\u201cWe have been managing the Florida Institute now as the private fund manager since 2019 and we\u2019ve had a very similar structure and strategy in terms of when and how we\u2019re going to be making investments,\u201d said Florida Funders senior investment associate Zach Brodsky. \u201cWe started to see a bit of a trend of where some of the best investments in the Institute portfolio lied and that was the extremely early deals that we were investing in.\u201d\u00a0<\/p>\n
He added that there are not a lot of funding options for pre-seed founders. It is \u201cprobably one of the most difficult checks to actually raise at the institutional level.\u201d\u00a0<\/p>\n
The goal is to provide Florida-based pre-seed founders with access to capital without requiring them to seek out-of-state resources, Florida Funders managing partner Saxon Baum explained.\u00a0<\/p>\n
\u201cSometimes, that is enough to jump-start a company to keep them here in the state,\u201d he said. \u201cWe know that our job is capital. So, we believe that this is definitely going to move the needle with that.\u201d<\/p>\n
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Prior to launching Stello AI, founder Amee Parekh was a HR director for Uber Eats US and Canada and senior vice president of HR at telehealth company Hims & Hers. Stello AI is Florida First Check\u2019s inaugural investment. Photo: Hims & Hers\/Business Wire<\/p>\n
Brodsky added that \u201cthe strategy has been kind of developing since 2019.\u201d Within the past six months, Baum and Brodsky began to actively create the initiative. They hope to initially work with about 15 companies over the next three years.\u00a0<\/p>\n
The effort was designed to be self-sustaining.\u00a0<\/p>\n
\u201cThe Institute operates on an evergreen model,\u201d Brodsky explained. \u201cWhat that means is basically every time that we do make an investment and then we get returns on that investment, it gets replenished into the fund to then be funded into another company.\u201d\u00a0<\/p>\n
Baum and Brodsky believe that Stello AI was an ideal fit. \u00a0<\/p>\n
\u201cWe always look for founders that really can understand multiple aspects of a business,\u201d Brodsky said. \u201cThis is a company, at this stage, that actually does have great traction. It has pilots that are ready to convert and has been able to show that momentum. That\u2019s exactly what we want to be investing in in these pre-seed opportunities.\u201d\u00a0<\/p>\n
He added that startups and founders will be selected based on a variety of factors including discussions with customers and subject matter experts. Additionally, Florida Funders will review a wide selection of data. This allows the team to determine \u201cwhere this market is headed\u201d and what companies \u201care well equipped to grow.\u201d\u00a0<\/p>\n
\u201cWe want to work with accelerators, universities and incubators around the state,\u201d Baum emphasized. \u201cWe want them to know there is a home for their best companies to get a check instead of having to wrangle up a bunch of angel investors.\u201d\u00a0<\/p>\n
He explained that the strategy will enable Florida Funders to invest in early-stage companies it otherwise might not. This can strengthen the organization\u2019s \u201cproprietary deal flow.\u201d More so, it can help the Florida economy thrive.\u00a0<\/p>\n
\u201cFlorida has no shortage of brilliant founders \u2014 what\u2019s been missing is a reliable first check that keeps them building here instead of relocating for capital,\u201d said Florida Institute executive director Rafael Lohner in a prepared statement.\u201cPartnering with Florida Funders to manage Florida First Check gives our state\u2019s earliest-stage companies an institutional partner from day one. And when a company builds here, the high-wage jobs and economic impact it creates stay here \u2014 that\u2019s the Institute\u2019s mission at work.\u201d<\/p>\n