YES! Louisville finally has produced our first $1 billion baby, our first Unicorn, our first $1 billion market cap cloud-based tech company!
The problem is, we couldn’t feed our $1 billion baby enough cash, so she got adopted by Atlanta. That’s right, the company is no longer in Louisville. It’s in Atlanta. It’s called Rubicon Global, and I talk about it a lot when speaking to people about Metro Startup Launcher. But, their move is totally understandable and not necessarily a bad thing for Louisville.
Rubicon was started in Louisville nine years ago by two guys who were friends from Eastern High School, Nate Morris and Marc Spiegel. Nate reportedly maxed out personal credit cards and sold items on eBay to fund initial expenses, like a website and basic legal work. I love startup entrepreneurs who can take those kinds of scrappy risks to get their company started. In fact, I funded a company to the tune of $80,000 on credit cards back in my early entrepreneurial days. It’s was scary, but it worked. Obviously, it worked even better for Nate.
Is credit card debt a good way to get your company started? Well, ya gotta do what ya gotta do to get going; however, big startup areas like Silicon Valley seem to make it a little easier for a startup entrepreneur with no capital to raise a small amount of cash, test out their idea, and then shut down or raise more capital.
Let’s use crowdfunding to make it a lot easier for a startup to raise their first $25,000, spread the risk out to a bunch of small investors, and prove or disprove their concept.
I’m not saying an entrepreneur should have no skin in the game. An entrepreneur should risk everything they possibly can on their company. Believing in yourself 100% is the number one priority for an entrepreneur. So, they should be willing to risk their savings, debt, and anything else they can. However, an entrepreneur who starves to death will not go far! There’s a happy medium somewhere in there.
Rubicon’s next step (after credit cards) was to raise capital from a few locals individuals and begin building their system. Shortly after, in January 2009, they raised $1 million, lead by Atlanta-based QuarterMoore. Since that time, the company has moved to Atlanta and received multiple rounds of funding, totalling $196 million (including an investment from Leonardo DiCaprio, by the way). The most recent funding round valued the company at $1 billion. Rubicon now is the worldwide leader in sustainable, cloud-based waste and recycling solutions.
So how did we let this $1 billion baby run away to Atlanta? It’s a little too simplistic to say that it was all about money. We could speculate that if we had pooled together more money, they would have stayed in Louisville. However, you also have to look at the synergies of the investors. QuarterMoore is an Atlanta firm lead by Lane Moore. He and his family have a strong entrepreneurial background. One of their previous endeavors includes a company called Bagster, which provides large, strong bags to collect up to 3,300 pounds of waste with online collection scheduling. The company sold to Waste Management in 2009. QuarterMoore and their partners also are the largest franchisee in PODS (Portable On Demand Storage). So, clearly, their capital, waste experience, and logistics experience provides a strong partnership for Rubicon.
Would it be nice to have this $1 billion tech company and all of their jobs in Louisville? Of course it would. Does it make sense for Nate to move the company to Atlanta and partner with QuarterMoore? Their success speaks for itself.
So, how can Louisville benefit from Rubicon’s success? Let’s start by raising the bar on what we believe: REALLY BIG IDEAS CAN COME FROM LOUISVILLE. These days, connections, sharing knowledge, and working together with the whole world is the way to build success. Rubicon is a cloud-based company. Louisville can produce more cloud-based, high growth, high value companies like Rubicon. In fact, there are several in the works, including one that I’m working on. We can’t use our lack of programming or startup density as an excuse. Talent can work from anywhere these days. We can scale businesses using available local talent plus any other talent we need over the Internet. The important thing is: let’s cultivate and celebrate big crazy ideas and at least get them off the ground.
I attended an event a while back and saw some guys pitch their company. It was similar to Rubicon in some respects (only a different industry), and I thought it sounded totally doable. At one point, they said they were going to be worth $25 million in 5 years, and a bunch of people in the audience laughed. What?! We need to change that attitude NOW! Rubicon took 9 years to become worth $1 billion. We can produce plenty of companies that are worth $25 million in 5 years.
Another benefit from Rubicon’s success is for us to maximize networking, experience, and connections. Lane Moore is on the board of Endeavor in Atlanta. Endeavor is an amazing organization that helps fast growing startup leaders connect with experienced and extremely successful entrepreneurs worldwide to figure out how to maximize their success, global impact, and wealth. Louisville also is an Endeavor city. Let’s keep building on those connections. Let’s work with Rubicon and Endeavor to learn how to duplicate their success. And, let’s do it again and again with Louisville ideas!
Finally, let’s get as many local investors as possible to own shares in companies like Rubicon. Our goal at Metro Startup Launcher is to make it easier for startups to get started in Louisville and to produce more companies like Rubicon. With Regulation CF crowdfunding, a startup company can go online, create a profile, and raise as much as $1 million per year from lots of small investors. However, they need support from the whole community to make it work. Metro Startup Launcher is working hard to build an audience of many micro-investors for our metro area startups. If more local people invest in companies like Rubicon, and the companies become extremely successful, those investors make lots of money.
As local investors make more money from these kinds of investments, even if the company moves away from Louisville, more of that money will go back into local area startups. As we develop more and more startups, more of those startups will stay in Louisville, producing more jobs and more wealth for the entire metro area.
HELP US BUILD OUR AUDIENCE OF LOCAL INVESTORS, INCREASE LOCAL STARTUPS, AND INCREASE LOCAL WEALTH BY SHARING THIS ARTICLE!
Photo Credit: https://commons.wikimedia.org/wiki/File:Rubicon_Logo.png