People and Companies Top Stories

Donna Mackenzie

Donna Mackenzie

of FireSpring Fund, Starter Studio and Canvs [By: Eric Wright]

1611-donna-mackenzie-0488-editIt is a mantra of entrepreneurs around the world: you can make your community a better place by building your region’s technology ecosystem, which in turn helps retain and attract technology companies, technology jobs and increases access to risk capital. Donna Mackenzie and her partners at FireSpring Fund, Starter Studio and Canvs are pursuing that goal, convinced that by educating and enlisting the community they can create a diverse technology center providing opportunities for growth and economic development.

The plan is bold, but one that has proved incredibly successful in building a thriving, job generating, start-up community in places like Cleveland, Ohio, where the economy had been moving quickly in the opposite direction. Known for being in the heart of the “Rust Belt,” Cleveland embraced a proactive approach to jumpstarting their entrepreneurial environment and today it is ranked one of the best “Start-Up Cities” in America. Though, like Central Florida, the lure of Silicon Valley capital still pulls many of their best and brightest away as the companies scale for growth.    

Even if it seems audacious, it is familiar territory to Mackenzie, who has been a part of launching and scaling two of Orlando’s most audacious successes: Channel Intelligence, which sold to Google for $125 million and IZEA, which recently went public. She helped create FireSpring Fund through a grant from the US Economic Development Association (US EDA), with matching funds led by the University of Central Florida, the City of Orlando, Rollins College, Starter Studio, and Canvs. The grant will be used to raise, deploy and manage a $5 million evergreen seed fund, with the expectation that the success it generates will be used to reinvest in even more innovative technology and advanced manufacturing startups in Central Florida.

The plan is for FireSpring to take companies that have been identified and mentored through Starter Studio and UCF’s I-Corps teams, which whittles dozens of candidates down to a select few, then guides them through the initial stages of product market viability, then business plan, infrastructure and team development. Once they have completed that process, FireSpring Fund will provide the most promising starters with access to incremental rounds of seed funding, critical to maturing them into companies which are then attractive to angel groups, early-stage venture capitalists and federal SBIR agencies.

The Deep End of the Startup Pool

“The financial side of business always came easy to me, which is probably why I gravitated in that direction; it was, as they say, the path of least resistance,” Mackenzie shared. “But my passion was always in the arena of growing businesses. I thought about working for a big corporation like Disney, but that had little appeal for me. I was interested in the dynamic of the new venture and always enjoyed early stage development, otherwise, frankly, I get bored.”

As a CPA she had joined a management company, working with Fortune 500 companies around the world, which is where she became enamored with technology and developing companies. That led her to become involved in several startup companies, the most noteworthy Channel Intelligence, which provided technology for ecommerce, joining them when they were a little over 20 people. When she left, they employed close to 300, and the company had gone through several rounds of funding. As a Senior VP and Chief Financial Officer, Mackenzie became well versed in the venture capital world. 

“IZEA was the sixth early stage startup I helped launch. Much like Channel Intelligence was at the genesis of Internet merchandizing, IZEA was one of the first to connect social media bloggers with brands. It was almost considered heresy at the time,” she explained. “It took the market awhile to understand it, but I was drawn to the innovative and disruptive vision Ted (Murphy) represented. Also we attracted VC funding from Silicon Valley; back then it was very rare for Valley VC firms to invest east of the Mississippi.”

“It was a crazy ride, as the market was quickly evolving and we were evolving just as fast. We were growing like a hockey stick and then bam, we were hit in the face with a recession. IZEA was considered ‘experimental marketing’ at that time and was one of the first places businesses cut their budgets. It was like the apocalypse. We had to scale way, way back, but because we were running so lean, we were able to eventually double our gross profit margin,” she said. Though she views it as a great time of learning and rethinking their model, it was personally devastating as they had to lay off so many who had invested so much into the company. But their efforts kept the ship afloat and they later were able to move IZEA to a public offering.

The Starter Who Coaches Starters

Mackenzie became involved with nonprofits as the interim CFO of One Laptop Per Child and later the executive director of Starter Studio, while continuing with her consulting business. Kirstie Chadwick, now president & CEO at International Business Innovation Association (InBIA), ran Starter Studio before Mackenzie. When they worked together years ago at the UCF Venture Lab, they had discussed the need for early stage seed funding.  They even had written a grant with US EDA for such a fund.

To Mackenzie’s surprise, they got the grant, which was matched by other public and private sponsors in April 2015. FireSpring is a 501(c)3, much like a charity, which receives tax deductible contributions, modeled after a phenomenally successful program in Cleveland called JumpStart. There they faced the same problem many have seen in Central Florida, that the access to startup funding was almost nonexistent. “JumpStart is now a little over 10 years old and has grown to over $75 million, as these funds typically return between two and six times,” Mackenzie cited.

“What is more important however, they have attracted over $1 billion in risk capital to their area. That is what we believe can happen here; money typically invested in real estate, stocks or sitting in CDs becomes invested in growing new businesses.”

Their goal is to invest $1 million per year, but as the companies succeed, the fund enjoys a return and it continues to grow. Additionally, because they are a nonprofit, they are not regulated like a typical venture fund. They can make investments as soon as resources are gathered, and have the ability to receive funding from foundations and philanthropists. Beyond how they get their money, they function like a typical venture fund, or more accurately, a funded accelerator. “A funded accelerator is a very structured program, like TechStars, Alchemist or Y Combinator. We put our candidate companies through a six month intensive and then select the best for ongoing funding, based on their success matrix,” she said.

“What I love about being in this type of nonprofit is we can tell contributors, ‘Once we are up and running, we will never have to come to you again!’ This isn’t speculation; I can point to these types of funds all across the nation,” she added. “This could change the trajectory of this area.” 

Contact:  firespringfund.org | starterstudio.com | canvs.org

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i4 Business magazine has become one of the most trusted voices for and about the Central Florida business community. Each month through our print and digital platforms, we provide access to meet, to learn from and to learn about some of the incredible entrepreneurs and business leaders who are shaping our region.

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