VenVelo Launches New Fund to Support the Local Start-up Community
Co-founded by Crummer faculty, venVelo II hopes to build on the success of the first fund.
By Laura J. Cole ’04 ’08MLS
VenVelo launched in 2012 with two simple goals: to be profitable and help build the startup community in Orlando.
“At the time, we were thinking about how to support startups and early-stage companies in the local community,” said Richard Licursi, managing partner of venVelo, who created the fund along with then-Crummer Entrepreneur-in-Residence Allen Kupetz, current Crummer Entrepreneur-in-Residence Peter McAlindon, and Michael Wolsonovich ’09MBA.
Over the years, the team behind the fund has made 24 investments in 14 companies, including Fattmerchant, which received $25,000 from venVelo for winning Crummer’s annual Venture Plan Competition in 2015. The Orlando-based payment processing company now known as Stax went on to become one of Central Florida’s fastest-growing firms—and is among venVelo’s first and most successful investments.
Nearly a decade later, the startup fund is looking to continue their success with a second fund, venVelo II.
“We’re continuing to harvest the investments we made with venVelo I, and are currently working on getting venVelo II off the ground,” said Licursi. “We haven’t made any investments yet, but we’re hoping to do so in the first quarter of 2022.”
We sat down with Licursi to learn more about venVelo’s connection with Crummer, what makes for a good investment, and the local startup community.
How did venVelo become connected with Crummer?
When we were still in the early phases, the then-director for Crummer’s Center for Advanced Entrepreneurship said, ‘Hey, why don’t you guys try to build something here that can help entrepreneurs coming out of Rollins, but also out of the local community?’
We wanted an anchor in the local community, and Crummer worked so well as that anchor. The whole leadership team was really supportive. They provided us a meeting space, gave us opportunities to work with students who were building companies, and invited us to be part of the Venture Plan Competition. It really did make a difference. Those resources really helped us as we were trying to launch the fund—and continue to help us.
Orlando is becoming a hub for startups and entrepreneurial endeavors. Can you speak to how you’ve seen Orlando grow in this area and what that means overall for the community and how it benefits from it?
Orlando’s got a ways to go in comparison to places like Research Triangle in North Carolina, and Miami, New York City, and Silicon Valley. We’ve got a long way to go, but it has started. For communities to be successful entrepreneurial hubs, it takes successful launches and exits. Orlando has had a few but we need more.
There have been some good startups that have had positive outcomes for their investors, but what Orlando really needs is an investment community willing to take a risk in these early-stage companies. And more importantly, what it needs is a group of experienced people from management teams and successful companies—people with talent that are able to build bigger companies and then contribute as mentors to the local entrepreneurs and startups.
Orlando’s not as prolific in this arena as a Silicon Valley or a Research Triangle because we haven’t had that many really great exits, which would attract investors. A number of them have done really well, but we just need more of them. The only way you get more of them is to get more started and then manage and mentor these startups into a successful position for an exit.
I think Orlando’s got a good shot at it. There are a significant number of successful people that would like to see it grow, and they’re getting more and more involved.
Can you elaborate on what you mean by a successful exit for people who may not be familiar with that terminology?
An exit is basically building an early-stage company and being acquired by a larger company. I’ll give you an example. A group of us started Mesh Networks here in Central Florida around 2000. We had what would be considered a successful exit: We sold the company after five years to Motorola for a couple of hundred million dollars. That exit brings a return to the investor and brings ultimate satisfaction to the founders of the company — and also to all the employees.
What were some of the reasons you decided to invest in Fattmerchant initially?
The management team really understood merchant processing. Some of them had worked in the industry prior to the starting their own company, and they just made a very interesting presentation. The team was passionate yet inexperienced and that made for excellent opportunity for us to help with investment and mentoring. We were aided in the effort by the Florida Opportunity Fund and Deepwork Capital, which have all contributed to growing the local entrepreneurial community.
When the management team made their pitch at the Crummer Venture Plan Competition, they still had a lot of work to do. At the time, they talked about a technology that they hadn’t built yet, but that they were going to build. There were some investors locally that doubted that. A few of us trusted what they were saying, and we decided that it was the right management team to back.
Ultimately, we backed that management team, and a number of other investors came in along the way, including some really big venture capital fund firms that brought a lot of talent to the company and a lot of support to the management team. They gave them a financial runway, so they could build a strong and powerful company.
When you’re looking for who to invest in with venVelo II, is there anything specific you have in mind?
No, there isn’t a specific target we have yet, and we don’t make investments in a particular industry or a particular technology. We have 24 partners today, and they all have different backgrounds. The general belief is that if we look at a company, we’ll have one of our partners on our board who understands the technology, the market, the investment style or product development style, and can help do some research.
Our real target is to help these companies and hopefully we can make some money alongside of it.
What advice do you have for Crummer MBA students wanting to start their own company?
My advice is to make sure you gain strong experience in a particular domain as well as management styles, sales and marketing techniques and opportunities, and know how to manage money first. Those are the kinds of people we’d like to invest in.
I’d also say to understand how investments work. Probably the single biggest issue that has happened in the past—not with any of the companies we’ve worked with—is that after an investor makes an investment in a company, all of a sudden, some entrepreneurs begin to think, ‘Hey, this is my money. And I can do with it as I please.’ Well, you can’t.
Once you take an outside investment from another entity or an individual, it’s no longer your company to do with exactly as you please. You need to build a board of directors and keep investors apprised of the direction of the company. You’re obligated to have a fiduciary responsibility to look after the money that was put into the company and invest in the company in the proper way. Some people just don’t quite get that.
Is there anything that we didn’t talk about that you want readers to know about venVelo II?
We’re always interested in new partners who have early-stage, startup, or technology experience that could help us grow the entrepreneurial community here in Central Florida. In addition to making money, that’s ultimately what we’re trying to do.