CEO of PS27 Jim Stallings said Jacksonville became a destination for startups during the pandemic
JACKSONVILLE, Fla. – Jim Stallings knows a little something about big ideas.
Stallings worked for IBM for nearly 30 years and, as an executive, helped the technology corporation explode into a global force worth billions.
But when that chapter of his life closed in 2013, he set his sights on Jacksonville and a new goal of launching startup companies as a venture capitalist.
He’s now the CEO of PS27 Ventures, which invests millions in early-stage companies and focuses on industries like financial technology, sustainability and e-commerce. He’s invested in Jacksonville companies like FreshJax, which makes organic seasonings, OnPay Solutions, a payment software company, and SmartBox, a snack subscription service.
“This is the most fun job I’ve ever had,” Stallings told News4JAX as he sat surrounded by Star Wars action figures in his office near the St. Johns Town Center.https://af3a3cfa62b9bac8e9cf91e4a4d128da.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html?n=0
It’s here, in one corner of the Southside office and sometimes on Zoom, that Stallings and his small team use “Shark Tank”-style interviews to grill startup founders who are looking for seed money — usually around $500,000 — to grow their fledgling businesses.
“They come in, they present, we ask them questions, and sometimes they feel a little rough, ruffled and flustered. But the whole idea is to see just how much they believe in it. Do they have conviction? Are they committed? Are they going to really, you know, drive this? Because one of the things we’ve learned in 10 years: 90% of this is about the founder,” Stallings said.
A focus on minority, veteran and female founders
One of the founders who made it through the gauntlet is Justin Zhou, a University of Florida graduate and co-founder of Blue Wave Technologies Inc. Zhou and his co-founders — Miles Clark, Kenneth Cherisol and Julius Regalado — created a device that uses ozone to kill odors and viruses in prosthetics and medical devices. After a long process, Stallings also invested in Ryze, a specialty mushroom-infused coffee company founded by Andrée Werner and Rashad Hossain.
Stallings noted that Zhou and Hossain, who are both Asian-American, and Werner, who is a woman, are a rarity in the venture capital industry that is predominantly white and male.https://af3a3cfa62b9bac8e9cf91e4a4d128da.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html?n=0
“The venture capital industry is one of the worst in terms of having a diverse investment portfolio,” Stallings said. “Venture capital in the United States, there was $78 billion that went out. Less than 2% went to women, less than 1% went to African Americans. You say underrepresented, that is zero representation, almost.”
That’s part of the reason why Stallings launched the Rhea Fund, a $20 million venture capital fund focused on early-stage technology companies, with a specific goal in mind.
“One of the commitments we made to ourselves and to all of our investors was that we’re going to allocate at least 50% of the investment capital to go to women-led companies, underrepresented minority founders, veterans,” said Stallings, who graduated from the United States Naval Academy and served in the Marines. “Part of the reason why is because many of those groups have never had an opportunity to work in business or work and build their own company, or even grow up in a family where there was a business owner that they could learn from.”
Stallings said Hurdle, an investment, was founded by Kevin Dedner, a Black man, and OnPay Solutions, which was recently sold, was founded by Julie Negrete Anderson,a Hispanic woman. Stallings said PS27 is reaching out to people in underrepresented groups to make sure they get access to capital.https://af3a3cfa62b9bac8e9cf91e4a4d128da.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html?n=0
“Because that’s one of the tickets, you need capital, but you also need coaching, you need training, you need the educational support to be a really good founder because the investor wants to return,” Stallings said.
Stallings said the company’s first invested over 60% of the capital to people of color and women. And Stallings sees a lot more of that coming in the future.
Jacksonville: An emerging startup market
The pandemic spurred what Stallings called a “rapid evolution” when it comes to the startup world in Jacksonville.
“Jacksonville is a place where a lot of people on the West Coast and in the Northeast didn’t know about,” he said. “Founders and entrepreneurs in Florida knew about Jacksonville. But they knew more about Orlando, Miami, Tampa. And they gravitated to those markets typically because it was just larger and they had talent.”
But that has changed because of the remote-work boom.https://af3a3cfa62b9bac8e9cf91e4a4d128da.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html?n=0
“The pandemic has convinced high-skilled workers anywhere they can work anywhere,” Stallings said. “And Florida has sort of been discovered, you know, because of it. And they now look at all the different places across the state of Florida, and Jacksonville sticks out because of its growing economy.”
Stallings said there is a perfect mix that makes it ripe for startups: a young workforce, low cost of living and a high-quality education system.
“I call it the trifecta effect. And now Jacksonville has arrived,” he said. “We’re seeing more opportunities come our way than then in the past two, three years than we did in the first four or five years.”
And Stallings doesn’t see that slowing down, even as the pandemic slowly begins to fade, thanks to added benefits like warm weather, the beach and an NFL team.
“I think it’s accelerating and I think it will continue,” he said. “I mean, once you get known and Jacksonville is now on the map, the word spreads amongst the entrepreneur community.”
“Once we are on the map, which I think we are, there’s really no stopping us,” Stallings added. “I think Jacksonville will follow the same path Atlanta followed 25-30 years ago.”
Stallings and PS27 want to help blaze that path, with big investments and more big ideas.
Copyright 2022 by WJXT News4JAX – All rights reserved.
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Digital reporter who has lived in Jacksonville for more than 25 years and focuses on important local issues like education and the environment.