Making `Noise' for Startups

Paul Solitario, investment banker and champion of Charlotte's entrepreneurial class, was sitting in his 24th-floor office at the Bank of America Plaza Building earlier this week reminiscing about the much hungrier days of local startups.

"It was lousy," said Solitario, managing partner of Cerium Capital, LLC, a private equity firm which focuses on U.S.-based information technology and business service companies with sales of between $5 million and $100 million. "There was just no real tradition of investing in startups."

Of course, it's still no cakewalk on Main Street. To that end, Solatario these days is plugging Innovare Capital, a new startup of his own which, he says, will help give area startups better shot at survival.

Launched last month, Innovare Capital offers an equity-like investment dubbed "revenue based purchase order financing." Simply put: the fund gives small businesses capital in exchange for a percentage of gross revenue over a defined period of time.

For owners, the upside is they get can access to capital without giving up ownership in their company. The funding is intended to assist companies that have secured a purchase order, yet need the funding to fulfill the order, said Solitario, who shares ownership with his partner at Cerium and Stephen Bollier, CEO of Innovare Capital.

The launch is a natural for Solitario, as it extends his passion for building out Charlotte's small business landscape. A former investment banker at First Union bank and later First Citizens Bank, Solitario began crusading for local entrepreneurs shortly after his own startup (he was able to raise $600,000 of a 1.2 million investment target) pharmaceutical marketing firm, failed in 2002 in the post-9/11 downturn.

"Great idea. Atrocious timing," he deadpans.
He adds: "The good thing is that I know what it feels like to be on the other side making a presentation investors."

Since then, the 50-year-old Solitario has been ubiquitious on the startup scene, whether it was launching the popular WED3, a local "matchmaker" for young companies and interested investors, to serving as president of the nascent Charlotte Regional Technology Executives Council.

As Terry Cox, president of the Business Innovation and Growth (BIG) puts it: "Paul has been one of the people in Charlotte who will take ownership and start new things; he'll say, let's put a stake in the ground and let's do it. And frankly, I haven't always been so sure some of those ideas would work."

Solitario says: "All of this is about creating some noise for the entrepreneurs in this community. The entrepreneur almost never knows how it is they'll become successful. What's important, though, is that they believe they can."

Black Firms Look For Room Under DNC's Tent

The momentum – some have called it disillusionment – has been growing for a while now. Ever since former Bobcats owner Bob Johnson challenged Charlotte’s black business owners in 2010 to become more deliberate in their efforts to gain a bigger slice of the city’s economic pie, that goal has risen to the top of many to-do lists.

So, too, has the topic of economic inclusion. Once reserved for hushed tones and closed office doors around town, race and business have found their way into public discourse.
These days, academics hold court at Johnson C. Smith University about the barriers for black-owned startups in gaining access to capital. Business and political leaders mix it up at the Center for Intentional Leadership about the economic value of a racially diverse economy. And black business owners vent in focus groups about their struggle to reverse their fortunes in Charlotte.

Now, for better or worse, the 2012 Democratic National Convention is shaping up as a milestone in that critical dialogue. One reason: many black business owners see their success in gaining a piece of the economic opportunity brought here by the convention as a kind of proxy for whether Charlotte’s "inclusion-fest" is authentic or empty rhetoric.

How else, for example, to explain the 35 local black business vendors, from resturateurs to party planners to building contractors, gathering regularly for the sole purpose of getting a piece of the financial action the convention is bringing to town?

The group, which started out as informal, now goes by the name Carolina Regional Minority Partnership Coalition. Its mission: "to ensure that minority business owners are able to equally participate with the 2012 DNC Convention..."

The group’s chairman, Charlotte attorney James Ferguson II, declined to discuss details about the group’s specific plans, other than gaining competitive scale by partnering with larger mainstream companies. He said the group has already had a productive meeting with Dan Murrey, head of the Charlotte DNC Host Committee, and former Charlotte mayor Harvey Gantt, who has been researching "best practices" in other host cities.

"In several previous DNC conventions, the actual number of minority participants has been less than we’d like to see," said Ferguson, mentioning Denver and Boston. "I think Charlotte can be different. And the fact that we’re already organized puts us ahead in the game – or at least that’s what I’m told."

Let’s hope so, especially in light of the national party’s checkered past with minority businesses. For years, the Democratic National CommitteeÖ has faced complaints from party members that it awards too few contracts to African Americans. In April, the Huffington Post, in partnership with the Center for Responsive Politics, published an article titled "The DNC’s Family Feud Over Minority Contracting" that estimated campaign spending on firms with at least one African American senior principal was a mere 1.5 percent of the party’s total spending on contractors in 2010.

For its part, the DNC says that of the $64 million in discretionary contracts the party awarded during the 2009-10 election cycle, $19 million went to minority-run companies.
"Over the last two years, the DNC has taken unprecedented steps to address what has been a longstanding concern about minority contracting," Patrick Gaspard, executive director of the Democratic National Committee, wrote in his blog. "Already, those steps have yielded positive results, and we remain committed to taking additional concrete steps going forward."

It’s encouraging that Dan Murrey of the Charlotte host committee isn’t mincing words about his intentions: "We’re in the process of trying to create a convention with the broadest participation ever. It’s a top priority for us," he says. "Of course, we’ve got to be realistic about how much work there is out there... I can’t force them to chose one vendor over another, but I hope to make it hard for them not to use our local businesses and minority vendors."