Metro Startup Launcher

Did you know that Kentucky is home to a fantastic new drink called Baqua?  They're poised to grow rapidly along with the world's passion for all things natural and healthy.

Baqua’s founder and CEO, Sandra Marlowe, was inspired by the wonder of international cultures after a family trip to England. She fell in love with Lemon Barley Water and was intrigued by this tasty “lemonade” with a hint of grains. Sandra returned home to research and discovered the rich history of ancient grain drinks. First cultivated by the Ancient Greeks, ancient grain drinks were consumed during sacred ceremonies and believed to be a source of strength and power.

Backed by studies forecasting a rapid rise in plant-based consumption patterns, Sandra and her five children developed Baqua. Sons, Daniel and Caton, formed the R&D team to test many ancient grains, settle on their favorites, and craft the delicious recipes. With a vision to disrupt the growing plant based market, the Marlowe family developed a tasty and healthy drink. Baqua delivers more balanced electrolytes than leading sports drinks and sources the body with antioxidants and prebiotics, yet includes no added sugar and artificial ingredients.

Millennials are driving a “better for you” revolution, seeking innovation and function in their food and drink choices with healthy benefits for the body. Consumers of all ages are moving away from both sugar sweetened and artificially sweetened drinks. Baqua is on trend with today’s consumers – lower sugar and clean label ingredients.

With three Registered Trademarks and a robust pipeline of products on the roadmap, Baqua is well positioned to attract a new era of wellness focused consumers. Baqua’s mission is to make healthy living tasty, refreshing, and revitalizing. With a vision of building Baqua into a globally recognized brand, Sandra has assembled a forward-thinking team to accomplish this goal.

Baqua, a Kentucky Proud Product, is sold on Amazon Prime, and is distributed throughout Kentucky by Town and Country Foods.

Listen to the latest edition of the Metro Startup Launcher Podcast to learn more about how they got started and how they plan to grow and succeed!

From the very first Metro Startup Launcher investor meeting, Lisa Britton has been an active participant.  She understands that more startups in our community will produce more jobs and more wealth.  She also wants to help by being an active "micro-angel investor" and believes that many others in our metro area want to help too.

Lisa had some questions about micro-investing, and we decided that her questions would be good for everyone to hear.  So, we recorded the Q&A.  Listen to this episode of the Metro Startup Launcher podcast as we answer these questions and more:

Is the Metro Startup Launcher website for entrepreneurs or investors?

Do Metro Startup Launcher's micro-investors have to be accredited investors?

Why will Metro Startup Launcher help more startups get started?

Does Metro Startup Launcher actually collect investment dollars?

Who actually collects the money for investments?

Are Metro Startup Launcher startups restricted to the Louisville area?

Are Metro Startup Launcher investors restricted to the Louisville area?

How will this keep the best companies from moving away from Louisville?

Will Metro Startup Launcher provide advice for investors?

What is a SAFE investment agreement?

How do you sign up for WeFunder?

What kind of companies are we going to fund?

How will this help the Louisville area?

Have you ever wondered how Gill Holland got started?  He built a company that The Hollywood Reporter named as one of the top ten movie production companies in New York City.  He runs his own record label and music production companies with world famous artists.  He currently runs another movie production company with multiple award winning films.  And, if that's not enough, he and his wife spearheaded the revitalization of one of Louisville's coolest neighborhoods (NuLu).  Now they're doing it again in the Portland area of Louisville with the Portland Investment Initiative.

Often, you hear people joke that to make a small fortune in the movie business, you have to start with a large fortune.  Is that what happened?

The real story is much more inspiring and a great example to our local entrepreneurs!

How to get started with no money?  How to build companies with grit, tenacity, and sweat equity?  How to make things happen because you believe in yourself and your goals?

I really enjoyed learning how Gill got started, and you will too!

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By now, hopefully you know that the goal of Metro Startup Launcher is to make it much easier for startup companies in the Louisville metro area to raise capital through equity crowdfunding. We also want to help lots of people in the Louisville area actually make money by investing small mounts in lots of startups: a strategy that statistically has proven to provide an average of 27% return on investment for angel investors in the United States.

Now that we have the monthly meetings rolling for both entrepreneurs and investors, I guess it should come as no surprise to anyone that startup entrepreneurs are starting to ask: OK, so how do I actually do equity crowdfunding for my company.

A lot of people around here still think that you start a business in your garage, you get in pitch contests, go to a bunch of networking meetings, and meet some rich guys who invest in your company.  Next thing you know, you’ve got venture capital money, a super cool startup company office, and all your wildest dreams come true!

The problem is, around here, we have plenty of pitch contests, but not enough rich people to invest in startups. However, we do have 1.3 million people in the Louisville metro area, and equity crowdfunding is now legal.

We've all heard about crowdfunding, but how does it work? Let's talk about some of the specifics.

On October 30, 2015, the Securities and Exchange Commission voted to adopt “Regulation Crowdfunding” (Regulation CF). The rules went into effect May 16, 2016. Regulation CF allows a company to sell up to $1 million in company stock in any 12-month period.

Here are a couple of the amazing features about the Regulation CF exemption:

It allows anyone to invest in a company. The investors do not have to be "Accredited Investors" (a.k.a millionaires).

You can raise capital from an unlimited number of investors, and the number of investors do not count toward the current maximum number of investors allowed by a private company (2000 total, 500 non-accredited).

However, investments are limited in the following ways:

If either the annual income or the net worth of the investor is less than $100,000, the investor is limited to invest the greater of $2,000 or 5% of the lesser of his or her annual income or net worth.

If the annual income and net worth of the investor are both greater than $100,000, the investor is limited to 10% of the lesser of his or her annual income or net worth, to a maximum of $100,000.

The transaction must be made through a broker, or through a “funding portal.” This is actually a good thing because the portals have made it pretty easy to run your fundraise.

The business must be incorporated in the U.S.

The business may not be an “investment” company (set up for the purpose of investing in another company).

The SEC requires that issuers provide certain information to investors through the intermediaries’ platforms and to the SEC directly via a filing of Form C on EDGAR, the SEC’s data handling system.

If a current offering plus previous raises amounts to $100,000 or less, the financial statements must be certified by the principal executive officer and accompanied by information from the company’s tax returns (but not the tax returns themselves).

If current offer plus previous raises amounts to $100,000-500,000, the financial statements must be reviewed by a CPA.

If the current offer plus previous raises amounts to $500,000 or more, the financial statements must be audited by a CPA. However,

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We've been meeting with lots of startup entrepreneurs. One recently sold his concept and had some opinions (GOOD AND BAD) about our startup community. We have attached his entire letter with our comments (in bold italics):

His Letter:

The State of Venture Capital in Louisville from a Startup’s Point of View

Before offering my viewpoints and experiences on the state of venture capital in Louisville, one has to first recognize two other important elements of the money hunt. First is the established and formal educational and support opportunities, and secondly, the network of professionals that enhance their effectiveness. This is where Louisville shines.

Few other cities approaching Louisville’s size have programs and commitments like those of GLI’s Enterprise Corp., the University of Louisville’s Nucleus program and Business School Entrepreneurial offerings.

(I agree.  We have great resources.)

Under the leadership of Lisa Bajorinas, GLI’s Enterprise Corp. creates and connects startups with resources that are valuable and effective. Some complain about the “revolving door of talent” at Enterprise Corp, but I see it differently, very smart and driven people are recruited, create opportunities for the community, and as a result are naturally sought by other organizations. Witness the recent departure of Terry Gill and Amelia Gandara, just two examples of high value talent, going forward to new challenges after demonstrating stellar performances locally. More than just creating programs of awards and recognition, Enterprise Corp connects, supports, and locally advocates for the startup community.

(Again, I agree.  There are great people and programs in Louisville that help our startup community.)

The University of Louisville has an internationally recognized program of support for health related startups, both internally licensing research as well as having impressive physical support facilities such as the Nucleus complex. Also, the University of Louisville’s Nucleus umbrella includes the Launch It program, (of which I am a graduate) that helps startups focus and accelerate the very hard but necessary work of creating a minimum viable product and customer discovery.

The Business School at the University of Louisville, especially the MBA Entrepreneurial program, repeatedly wins awards and real money, from the efforts of the students, and many go off to start their own businesses, or help larger organizations create opportunities internally. Other treasures for the startup community include Start Up Weekend, GE First Build, and Maker Spaces.

In addition, Louisville has a business savvy Mayor that supports the business community and startups in particular. An integral part of this network is the dedicated experts, coaches, and investors who give tirelessly and enthusiastically advice and support. People like Greg Langdon, Bob Saunders, and others support and connect start ups while never expecting anything in return, other than the satisfaction that they are nurturing and growing a vital start up community. Businesses like Mightily, and Execuity, help in marketing and strategy, and firms like Frost, Brown, & Todd give expert advice in the spirit of paying it forward.

(Agreed.)

Now for the ugly side.

Formal groups of investors, such as the Venture Connectors, are very risk adverse. In my opinion, despite the best efforts of the board of directors, Venture Connectors should be renamed the “Chickenshit Club. “ I know what you may be thinking, sour grapes from another founder that was not able to get funding locally, besides,

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We've been meeting with lots of startups and investors to learn more about how we can get more startups started in Louisville, and here's one of the problems we've consistently heard.

The best startup companies can't find investors in Louisville, so they look outside of Louisville.

Then, often, when they find investors outside of Louisville, the investors move them to a different city. When the company is successful and cashes out, all the profit and entrepreneurial talent leaves the Louisville area, which destroys our entrepreneurial ecosystem.

Why is this happening?

For one thing, our city doesn't have a huge pool of angel investors or early stage venture investors. We're not like Silicon Valley with lots of cashed out billionaires willing to write million dollar checks on an idea.

But, in our area, the best startups are advised to look for investors with a $50,000 minimum investment. What happens? They don't find those investors, so they look outside of Louisville, find investors, and end up moving away.

So how do we fix these problems? We make it easy for more people to invest in startups.

One way we'll do this on the Metro Startup Launcher website is by using WeFunds. WeFunder.com will set up a small corporation (a WeFund), which can accept up to 99 investors with minimum investments as low as $100. That corporation then invests in a startup company, and the WeFund shows up as one investor on the startup company's books.

This will allow local startups to raise capital from multiple local investors and stay in Louisville. So how do we find these investors?

1. First, we build a large pool potential investors on Metro Startup Launcher. Here's how we do it:

a. Provide fantastic educational content to get investors excited about safely investing in startups with the highest potential for excellent returns.

b. Run ads on Facebook, LinkedIn and other media to drive traffic to Metro Startup Launcher content.

c. How do we pay for ads? We accept donations from local businesses and individuals to fund more and more ads to bring in more and more investors.

2. Provide a password protected section on the Metro Startup website for active, growing startups to connect with accredited investors and teach the entrepreneurs to set up WeFunds.

The Louisville metro area has 1.3 million people. As more of these people invest in startups, more startups get started and more stay in Louisville. As these companies become successful, the profits get returned to investors in the Louisville area, our local wealth grows, and more and money goes into metro area startups.

This is one of the ways we get more startups started, increase jobs, and increase wealth for our entire metro area.

Help us get the word out by donating or just passing on this video to anyone you can!

Thank you!