Organization helps businesses ‘Elevate’ to the next level
Organization helps businesses ‘Elevate’ to the next level
Funding allowed new chassis maker to begin production
Posted: Friday, April 19, 2013 12:00 am | Updated: 9:10 am, Fri Apr 19, 2013.
By Barry Rochford
Robert Frost and Steve Hawk know chassis. They know how to design them. They know how to build them. And they know how to sell them.
What they didn’t know was whether their plan to start a chassis-making business would get off the ground. At one point, they considered commandeering a garage just so they could actually get to work making them.
“We just wanted to do it. We wanted to get going, but we wanted to do it right, too,” Frost said.
But then in 2012, Frost and Hawk met with a group of investors who knew something that still wasn’t completely clear to them: This was a business that had a real shot at being successful.
Their venture, Wolfpack Chassis LLC, moved into a leased, 53,000-square-foot space at 800 Weston Ave. in Kendallville last December after securing $630,000 in startup funding from the group of investors and another $125,000 from Elevate Ventures Inc., a nonprofit formed by the Indiana Economic Development Corp. in 2011 and tasked with helping entrepreneurs start and grow their businesses.
For Frost and Hawk, it was the culmination of a year of honing a business plan, refining pro formas, making pitches to potential investors, nearly closing a deal for a facility in Middlebury only to have it fall through at the last minute and scrambling to find a new home for their dream.
Frost previously was a global program manager at Zimmer Holdings Inc. He’s also worked at Medtronic Inc. and at one time worked in chassis and technical development at Navistar International Corp. in Fort Wayne. Hawk is a former chassis operations manager at Goshen-based Lippert Components Inc.
At Wolfpack Chassis, the pair plan on supplying chassis to recreational-vehicle and manufactured-housing makers — everything from small, pull-behind, travel-trailer chassis to 80-foot-long mobile-home chassis.
Consolidation within the industry has presented an opportunity that Wolfpack Chassis can capitalize on, Frost said.
“Nobody likes being dependent on a sole-source provider,” Frost said. “If the quality or delivery is not there, they have no alternatives.”
Yet, even with their background and knowledge of the industry, Wolfpack Chassis was just a business plan until Frost and Hawk were referred by the Northeast Indiana Small Business Development Center to Elevate Venture’s Robert Clark, one of two entrepreneurs-in-residence the organization has in the region.
Clark and his counterpart, Dave Corcoran, who founded technology company TrustBearer Labs LLC in Fort Wayne and eventually sold it to VeriSign Inc., act as sounding boards and facilitators to entrepreneurs and early stage companies. They provide guidance on business plans and offer advice on how companies can grow. They also act as matchmakers of sorts, pairing businesses with potential investors who can not only provide needed funding, but often have experience in, or knowledge of, the industry an entrepreneur is trying to crack.
“That’s one thing that Elevate brought, is they actually brought people that want to help small businesses and help entrepreneurs,” Frost said. “And Elevate also brings not just finding the funding, but they also have a lot of resources and recommendations that they can help you with.”
Clark and Corcoran operate out of the 1st Source Center in downtown Fort Wayne, on the same floor as the Northeast Indiana Regional Partnership. The location is fitting, as one of the main “pillars” for the partnership’s Vision 2020 effort to improve the quality of life and economic opportunities in northeast Indiana is bolstering entrepreneurship.
Elevate Venture’s investment in Wolfpack Chassis is the first the organization has made in a business in northeast Indiana. That investment was made through the organization’s $9.5-million Indiana Angel Network Fund. It also manages the state’s 21st Century Research & Technology Fund and the Indiana Community Development Fund.
“This is like the perfect model for what Elevate would like to invest in, because we leveraged our money, we got strategic investment partners who partnered with the company, plus we were working with guys that were smart and they had experience in the industry,” Clark said.
Last year, Clark and Corcoran met with 125 entrepreneurs and companies in 10 northeast Indiana counties, often directed to them by each county’s economic-development organization. This year, Clark said, that number will rise to more than 200.
At the time Elevate Ventures was formed, Clark said, northeast Indiana companies represented just 2 percent of potential venture-capital deals in Indiana — a huge disparity given the region’s population. Since then, that’s grown to 25 percent of the deal flow in the state.
Through a program called “economic gardening,” Elevate Ventures identifies existing businesses that have the potential to grow in scale, then provides assistance in helping them achieve that.
Tempus Technologies Inc. in Auburn has taken advantage of the economic-gardening program. The company, which provides point-of-sales systems and complementary services to retailers and other businesses, has been working with Corcoran, said President Jason Sweitzer.
“People like Dave Corcoran are quite an asset for us because he’s already been down the same road we’re on,” Sweitzer said. “It’s already influenced some of the business decisions we’ve made.”
For example, he said, Corcoran was instrumental in changing patents the company has filed for some of its intellectual property to make them more appealing to a potential suitor down the road.
Perhaps the most important role Elevate Ventures plays is assisting companies with finding funding. Clark said when he looks to match investors with a particular business, he wants investors to contribute not only their money but their expertise to the venture. Too often, investors hand over money to something they’re not familiar with, only to see it disappear.
“In the past, it’s been very fragmented or all over the place in terms of people who have put money into companies,” Clark said.
Because Elevate Ventures has the ability to make its own investments, “(potential investors) see us as an investment partner,” he said. “Now if Elevate is bringing the deal to them, the deal has been vetted. That makes it less risky for them.”
The $755,000 that Wolfpack Chassis received allowed the company to lease its Kendallville facility, renovate the space, purchase needed equipment, install a massive paint bay and set up two production lines.
Those production lines were up and running by the beginning of March, Frost said. In mid-April, the lines were averaging 10 chassis of varying types a day, and output is expected to rise to 30 by the end of the month.
Wolfpack Chassis has hired 15 employees, and Frost said the company has sent quotes to potential customers that represent about $15 million in business. Its facility in Kendallville, which previously housed Reliable Production Machining and Welding, could contain 10 to 12 production lines.
“We always had a vision of what we could do,” Frost said.
And now they know that vision can succeed.
Elevate Ventures Inc. is in the middle of a fundraising campaign to support its operations in northeast Indiana over the next three years. Robert Clark, entrepreneur-in-residence, said $750,000 of a $1-million goal has been raised so far. For more information about Elevate Ventures, visit www.elevateventures.com.