New Venture Capitalist on Hunt for Companies

Kevin Ogilby has split allegiances: He’s excited about the Gators, but he’s still loyal to his alma mater, Vanderbilt. Yet despite the conflict, Ogilby has no problem fully embracing one attraction here: the growing entrepreneurial environment.

“Without a doubt, Gainesville is the gravitational center of innovation in Florida,” he says.

Ogilby hopes to help move that innovation economy to a higher level through his new business. This spring, he set up a one-man shop representing Duncan-Williams, a Memphis-based investment bank that is using Gainesville as its first foray into venture-capital funding.

“This is a huge benefit to our entrepreneurial community,” says David Whitney, the entrepreneur-in-residence at the University of Florida’s College of Engineering. “Kevin, and Duncan-Williams, are game-changers for Gainesville.”

Although Ogilby is operating by himself in Gainesville, he has the resources of his bank’s offices nationwide to help him research businesses and find investors.

He also has the backing of Santa Fe College’s Center for Innovation and Economic Development, managed by Assistant Vice President for Economic Development Dug Jones. “Dug provided me a great location for an office [in the CIED building], and he has been helpful in other ways,” Ogilby says.

Ogilby is well-suited for his new role. After graduating from Vanderbilt, he returned to his hometown of Memphis and co-founded Legend Airlines, a regional carrier that operated profitably but closed because it couldn’t raise enough capital to expand.

“The airline experience gave me a thirst for being an entrepreneur,” Ogilby says.

He then spent six years with two real estate development firms and three years managing a hedge fund before arriving in Gainesville. The choice was easy for several reasons. “My wife, Kristine, grew up here and graduated from UF,” he says. “We thought it would be a great place to raise our three kids.”

After making an initial check of Gainesville’s innovation economy, Ogilby approached Duncan F. Williams, CEO of Duncan-Williams, to request an affiliation. “He went to a rival high school and he was ahead of me a couple years,” Ogilby says. “Our schools played basketball against each other.”

With Williams’ blessing, Ogilby continued his due diligence on Gainesville. “I asked people: “What are the reasons I shouldn’t come here?”

Randy Scott, the founder of toothpaste additive NovaMin, which GlaxoSmithKline bought last year for $135 million, had this response: “The deal flow isn’t as heavy as it might be elsewhere, and there’s a limited amount of capital. It’s not an ideal market, but what market is?”

Ogilby appreciated Scott’s caution, but he also saw plenty of opportunity, including:

  • The success of people like Scott, as well as Richard Allen and Jamie Grooms, the founders of RTI Biologics, who now are fostering emerging bio-tech businesses.
  • UF’s strong research base and the support that the university’s Office of Technology Licensing provides to bring new inventions to market.
  • The community’s support of entrepreneurship through the Gainesville Area Chamber of Commerce, the Sid Martin Biotechnology Incubator, the Gainesville Technology Enterprise Center, the Florida Innovation Hub, Innovation Square and Santa Fe’s CIED.

“I want to be on the front end of what’s happening here,” he says. “I want to get to know people and build relationships that will pay off in three, five and seven years.”

Ogilby is on a fast pace in building relationships. “I’m looking for ways to help promote people,” he says. “The last thing I do is ask to do something for a fee.” This approach is in keeping with the philosophy that A. Duncan Williams, the father of Duncan F. Williams, adopted when he founded Duncan-Williams more than 40 years ago.

“We don’t hard-sell people,” Ogilby says. “It’s not like we’re going to say,‘If we don’t make any deals in the first three months, we’re out of here.’”

Gainesville Strongest Opportunities

Gainesville has a strong base of innovative companies in four categories, Ogilby says: health care and medical devices, business services, information technology and clean energy.

He also is impressed by innovative start-ups like Grooveshark, the Internet music company. “It’s the poster child for local innovation, and it’s grown rapidly to 100 employees,” Ogilby says.

He is equally excited about Student Maid, a cleaning service that hires honor students. Owner Kristen Hadeed is expanding the company to other university towns.

“She’s a 24-year-old who has done a magnificent job of figuring out how to run a business,” Ogilby says.

When beginning the process of matching a business and investors, Ogilby gets to know as much as he can about a company.

“I’m not looking to provide a company with its first $50,000 check,” he says. “I’m looking for companies that need $1 million to $2 million to get over a hump and expand, or are in a position to be acquired,” he says.

The next step is to determine the best growth strategy for a company among the following choices:

  • Exchanging equity for cash,
  • Borrowing capital, or
  • Seeking a merger partner or a buyer.

If selling shares makes sense, investors want ranges from 20 to 60 percent, depending on the level of risk, he says.

If debt is the best approach, people lending money typically seek a 10 to 20 percent interest rate plus stock options, he says.

Ogilby is confident he’ll develop deals like those locally. Meanwhile, he’s busy connecting with local players who can help advance his vision, including Santa Fe College President Jackson Sasser.

“We’re talking about the huge opportunity of making Gainesville a hub for developing mobile applications,” Ogilby says.

“What I do isn’t work to me,” Ogilby says. “I have a passion for building businesses and helping entrepreneurs. I love doing the right things for the right people.”

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