Entrepreneur David Gardner relates to many of the young minds he has mentored while running Cary Cofounders Lab, a downtown Cary incubator that provides free office space and resources to startups in the Triangle.
Cary Cofounders Lab, located on the third floor of The Cary theater, has been a welcoming space for new entrepreneurs to shape their ideas, grow their businesses and float their business models past Gardner, a serial entrepreneur who has co-founded or founded seven startups, including PeopleClick, a human resources software company that was sold for $100 million.
“They are super smart. They are super passionate, and they’ll work themselves to death,” Gardner said of many of the entrepreneurs he has guided over the last few years. “All they need is a little money and a little guidance, and those companies can be very successful here.”
Cary approved a license agreement with Gardner in February 2015 that allows him to use the 1,730-square-foot office space in the town-owned theater – for free – to host and mentor startup companies. In return, he is required to consult town staff on economic matters at least eight hours per month. Council members hoped this agreement would grow startups in Cary as part of the town’s downtown revitalization efforts.
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The incubator also is required to mentor 50 entrepreneurs per year, according to the agreement with the town. Ted Boyd, the town’s downtown development manager, described the incubator’s first year as a “resounding success.” Boyd said that number has reached more than 350.
The council approved a second year of the agreement on Nov. 10 with the same terms.
“It’s been an innovative way to encourage investment, and so the council’s experiment has paid off many, many times over,” Town Manager Sean Stegall said.
Investing in startups
Some of the startups mentored by Gardner have benefited from a venture capital fund called Cofounders Capital that Gardner manages. More than $12 million was put in the fund about a year and a half ago by entrepreneurs, including Gardner. The fund finances early-stage software companies after they’ve proven their business models are viable.
To date, about half of the fund has been invested into about 12 companies. One company, called Myxx, connects grocery store chains with consumers via a recipe app that links to products in their stores. Another company, Canopy, focuses on simplifying home services, particularly landscaping.
Companies in the Cofounders Capital portfolio, like Myxx, generally receive about $350,000 in early-stage investment.
Gardner especially connected with the founders of FilterEasy, a subscription service that delivers HVAC filters to your door. When the founders dropped out of college, Gardner was asked to talk to their parents about letting them pursue their idea, which is expected to generate $6 million this year.
“When I was starting my first company, I mean if you told your parents you wanted to be an entrepreneur, it was like telling them you wanted to be a rock star,” he said.
In Gardner’s efforts to help entrepreneurs improve and grow their business, he learns much about the companies, which allows him to decide if he wants to invest in them.
“This is like legal insider trading,” he said. “I can find out everything I need to know before I can invest. So it’s a very interesting way to do due diligence.”
But Gardner will help anyone who comes to him with questions, even if they don’t fit the criteria for the Cofounders Capital fund. He has assisted and personally invested in several local businesses, including the Mayton Inn and Fortnight Brewing Company in Cary.
“Making that early mistake when you’re an entrepreneur, it could be the difference between your company making it and not making it,” said Tim McLoughlin, junior partner at Cofounders Capital, at a recent Cary Town Council meeting. “And being able to pop in down the hall or across the office and ask David his advice on this stuff is really influential to those companies.”
Myxx founder Monica Wood said she expects her company to grow from three people to up to 20 in the next year, and she attributes a lot of that success to working with Gardner in Cary.
“I can’t say enough about having access to this space,” she said. “I feel like we are really putting Cary on the map in terms of technology, and I love that. There’s a lot of people in tech that live in Cary and work elsewhere, and now they can work in Cary too.”
Kathryn Trogdon: 919-460-2608, @KTrogdon