SixThirty places first round of investments | St. Louis Public Radio

SixThirty places first round of investments

Oct 4, 2013

This article first appeared in the St. Louis Beacon: Four out-of-town startups are getting a financial boost that will bring them to St. Louis, at least for the near future.

“After the four months, if they decide that their business is better suited elsewhere, they are free to make that call,” said Matt Menietti, a venture partner with local accelerator SixThirty, “but we’d like to think we have a very strong reason for them to stay.”

For SixThirty, an incubator which specializes in fintech, or financial technology, enterprises, the companies represent the first class of what Menietti hopes will be many investments that hope to leverage the area’s strength in financial services to bring similar businesses to St. Louis.

“I think anytime we add another potential funder for our companies, it’s a win for the St. Louis startup ecosystem,” said Menietti. “The biggest issues we have are capital and talent. Luckily, SixThirty helps to solve both of those.”

SixThirty will infuse $100,000 each into a quartet of companies, taking equity stakes in return. The recipients are Hedgeable, a provider of low-cost, risk-managed investment products; MiiCard, maker of an online identity verification process; Upside, a company providing goal-based investment management; and XYverify, a mobile authentication platform.

In addition to the cash, the companies will also receive free office space at downtown’s T-Rex as well as personalized mentoring, training and networking opportunities.

“We’re a little more hands-on than your traditional incubator,” Menietti said. “That’s why we use the term accelerator. We really do believe we’re accelerating their growth.”

He said the results should boost the area’s fintech scene.

“We’re bringing in incredibly intelligent and connected founders and teams with these financial services companies and we’re also able to provide them with cash to help them grow their business,” he said. “The thought is that if we help connect them with the right people and potential follow-on funders, they are more likely to stay, create jobs and create value.”

The brainchild of Square founder Jim McKelvey, SixThirty was launched in August with support from the St. Louis Regional Chamber and venture firm Cultivation Capital. The four enterprises selected were culled from roughly 100 applicants for the accelerator’s first class. SixThirty plans to make investments in eight companies annually. The current crop of ventures will begin the program on Monday. It will conclude in February before the spring class is chosen.

Menietti said the class is set to wind up with a “demo day” style event where companies can show off their wares.

“Rather than being investment focused, it’s really going to be focused on creating more of these partnerships with the financial services community,” he said. “We have a commitment through the St. Louis Regional Chamber that at least a handful of representatives from each of the major financial institutions here in town will be sending representatives to demo day so that they can start understanding where the product is and how it could potentially help them.”

Menietti believes that two things set SixThirty apart from similar programs. The first is intimacy.

“The smaller class sizes really allow us to get hands on, do a deep dive on these companies and figure out where their gaps and weaknesses are and how we can identify people and resources to help fill those gaps,” he said.

The other is more basic. The outfit simply offers more money than many.

“Most accelerator programs give anywhere between $20,000 and $30,000 each to their companies so Six Thirty is definitely on the higher end when it comes to the amount of cash we’re giving out,” he said. “We believe that is an extra carrot, an extra incentive for people to move here.”

Matthew Kane, co-founder and chief technology officer of Hedgeable, said he was happy to come to town and see what the Gateway City had to offer.

“We do business with some big firms here in St. Louis already so it was a really great opportunity to open up some more doors here where there are tons of financial services companies,” said Kane, whose company is based in New York City. “Outside of New York, St. Louis and Chicago are really big hubs for our industry.”

He also felt trusted names at SixThirty were a big selling point.

“Anytime you can get guys on board like Jim McKelvey from Square and some of these other angels…it’s a great opportunity for a company to really get big fast and really accelerate our sales and marketing efforts in this area,” he said.

Kane couldn’t say if Hedgeable would make the move to St. Louis permanent but noted that the city did offer a number of advantages, including proximity to financial institutions and much lower cost of living than on the East Coast.

Eventually, a regional office here is one possibility. Another is a full relocation. He said the most important factor in such a decision however wasn’t necessarily cash or connections however.

“With a startup it’s all about talent,” Kane said. “You need to be somewhere where you can hire talented people, the best people. Whether that’s New York, San Francisco, Chicago or St. Louis, we’ll be wherever we need to be for our company to succeed.”