Florida Funders is a hybrid between a venture capital fund and an angel network. We’re the most active investor in the State of Florida, and we have some interesting thoughts on why putting your money behind Florida Tech companies could be one of the best investments you make this decade.
Why Florida? The Unicorns are coming…
Over the past year, we’ve seen 1000 people moving to Florida every day, many from places like Silicon Valley and New York City. Many unicorn startups, those with an excess of $1B valuations, are seeing workers migrate here, and with that, we’re expecting to see more huge tech companies born in the Sunshine State over the next decade.
Meanwhile, we’ve already seen massive companies born and exited in the state. Reliaquest, an advanced cybersecurity managed service and intelligence platform for global enterprises, just raised $300M in August 2020. Chewy, the e-commerce pet supply store that sold to Petsmart for $3.5B, the largest e-commerce acquisition ever. In 2019, ConnectWise, the business management & IT software automation company, sold to the private equity firm Thoma Bravo for an estimated $1.5B.
These massive exits are the beginning of, excuse the pun, a hurricane of high growth startups generating returns for those investing in Florida tech.
And while Covid has been advantageous to us from a talent perspective, the trend towards Florida becoming one of the states poised to become the next breakout tech ecosystem has been on the rise for years. We have a large University system pumping out 10,000+ STEM graduates a year, local resources are pouring into the ecosystem, and tax advantages are creating a favorable business climate across industries. While you might want to move here for tax purposes, you should invest here for great, long-term returns.
From an investor perspective, we see far less competition to get into deals than we would if we were in California or New York. Through our network of personal connections, partnerships with universities, incubators, accelerators, and service providers, and our co-investors, we see thousands of potential deals. As the most active investor in the state, if a company is looking to fundraise here, we usually have the opportunity to invest, meaning our partners are getting access to the best startups.
You think a long-term buy and hold strategy works…
But over the past 20 years, venture capital and angel investing have outperformed every other alternative asset class. Technology companies are waiting longer to go public than ever before in history, and the only investors seeing 10x – 100x returns are those that get in early in the private markets.
But early-stage investing is hard.
We have one LP, the former CEO of a multi-billion dollar technology company that he built with the help of venture capital, that initially pushed back when we pitched him on Fund 1.
“I’ve invested in a few early-stage tech startups. Do you know what those investments are worth today? $0. Why would I invest with you?” he asked.
The answer is simple – investing on your own as an angel is really hard. The more we explored the way that he’d invested, the more we found out that he didn’t follow some of our cardinal rules of angel investing.
He didn’t do anywhere near the due diligence we do as a firm. He invested in most of the deals that people pitched him because they were his friends, rather than looking at hundreds of opportunities before investing in one. And really, who can blame him. At the time he was leading an organization with hundreds of employees, not focusing on becoming a professional angel investor.
Now, instead of trying to find deals on his own, he can invest with our funds, and forget about his investment while we work to find and invest his money in the best startups in the world. Or, he can look at the startups we are investing in and invest alongside us. Better still, he can do both, investing in our funds so that he has a piece of every deal in which we participate, and then elect to invest directly in some of the deals around technology that is of particular interest to him.
How and what we invest in…
As tech entrepreneurs, thinking about the future is ingrained in our DNA. We see five major technical trends, akin in scope to the advent of the internet, Web 1.0, mobile, and Web 2.0 emerging that mean investing today in early-stage technology companies is as exciting as it has ever been before.
In the investor world, we often hear wild stories about early-stage investors in the likes of Microsoft, Amazon, Uber, Facebook, etc. making hundreds of millions of dollars off comparatively small seed-stage investments. It’s easy to think that these types of deals don’t exist anymore, but the reality is that with the emergence of artificial intelligence, blockchain, the internet of things, virtual and augmented reality, and quantum computing, we are going to see Uber-like returns on countless companies over the next decade.
While we invest in all technologies and tech-enabled products, we do focus around six core sectors where we see the biggest room for disruption, especially when utilizing the aforementioned technologies:
- Ed Tech: Many of our partners have ed tech backgrounds, and the state of FL, due to the size of the public school and university systems, provides a target-rich environment for ed-tech companies.
- Enterprise SAAS: FL has always been a very business-friendly state but within the last several years we are seeing an influx of large corporations and large technology companies set up a primary or secondary location in the state of FL. With the growing corporate landscape, the number of enterprise SAAS software startups has been growing rapidly. Now we are beginning to see larger companies test and implement products of startup technology companies. We are also seeing a push by larger corporate companies to invest in venture capital and acquire companies that are synergistic to their business. This aligns with our team and network’s deep understanding and background in SAAS software, which is why it is our favorite business model to invest in.
- Digital Health: Due to the older population in the state of FL many digital health companies get their start in the state of FL. We have also seen that the large size and scale of hospital systems provide exceptional beta customers for digital health companies.
- Cyber Security: Tampa has become a cybersecurity hub due to the rise of several companies such as KnowBe4 and Reliaquest achieving unicorn status. The technology talent around cybersecurity in Tampa is poised to exponentially grow as dedicated cybersecurity-focused higher ed programs in Florida have recently been launched.
- FinTech: Many of the top-tier financial institutions have expanded their operations in Florida as well as companies such as Raymond James that are based here in FL. We have several key investments in FinTech including Finexio, an Orlando-based FinTech company that was named as Raymond James top FinTech companies to watch in 2020.
- Gig Economy: We see revolutionary changes in legacy businesses that are becoming more efficient and effective by implementing technology. We see the most success here with companies focused on the gig economy. Trash Butler and Homee are a few of the gig economy companies based in FL that we have invested in, as well as out of state companies 2ULaundry, PICKUP Now, Bambino, Othrsource, Vugo, and MyPorter that have relocated or used Florida Funders investment capital to expand into Florida creating an economic and technological impact on Florida.
- Ecommerce: Even before COVID, we were beginning to focus on new-age retail. What does the future of retail look like? We believe there are many opportunities within Florida for companies to redefine the future of retail and ecommerce. Investments include Clientbook, Stylust, and FlexEngage.
How do I become an Angel Investor?
With Florida Funders, becoming an Angel investor has never been easier. Sign up for our platform below, start reviewing deals, and when you see one that resonates with you, start your funding journey.