Young companies that start in the Tampa Bay area are much more likely to get the financial backing they need to stay in the area and create jobs and wealth, in large part due to initiatives by David Chitester.
Chitester, who founded Florida Funders and Seedfunders, is a local pioneer in angel investing, leading funding for companies that are too new and too small to attract the interest of venture capitalists.
For those efforts he will receive the Angel Investor TiETAN award from TiE Tampa Bay.
Chitester is one of five individuals and companies that will be recognized for their contributions to the entrepreneurial ecosystem at TiEcon Florida, the marquee event for TiE Tampa Bay. Registration for the Feb. 16 event, which also includes keynote speakers and panel discussions, is underway here.
Chitester has been an entrepreneur himself, selling his first company, Chitester Management Solutions, to Hill International (NYSE: HIL) in Philadelphia in 2008, followed by the sale of e-learning company RedVector (now Vector Solutions) to a private equity group.
After the JOBS Act of 2012 paved the way for crowdfunding, Chitester and Irv Cohen, former president of JP Morgan’s Treasury Technology Corp., founded Florida Funders in 2013. Former RedVector CEO Tom Wallace and serial entrepreneur Marc Blumenthal joined later and now lead Florida Funders, a hybrid of a venture capital fund and crowd-funding platform.
“When I started Florida Funders it was basically who you knew … and it was hard to get funding unless you knew someone,” Chitester said. “We were talking to companies that said, ‘We can’t get enough funding here’ and they moved, often to California or Texas. Now, five years later, companies are staying here.”
That wouldn’t happen without angel funding, Chitester said.
“These are companies early-stage venture capitalists are not interested in,” he said. “We help companies that have started here to stay here and grow here and hire people. Eventually companies like Tribridge [a software and cloud-computing company] and mxMatrixxx [a tech-enabled pharmacy benefits manager] will sell for $100 million or more and the founders become angel investors themselves.”
Chitester started Seedfunders in 2017. In the last nine months the organization has grown to 17 partners and invested about $1 million in six startups.
“I’d like to fund 10 companies this year,” he said. “We did six in nine months, so I think it’s attainable.”
A personal goal for 2019 is to get back into running. He won medals in 2017 for the Shark in the Park 5K in Indian Harbour Beach, Florida and the Great West Chase in Tampa, but has been so busy with Seedfunders that he couldn’t participate in 2018.