contributor to StartCharlotte, has agreed to volunteer as the interim leader of Innovate Charlotte as the organization evolves during this next stage. We caught up with Keith for a short interview to provide some answers about the transition at Innovate Charlotte and the path forward.

Keith, why did you decide to become the interim lead at Innovate Charlotte?

Because I believe in the mission: supporting the Charlotte entrepreneurial ecosystem. I’m at a unique time in my life where I have time to contribute as a volunteer, and this is one of my passions. This role at Innovate Charlotte/CRFE seemed like a natural fit, and there was a need.

Over the past year, the groundwork has been laid by inClt with the MIT VMS Mentoring program launch, the EO Accelerator founding, revamp of the website and pilot fundraising project with StartCharlotte. With Walt Frye moving on, I agreed to step in to make sure that the organization would be able to bridge from this first phase of its existence to its next phase with renewed city support. There is a lot more to do, and I thought it made sense to continue and evolve this organization as opposed to a de novo new organization at some undefined point in the future. Charlotte has a lot of raw materials to continue our growth as a great city in which to start a business.

Can you share with us how you and other stakeholders reached this decision?

I’ve had a long history with CRFE, the precursor organization to Innovate Charlotte. I was an original member of the board when it formed back in 2012. I was on the board until 2015, when I rolled off because of some other obligations associated with the sale of my startup, goodmortgage.com. I rolled back onto the board a couple of months ago as I saw the potential of what inClt could help accomplish.

As we were looking at a new direction for the organization, we felt having more entrepreneurs involved would benefit the cause. We looked around for who could step up in this interim role and who had familiarity with this position, and because most entrepreneurs are heads down in their business, that made it a pretty short list. Since I was free after a recent exit, I had the time, the passion, ability to volunteer and the familiarity with the organization.

What is going to change about Innovate Charlotte and its mission with you stepping in?

The good news I have is that we now have the city’s support for the next three years in the form of seed funding. We are going to continue building out the MIT Venture Mentorship Program and the EO Accelerator. We are looking at including other pillars and initiatives under inClt, but we’re not quite ready to announce those yet.

At the same time, Innovate Charlotte is currently in transition, so the mission and the vision for this organization are going to be refined in the next couple of months based on input from all relevant stakeholders in the community. The more we can involve entrepreneurs and entrepreneur support organizations in the leadership of the ecosystem, the better for all. We expect disagreements and lively conversation, but the key is, we will have conversations. Communication is key and has been noted as an area where we all can get better.

As I mentioned, we have an organization that is seed-funded by the city. On the other hand, we also need to provide a relevant value proposition to corporate and individual donors who want to support the startup ecosystem financially. What I would like to see happen is for Innovate Charlotte to have funds to advance its mission, and also to have an advisory board of entrepreneurs who are going to help decide on the best way to distribute these funds in a transparent way. That’s good for the city and its growth.

What are the major challenges you see yourself facing in the near future?

Nurturing an ecosystem is challenging. And it’s nurturing; it’s not anything you can order up and control. If you look at other cities and what they’ve done, the models are mostly different: They depend on the players and the funding sources. And it is up to all of us to find out what’s going to work for Charlotte. It’s a special place with special people, and we need to play to those strengths.

During the last six months of meeting a ton of players in the ecosystem, I’ve heard some common complaints. A lot of groups are heads down doing great things, and perhaps not aware of what other players are doing. That leads folks to think we are fragmented and uncoordinated, when in fact we’re just lacking some communication. There is a fair number of bridges that need to be built. Given the amount of healthy skepticism in the startup community, this is probably the biggest short-term challenge. Unless we show better coordination to donors, raising funds will continue to remain an issue in the foreseeable future. They are not necessarily used to the chaos that is a startup, and we need to show what we can accomplish in their terms if we want their support.

What gets you excited about the future?

I’ve spent the last six months meeting a lot of players in the startup space in Charlotte. I am very enthused about the possibilities of what’s going on. It is so much better than it was three years ago. It’s tremendously better than it was 10 years ago. I want to build on that.

I’m a glass-half-full kind of guy, and it will be hard to convince me that we can’t win in this race.

There has been a lot of great news: Time magazine and Yelp recently named Charlotte the top up-and-coming city. Our percentage growth with tech talent has been absolutely enormous. Does it mean we are perfect or great? Not yet; there is still a lot of work to be done. We need to be a city where you have the resources and support to become a startup, with nurturing across all the steps along the way all the way through exit — and then re-engaging as an investor and mentor.

When startups grow, you create jobs. And to keep growing the city’s economic base, we need these high-paying jobs to keep the new folks moving to town each day here, and to create mobility opportunities for all Charlotte citizens.

There are a ton of groups out there who are doing a fantastic job, and our job is to absolutely support them.

What help and resources do you need to accomplish this?

I need communication and an opportunity to hear the needs of the folks doing the day-to-day work. From the top, I am reaching out to mentorship programs in other cities to learn best practices. I’m reaching out to state organizations that support entrepreneurship. I am having meetings with people who are potential sources of funds to support the mission. The willingness to have a conversation is going to be important. We need to create more opportunities for people to invest in startups here, and then create wealth.

The studies and research inClt has done so far got us to where we are today: The city decided to fund us. Now we need to bring it to the next level in terms of better understanding of what various ecosystem players are doing, planning to do, how they collaborate and what would it take for them to get to the next level. Because we want to help, we are going to be asking a lot of questions.

Charlotte has had a great tradition of being an entrepreneurial city. Consider the Belks, the Levines with the Family Dollar, Hugh McColl with NationsBank, Ed Crutchfield with First Union and so on. Today we have success stories with AvidExchange, LendingTree, Peak10/Flexential and Red Ventures (and more). Some people look at these companies and say, “they aren’t startups; they’re too big.” We should never forget that, at some point in time, they were startups, and Charlotte nurtured and supported them. This is what we need to do for the next generation of entrepreneurs. After all, don’t we want more big company success stories, too?

If we are successful and able to channel funds to organizations to amplify the great work they are already doing, we can help the ecosystem as a whole.

It takes a village, and I think we have some very cool folks working in our village of Charlotte.


Change of Direction and Leadership

Since 2012, The Charlotte Regional Fund for Entrepreneurism (CRFE) has worked with the City of Charlotte, Charlotte Chamber and its entrepreneur community to progress building the local entrepreneurial ecosystem.  From ecosystem research, supporting local partners and events, and bringing programs like the MIT Venture Mentoring service to our community, CRFE’s accomplishments would not have been possible without the active engagement of the Charlotte entrepreneurship community.

Over the next 12 months, CRFE will evolve into InCLT Labs. InCLT Labs will be applying entrepreneurial principles, collaborating with the City of Charlotte and community entrepreneurs, and executing with entrepreneurial spirit across several defined program areas such as minority and women small business capacity-building, smart cities innovation, entrepreneur mentoring, and ecosystem support through grant-making.

As part of this new direction, Keith Luedeman will serve as the interim Executive Director of InCLT Labs.

Keith is a successful entrepreneur and recently exited from his company GoodMortgage.com.  He has agreed to do the interim roll in a volunteer capacity.  Please join us in thanking the previous Executive Director Walt Frye for his service to CRFE and welcoming Keith into this new role.

We are excited about inCLT Labs and will be sending out more information in the upcoming months.