Russ: Hi I’m Russ Capper and this is BusinessMakers USA brought to you by Insperity, inspiring business performance. Checking in today from Ft. Lauderdale, Florida where my guest is Christopher Malter, Managing Partner of South Florida Accelerator. Christopher welcome to the show.
Christopher: Thank you for having me Russ.
Russ: You bet.
Christopher: Pleasure to be here.
Russ: Tell us about the South Florida Accelerator.
Christopher: The South Florida Accelerator – we started it about 2 years ago and basically it’s not like traditional accelerators like a Y Combinator which has boot camps – they have 12 – 14 weeks. So we do indentify technologies in high growth market, however we have a different model. It’s called an off-ramping model which basically means we work with multi-national companies like Citrix and Sato and Brightstar and these are the top tech companies in South Florida and Florida.
Nobody has ever really approached them in Florida and so we did. We are addressing their R&D need and their pipeline, so we work with them in identifying their new technologies, whatever they need to either bolt on or acquire. We accelerate the maturation, we fund it. They’re involved with the mentoring and then they have the first right of refusal for acquisition or we can integrate it into their sales channel.
Russ: Wow, that’s interesting.
Christopher: So the approach is it’s a shorter time to market and it reduces their risk.
Russ: And completely driven by these big companies.
Christopher: Correct. We’re risk adverse.
Russ: Okay. So is the accelerator a nonprofit or is it a for-profit?
Christopher: No, it’s a for-profit. We bring it from inception to obviously an MVP. We also work with other countries, primarily Israel. So we were in Israel not too long ago – actually in November – and we work with them in identifying technologies that we can soft-land in the state of Florida. So Israel is probably one of the best for cyber security. Our focus is very concentrated so we focus on cyber security, life sciences, medical devices, genetic healthcare and digital health. We also focus on IOT and we’re getting into cannabis as well.
Russ: Wow, interesting; so who is the big company that promotes cannabis?
Christopher: In the state of Florida it was just recently approved from a medicinal standpoint. There’s only one medical research institute that is primarily responsible for formulary development and standards and that’s Moffitt. We have a very good relationship with Moffitt so we’ll be working with them to create companies and one of our partners is called Tikun Olam, they’re out of Israel, they actually grow cannabis, and so we would do a lot of our clinicals in Israel because we can’t do it in the United States because of federal laws. The data will support a lot of growth from a medical device perspective or a tech perspective and then we would just sort of launch them in the United States.
Russ: So Florida is not one of the states that’s legalized marijuana yet.
Christopher: Not from a recreational perspective, from a medicinal perspective.
Russ: So this is a business show and you mentioned it’s not a nonprofit the Accelerator.
Christopher: It isn’t.
Russ: So share with us how Accelerator makes money.
Christopher: We’re broken up primarily into 3 entities. We have a fund that we are launching that’s a $75 million fund; it will be the largest early stage fund in the state of Florida in the history of Florida. We’re launching that in 2018 and we’re actually working again with Israel in that capacity so we have a couple of partners there, so that’s one area. The second is the accelerator itself and we have eleven portfolio companies now and by the end of next year we’ll probably have 30. And then we also have a nonprofit side called Innovation Florida that’s run by Senator Maria Sachs; she’s our Executive Director. We basically formed that entity because we needed an educational voice. Our focus is growing companies, our focus is not building innovation ecosystems but we realized early on that this market…
Russ: It’s part of the formula.
Christopher: It needs that educational arm, so all of our partners are part of that; they sit on the board, we have quarterly meetings and they give input. We have relationships with every single university – University of Miami, FIU, FAU, all of the universities up north UF, FSU – so we work with all of these universities also with tech transfer. I’ll go one step further; been down here 22 years, had done some exits, worked with Newt Gingrich on healthcare policy issues and I will tell you that Florida is like this dormant state with assets. What that means is there is an enormous amount of technology sitting on shelves at universities but there is nobody commercializing it. So they’re great at developing patents but they’re really poor at commercializing the technology and we see that as an opportunity.
Russ: Wow, that’s not real uncommon either; I’ve seen that all across the country somewhat. I’m curious, back to the fund – the $75 million – are the investors in that some of these large companies and Israel?
Christopher: Correct and also they are part of the vetting process going back to the off-ramping model, so there is a clear path to success. It’s not only seeing deal flow just based upon deal flow, it’s sort of going shopping because our multi-national strategics are already looking for this, so that’s the approach.
Russ: Real cool. Well it sounds like you’re hitting on all the cylinders that are important these days and I expect to see some exciting things come out, maybe we’ll come back to Ft. Lauderdale and get an update.
Christopher: I’d love to give you the update; I’ll go one step further if I may. What we did here, because this market is primarily real estate venture capital is not a big word; it’s not like Silicon Valley or New York or Austin. So we built out our model in the first 2 years; we built our strategic partners and then we obviously built our portfolio companies. So the last part of the sort of the puzzle was always building a home; building a house for this. And so we were at Broward College, we had 13,000 square feet – we actually exceeded that very, very quickly – so we are now in the process of acquiring our first property in Tampa.
It’s 33,000 square feet, it’s an old cigar factory, and so we’re going to turn it into a co-working space somewhere like a WeWorks – WeWorks has a $14 billion market cap – but we have some secret sauce. So what we’re doing is it’s not just a real estate play, we are supplanting our innovation ecosystem which we have built and proven to all of these markets and we’re targeting second tier markets like Tampa, Orlando, Jacksonville and even South Florida. We should be closing in December and we’ll probably be open and ready to have tenants – actually we’re over-subscribed now because we have tenants that have already given their approval to go in.
Russ: Okay. And when you say we in this facility you’re talking about the South Florida Accelerator?
Christopher: Yeah so I have three partners. It’s myself, Thomas Buchar and Oz Nakash; Oz is out of Israel, Thomas is out of Tamps and I’m here.
Russ: Great. Interesting story and I appreciate you sharing it with us, thanks a lot Chris.
Christopher: Thank you.
Russ: And that wraps up my discussion with Christopher Malter, the Managing Partner of South Florida Accelerator and this is BusinessMakers USA.
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