The St. Petersburg Chamber of Commerce presents: Coronavirus Impact Insights.
On this episode of Chamber Coronavirus Impact Insights, Dave Chitester, co-founder of Seedfunders joins Chris Steinocher, CEO of the St. Petersburg Chamber and Joe Hamilton, publisher of the St. Pete Catalyst to talk about how Seedfunders is adapting to the Covid-19 pandemic and how they’re continuing to invest in pre-revenue startups.
Chitester, who founded Seedfunders in St. Petersburg alongside fellow investor Irv Cohen, recently expanded the Seedfunders network to a new chapter in Orlando. Unlike large venture capital firms, Seedfunders invests in early stage, pre-revenue companies with scalable technology. These companies may have had a friends and family round of investment or an angel investor, but are generally looking for their first professional funding.
According to Chitester, Seedfunders is unique in Florida, the only organization in the state that provides this kind of funding.
Because these investments are generally relatively small, between $100,000-$200,000, Seedfunders has continued operating despite the economic conditions created by the pandemic, and has continued making deals with “follow-on” investments, following initial funding they’ve already provided for companies within their portfolio.
For example, Chitester explains, Seedfunders is continuing to invest in portfolio companies whose services have come into increasing demand due to the coronavirus pandemic. One of their portfolio companies, Intelligent Observation, a hand hygiene compliance service that automatically monitors hand-washing in hospitals, is currently raising and has secured a seven-figure investment from a venture capital firm, as well as smaller investments from groups like Seedfunders.
While some other companies may not be quite as successful raising funds during the pandemic as they might otherwise be, Chitester says that the average investment of $150,000 can be raised relatively quickly within Seedfunders, even if half of the investors choose to sit out.
In a time when large venture capitalists are holding off and waiting to see where the economy is going, Seedfunders is charging ahead to ensure that the companies already in its portfolio will pull through the pandemic. The partners recently reached out to their portfolio companies via email, Chitester explains, to ensure they have the funds to continue operating. One of the portfolio companies needed $100,000 to keep running, which Seedfunders gathered relatively quickly. Another, which operates in senior living facilities, is shut down due to its inability to access those facilities.
Chitester expects that out of this time of major upheaval, innovation will will continue to grow and companies will be coming out with solutions, like one in which the Seedfunders Orlando chapter recently invested. The company, ViewStub, has a platform to livestream event like seminars or concerts, while charging attendees to watch virtually.
St. Pete Catalyst Publisher Joe Hamilton is a partner in Seedfunders in St. Petersburg.