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    NewsJanuary 15, 2024

    Fireroad Ventures 2023 Year in Review

    Prequel

    Fireroad Ventures officially (and initially) launched as Ocean Capital IV, a fund and management strategy built to invest in companies that participate in the Ocean Accelerator program and others like them. As COO of Ocean, Christy led the launch, having managed the accelerator portfolio, recruiting, and selection process; by March, $400,000 was committed to the fund, applications for the 2023 Accelerator program opened, and we were off to the races drafting formation paperwork, recruiting our first batch of investments, and fundraising.

    Christy spent much of February and March on the road hosting events with Ocean called Unpolished. The event series spread from Austin to Cleveland, New York City to San Diego, Orlando to Silicon Valley. She met founders, potential LPs, and new partners. (One of our portfolio companies, Wiggl Health, met us at an Unpolished event 🙌🏽.)

    At the same time, both Tim and Ry were beginning to design their next startup chapter. As serial founders and long-time business partners, both Tim and Ry wanted to activate more early-stage capital in the region as part of their mission to make Southwest Ohio an attractive place to build a venture. They were both deeply motivated by their founder journey and started talking with investors about a "Midwest Founders Fund," to tap into the potential of midwestern grit with the vision and passion of founders.

    Tim spent the beginning of 2023 winding down his operational leadership with Coterie, preparing to launch Fireroad. Ry had gathered a small group of engineers and developers to launch a venture studio that he was calling Cincinnati Ventures with a handful of projects in-flight while Tembo was also taking shape.

    They began designing a strategy for their work together, which they coined a "barbell approach:" activating capital in the high risk, high reward venture class alongside financing steady, cashflowing service businesses in a holdings company model. The strategy was an iteration of the work they did founding Differential, a software lab and studio. Astronomer, Cincinnati's first unicorn, was a Differential spinout that Ry led and scaled. They knew the model worked.

    As a board member of Ocean, Tim saw overlapping efforts between the work of Ocean Capital and the investing activity he and Ry were starting, and wondered: would this be better for everyone if we joined forces? And so Tim and Ry came on board as General Partners with Ocean Capital IV, eager to fill a critical gap in the regional investing landscape and be actively involved in the longest-standing accelerator program in Cincinnati.

    When we joined forces, we grew the target fund size from $5M to $16M ($20M cap) and increased our target investment size. The portfolio strategy stayed the same, while our pipeline strategy expanded. Now, in addition to proprietary access to companies in the Ocean Accelerator, the fund also had access to the founder-references that came to Tim and Ry personally, and first rights of refusal on projects to come from the Fireroad Venture Studio (Foundry).

    "The more we worked together across three different ideas; a venture fund, business incubation, and a small business acquisition machine, the more obvious the synergies and potential benefits of collaboration became. The companies we acquire will generate ideas and solutions (think vertical SaaS) to build, internally. The companies we incubate are a great source of deal flow for our venture fund, and may also benefit from our partnership with Ocean Accelerator. The talented employees and founders we'll be working with across the portfolio can add massive value to some of our other businesses. The founders coming through the accelerator (if they don't get to the next stage) can be re-deployed as founders of internal concepts or employees across the portfolio. The positive cash flows being generated by our acquisitions will offset the studio and fund some moonshots. Our focus on founder care and world class culture building can benefit everyone especially as we share best practices. The returns we get from the venture fund can help fuel the next businesses we buy and build."

    —Tim's blog post about the power of combining efforts across the three practices

    First Checks & Pitches

    Our first opportunity to invest through private, proprietary deal flow came early and fast. In the beginning of April, our GP commitment was wired to the fund and on April 4, we wrote our first check into Tembo (called CoreDB at the time), a developer platform for data services that enables developers to collapse and simplify their complex projects and teams. The seed round was led by Venrock, and officially kicked off our 18 month fundraising window and initial investing period. Tembo is led by Ry Walker, one of Fireroad's partners. The team is based in Cincinnati (in fact, Fireroad will move into an office with Tembo in January 2024) and has grown to 15 FTEs.

    Throughout April, we were working with Ocean on interviewing, checking references, and extending invitations to the 2023 Accelerator cohort. Out of 135 applications, 6 companies were accepted into the program and became our next six investments.

    • Anonymous Agent - connecting small businesses with micro influencers so everyone can monetize their data
    • Integrate School - bringing ease and transparency to K-12 lesson planning with one-click tools that match state standards
    • Magic Kids - adventurous AR-powered educational gaming for 4-8 year olds
    • oneKIN - powering main street businesses with ecommerce tools
    • Tinychain - unifying cloud services and hosting with a blockchain data structure
    • Wiggl - bringing data to workplace safety and compliance for today's hybrid workforce

    We were featured on a global broadcast pitch event with FDI in late April. While our brand and structure have changed, this recorded pitch from late April shows our founding DNA and passion for founders, their wellbeing and influence.

    First Batch

    Alongside the Ocean Accelerator team, we welcomed Cohort 9 to Cincinnati in mid-May. The group had a full week of sessions that covered everything from hard-earned founder wisdom - with founders like Kirsten Moorefield and Daren Murriner from Cloverleaf, Mike and Maddie Bell from Scheduler, and Anastasia Tarpeh-Ellis from Bosa - to product engineering with Dan Rye from Tensure, and IP strategy with Vance Van Drake at Frost Brown Todd. One of the benefits of partnering with the accelerator program is that our portfolio not only has access to experts and quality service partners over the course of the 18 weeks, the program helps mitigate the isolation many founders battle in their startup journey.

    Reorganizing

    With our first close on the fund and our first batch of investments underway, our attention turned to full-time fundraising.

    Pitching Ocean Capital under the same banner as philanthropic fundraising efforts of the non-profit proved confusing to all stakeholders; when Tim & Ry - partners in Fireroad - pitched the fund as Ocean Capital it was equally confusing to those stakeholders. As we worked on positioning the fund alongside the work of both Ocean (a non-profit organization) and Fireroad, it quickly became clear that the brand and infrastructure of Fireroad would be better positioned to support the venture fund for the long haul.

    So, we worked on reorganizing our entities that supported the fund — the GP & Management Company — while staying the course on the fund thesis, pipeline and portfolio strategy. We filed an amendment to the Fund's LLC incorporation, and Ocean Capital IV LLC became Fireroad Ventures I LLC.

    Subscribed LPs had the opportunity to rescind their participation in the fund at this point in the journey, but every single LP stayed with us. 🧡

    In July, both Tim and Christy went to Colorado with the accelerator cohort for their mid-cohort retreat. After a day-long reflection retreat with Soul Care to start the week, the cohort had in-depth workshops on product development and fundraising, speed-pitching with angels and other VCs, and a "premature pitch event," to start preparing for Demo Day. One of the great things about the accelerator program is that it connects our portfolio companies with mentors like Silvia Mah, Mike Quesnell, and Vidya Dinamani, who were all part of the week.

    Relaunching

    With a fresh deck, we re-entered fundraising mode and started getting the word out to investors, other VCs, and founders. We had some nice press coverage in August (thanks, Liz!).

    We added two additional companies to the portfolio:

    • Immersed is an alumni company of the Ocean Accelerator (2017), bringing spatial computing to workplaces
    • Anadro is building a distributed bitcoin mining network while also saving property owners and their tenants money on energy costs

    Our operating capacity matured as we joined forces with Wendal.io to be our first layer of diligence. By creating a custom set of parameters and leveraging the psychographic inventory that is built into the platform, we're able to screen thousands of opportunities effectively, and also mitigate the historic bias in venture capital to ensure we're considering ventures led by founders who might not have access to the insider-networks.

    Wendal will also create the opportunity for our portfolio companies to connect with other firms on the platform who are a good match. Here's a TechCrunch article featuring Wendal for more of the story behind the platform.

    Founders can get started with their application for Fireroad funding here.

    Demo Day

    We celebrated Demo Day with the Accelerator cohort in early September. Several companies brought on new angel investors at the happy hour after the event. Christy shared about Fireroad, the critical gap we are seeking to fill in our region, and our definition of "mission-driven" as part of the event (around the 1:00 mark).

    The Ocean Accelerator is the longest-standing accelerator in Cincinnati, launched in 2014 by Tim, Tim Brunk, and Chad Reynolds. With 70 companies having been through the program (including the 2023 cohort), they have raised more than $150M in funding, created hundreds of jobs, and have grown in value as a portfolio more than five times their value at time of participation. The 18 week program helps early-stage founders build venture-backable companies, leveraging seed funding, mentors, education, and professional services to help grow startups while also inviting founders to integrate their faith, purpose, relationships, and health into their startup journey.

    Through our partnership with Ocean, Fireroad Ventures makes $50,000 investments into companies that are part of the program, winning early, investor-friendly terms and derisking those early investments through the program. Approximately 30% of the Fireroad Ventures Fund I portfolio will be from the Ocean Accelerator cohorts in our initial investing period.

    The 2024 Demo Day event will be at the end of September; we plan to invite founders and investors in the Fireroad community to join for the week where we'll host complimentary gatherings alongside the pitch event. Mark your calendars for the week of September 23 and plan to be with us in Cincinnati!

    A Growing Firm

    Fireroad started October with our first offsite team days. We officially welcomed two new partners who lead the Fireroad Holdings practice - Jared Warner and Brad Felix. They both focus on strategy, deals, and operations on the holdings business of the Fireroad, and also bring serious value and experience to our work in Ventures.

    Our whole team gathered in early October for a day and half of vision, relationship building, and Q4 planning. We were hosted by Will Housh, a Fireroad Inc board member. The photo on the left is the whole Fireroad team: in the foreground, Will, then clockwise around the group is Ry, Tim, Brad, Christy, and Jared in the middle with the Bengals shirt.

    Our Ventures team also grew as Jonathan Randall came on board to assist with deal sourcing, research and analysis in our diligence process, and overall firm operations. Jonathan has worked with clients in financial services, is involved with angel groups in the southwest, and also had been part of the Ocean operations team. He has been leading the charge on our adoption of multiple AI-tools to enrich and multiply our time in processes and operations.

    On the Road

    We spent a lot of time on the road, dividing and conquering across various startup ecosystems.

    In early November, investors in Fireroad Inc gathered in Northern Kentucky where we presented an updated from Fireroad Ventures, along with updates from the Fireroad Holdings business. You can take a peek at the presentation we shared at that event.

    Looking Forward

    Fundraising

    Our focus for the month of December and heading into the New Year has been almost exclusively on fundraising. It is no secret that now is a difficult time to raise a venture capital fund, especially for emerging managers. Fund I is a Reg D 506(c) offering and so we are focused on leveraging our ability to publicly fundraise. Look for monthly gatherings for individuals considering investing (please feel free to come along and bring a friend) and more activity on social media about the fund.

    In the day-to-day grind of fundraising, it's important to take a step back and be sure we have a compelling answer to the question we often ask founders: why this, now?

    • 🚀 A venture capital practice offers a launchpad for moon shoots within the Fireroad platform.
    • 🧗🏼 Early stage venture is a perpetually critical gap in the regional investing landscape, and our team has all experienced it.
    • 💙 Our credible histories and humane posture set us apart as partners for founders.
    • 💫 By building an active and savvy LP community now, we are laying the foundations for an enduring venture capital practice here in the Midwest.
    • ⛳ Resets in the market, particularly in venture, are creating investor-friendly opportunities with no decline in dealflow.
    • 🏋🏼 Blackrock suggests allocation to private/alternative markets should grow from 5% to 20% of a portfolio in coming years.

    "We are in a sustained age of innovation led by transformational technological advances that will impact every industry – fueled by the brightest minds on the planet. We can expect this to endure for many years to come, through up and down cycles."

    —Ed Knight, Antler in the Venture Capital Journal

    Founder Flourishing Framework

    From the beginning, the work of Fireroad has centered on the positive impact jobs have on people's lives and the unique opportunity for entrepreneurs to create great jobs for people to enable employees, their households, and communities to flourish. Tim has been talking about this for a long time, and we've deeply embedded this hypothesis into our impact framework and mission.

    Our work in the Ventures practice of Fireroad comes at this thesis by investing in the flourishing of the founders in our portfolio. Our belief is that: as founders are supported in their overall wellbeing, they will be better positioned to build healthy workplaces, products and services, with cultures that help other people flourish. This brief video of Christy from the 2022 Ocean Demo Day articulates our position on why this is worth spending time, resources, and energy.

    Beginning in Q1 of 2024, we are launching multiple resources for founders in our portfolio that focus on their flourishing, including: access to founder-centric coaching, mental health services, and spiritual direction. Instead of building all these resources and tools internally, we're partnering with remarkable and aligned organizations, like: Morrow, Ocean, Simba Technologies, and Soul Care.

    In a fundraising environment where it's crucial to have a differentiated strategy, the fullness of our impact framework not only sets us apart but also enables us to partner with Impact Investors to participate via their Donor Advised Fund.

    New Space

    We also are looking forward to making an office in the University of Cincinnati's 1819 Innovation Hub our shared home with portfolio company, Tembo. We'll be able to host groups (like the 2024 Accelerator cohort), events (like investor luncheons), and spend time alongside venture-builders in the region. One of Cincinnati's earliest VC funds, Cincy Tech is in the same building, along with Main Street Ventures, Lightship Foundation, and the University of Cincinnati's Center for Entrepreneurship.

    In Conclusion

    We end 2023 with spirits of gratitude and humility. To be trusted by each other, LPs, partners, and founders is no small thing. To be in the first days of building Fireroad Ventures, alongside founders who are in their earliest days is no small thing. Endeavoring to raise $16M in an environment unfriendly to emerging VC managers is no insignificant thing.

    But, the same thing that is true for entrepreneurs is true for us today: who we are becoming matters alongside that which we are building.

    We have grown in patience, perseverance, and trust. We have stopped to celebrate with one another and our community. We have challenged each other to be clear, courageous, and disciplined.

    Heading into 2024, we're grateful for the partnership and community that has helped bring Fireroad to life over the past year and those who have been part of the prequel seasons. We wouldn't be here without each step along the way.

    Let's keep going …

    P.S. If you'd like to be part of the work of Fireroad Ventures, we are working with accredited individual, institutional, and impact investors to raise Fund I, a $12M inception-stage venture fund. We make investments into technology companies that are led by purposeful founders and are committed to their flourishing as leaders. We invest to bring the economic and innovation benefits of venture capital to our region for generations to come.

    Email christy@fireroad.io if you'd like to have a conversation about participating in Fund I.