Business accelerator and incubator officials reject about 98% of founders who apply to programs, due to stringent criteria and a highly competitive process; Fatin Kwasny calls those “orphaned startups.”
Kwasny recently launched Fractio, a software-as-a-service platform, to expand the tech ecosystem and foster growth. The Tampa-based startup allows accelerator and incubator mentors to extend their guidance through paid engagements with monthly subscribers.
Entrepreneurs can also utilize Fractio’s on-demand experts for help with business operations, product development, human resources and marketing. Kwasny said the platform fills the gap between freelance marketplaces like Fiverr and mentorship provided by various tech hubs.
“They (founders) can activate a team that’s better than hiring their buddies or going to a marketplace,” Kwasny said. “Because that is transactional, or you’re going to hurt feelings. I’ve experienced it.”
She incorporated Fractio last summer and began building her team earlier this year. Kwasny said her vision has resonated, and her 17 fractional advisors include a unicorn co-founder and a people management advisor who has worked with the World Health Organization and the United Nations.
While Fractio can replace accelerators and incubators, Kwasny wants to partner with those organizations rather than compete. She explained conflicts of interest prevent mentors from assisting with a cohort’s project work unless that is a program feature.
Founders needing additional help could utilize Fractio’s experts while participating in the cohort. Kwasny said the platform “serves as a proxy and makes them more competitive.”
“It’s built as a SaaS, so it handles all the back office for both parties,” she added. “The startup and the fractional (advisor) plugged into it.”
Kwasny noted that the primary benefit of using fractional experts is reduced costs. She said the monthly subscription service equates to filling an interim position without salary or equity requirements.
She elaborated that Fractio allows founders to focus on improving specific operations as needed while avoiding new hires and subsequent layoffs. The platform is for early-stage startups experiencing growing pains, and Kwasny said more established companies should “graduate” from fractional help to fulfilling permanent positions.
“But until they get to that point, this is filling that gap for them,” she said.
Kwasny believes Fractio is also a resource for venture capitalists “burning through their cash too quickly.” A recent Wall Street Journal article highlighted how a market downtown is increasingly leading to startup shutdowns and fire sales.
Kwasny noted that trend is picking up steam and said investment firms cannot continue paying interim C-level executives “just to show whether the product can be profitable or not.” She said Fractio allows investors to save money while enabling founders to retain company equity.
“I kind of liken it to being closest to a lean cash basis,” Kwasny said. “Whether they’re bootstrapping or have private equity involved. The ultimate benefit is they are reducing risks by turning those fixed costs into variable ones because they’re tapping into an as-needed, on-demand network of advisors across all those functions.”
As a St. Petersburg native and board member of Tampa Bay Tech’s Emerging Leader’s Council, Kwasny is passionate about the local startup ecosystem. She left Tampa Bay for Washington, D.C., in 2010 before spending several years in Austin.
Kwasny relayed her amazement at how the local tech industry blossomed in her absence. However, she also witnessed Austin rapidly evolve – “but not for the better.”
That culture change propelled her desire to help foster new growth and leaders. Kwasny called it her way of protecting the area from becoming another Austin or Silicon Valley.
“So that it is growing in a way that’s healthy,” she added. “While breeding a flourishing tech community that we can be proud of.”
Kwasny noted that just 15% of founders are female, and women-led startups only receive 2.5% of total private equity investments. She plans to help improve those statistics.
She recalled working for male founders who promised that her sweat equity would equate to a partnership. Like many other women, she watched male founders disregard her early-stage efforts and pick “their buddies” for partnerships once the startup scaled.
“That was kind of the turning point and the catalyst for me to start Fractio,” she said. “Unless they’re (founders) at the point where they can bring on a chief people officer or an HR person … the team is kind of left to themselves and their own dynamics.
“And that can destroy a startup just as much as not having enough money.”