BRATTLEBORO—Members of a biker gang of sorts rode into town last week — and Windham County’s small-business community greeted them with new ideas.
Investors and advisors on motorcycles participating in the second annual Fresh Tracks Road Pitch traveled to six Vermont communities last week.
In Brattleboro, they met with local entrepreneurs who pitched their business ideas, asked for startup money, and sought their advice.
The five businesses that pitched during the 90-minute event at the River Garden had previously gone through the Strolling of the Heifers business plan competition.
Orly Munzing, the Stroll’s founder and executive director, called the pitch event “a wonderful follow-up.”
“We’re hoping that this will open doors for the presenters and bring them successful growth,” Munzing said.
Strolling of the Heifers and Brattleboro Development Credit Corporation sponsored the event.
Making the pitch
Chris and Trish Thomas, founders of Good Body Products of Guilford, kicked off the pitches by seeking additional funding to expand the business and hire employees.
Hermit Thrush Brewery co-owner Christophe Gagné asked for capital to expand the brewery and hire additional staff. (Gagné’s business partner Avery Schwenk was busy brewing beer at the brewery, on High Street.)
Michael Knapp of Green River, a software development firm in Brattleboro, asked the biker investor’s advice on a new software interface his company was developing to help businesses make better decisions around sustainability.
Nathaniel Brooks, representing VT Dinners L3C, a Guilford company, asked for startup money to launch phase two of the company’s business model.
The company, which specializes in preparing frozen dinners using locally sourced ingredients, proposes using school kitchens in the summer to prepare the meals at the height of the growing season.
Julie Lineberger and Joseph Cincotta of Wilmington took away the $450 Riders’ Choice Award for their new business, Wheel Pad, L3C.
A Wheel Pad is a self-contained living area that can attach to an existing house at either a door or a window. The universally accessible unit is designed for people with recent spinal cord injuries who need a space that gives them privacy and dignity, said Lineberger.
Lineberger said that the company plans to produce its first prototypes this winter. A former board chair of the Vermont Businesses for Social Responsibility, she said Wheel Pad is committed to socially responsible business practices.
Bringing back local
Michael Pieciak, deputy commissioner of the Vermont Department of Financial Regulation’s Securities Division, said that Vermont has a rich tradition of local investing.
Like slow living, local investing is slow money, he said.
Pieciak said one example of local investing was Ben and Jerry’s 1984 public offering that raised approximately $750,000 to help build the ice cream company’s Waterbury plant.
The former Catamount Brewery also started using local investing, he said. Earth’s Best Baby Food, the first national organic baby food company, was another Vermont business to benefit from local investing.
“Businesses aren’t as traditional as they used to be,” he said. “We need to have a variety of tools in our kit.”
Local investing fell out of favor in Vermont by the late 1990s. Pieciak said that to revitalize local investing, the state has revised some of its regulations.
More than a year ago, when Pieciak joined the securities division, he helped simplify the Vermont Small Business Offering Exemption (VSBO) regulation to make investing in Vermont startups easier.
Before 2014, a businesses could raise only $500,000 from a maximum of 50 people. Under the new VSBO, companies can raise $1 million — or $2 million, if the company uses audited accounts — from as many people as will invest, he said.
The less complicated regulations are encouraging businesses to pick up steam. Pieciak said 14 companies used the program in the years prior to the regulation change. Since June 2014, seven businesses have accessed VSBO.
In consideration of towns like Brattleboro that border other states, the new VSBO regulations also allow residents of other states to invest in Vermont businesses.
“We think that’s great,” he said.
Small businesses drive job creation, Pieciak said, and entrepreneurs and small-business owners tend to have higher wages, two of many reasons why the state looks to foster people starting or expanding a business.
Pieciak said he hears from entrepreneurs that they need more capital. Meanwhile, from investors, he hears that small-business owners need to be ready to receive extra capital by doting their Is and crossing their Ts.
He hopes that events like Road Pitch can “narrow the gap” between these two conversations, he said.
Of the 10 communities with organizations that submitted applications to Road Pitch this year, the motorcycling entrepreneurs chose six, said Cairn Cross, pitch founder and co-founder of FreshTracks Capital in Shelburne.
This year’s pitch met the rider-investors’ expectations, said Cross. “It probably exceeded expectations.”
Thanks to the help of Strolling and BDCC, the presenters were well prepared and the event went well, he said.
Cross added a note of caution for entrepreneurs attending the pitch hoping for an angel investor.
A very small percentage of startups receive their capital in one lump sum, he said. Preparing themselves to “get equity ready” is more important. There is often a lot of preparing and resource building before entrepreneurs are ready for money.
This preparation is where Road Pitch can do the most good, Cross added.
Road Pitch puts investors and entrepreneurs in the same room, where the two groups can network and help each other, Cross said.
At the Essex Junction pitch, he said, two men pitched a software idea. A rider recognized that the Agency of Transportation would have an interest and organized a meeting between the entrepreneurs and AOT.
Vermont has its economic challenges, Cross added. Chittenden County and its surrounding areas have a robust economy. “And then there’s everything else,” he said.
Part of the job going forward is to ensure that the rest of the state finds ways to build economic engines and connect its various communities, he said.
Cross hopes that Road Pitch will grow as more entrepreneurs take advantage of the opportunity to pitch to a network of investors.
Imagine 300 people filling the Latchis Theatre during a Road Pitch, he said.
“I’m a real fan of doing this all out in public,” Cross continued. If someone wants to run a business, he or she will need to learn how to ask for help.
Entrepreneurs listening to one another making the pitch can learn so much, he said, “and that raises the whole game.”
Advice for entrepreneurs
Cross has two pieces of advice for entrepreneurs.
The first is to find a co-founder, he said.
“Your odds of success go up if you have a co-founder,” Cross added. “There should be more than one mind at work at these companies.”
The second piece is, when preparing to pitch their business ideas, entrepreneurs should prepare for the question-and-answer time, too.
Doing so helps entrepreneurs prepare for what they aren’t ready for, said Cross. The more succinctly that entrepreneurs can answer questions, the better they inform and engage investors, he advised.
“You can never be too prepared,” he said.