A small group of entrepreneurs is making a big splash in the startup scene on Buffalo’s East Side. Operating out of The Innovation Center at 640 Ellicott Street, OneTen Capital is an early-stage coalition investing firm that helps young tech companies raise the capital they need to make their business dreams a reality.
“The genesis of the idea was catalyzed in part by the great groundwork being laid by 43 North,” says Jenae Pitts, managing partner and director of operations at OneTen Capital. “We are focused on the long-term sustainability of this community’s start-up ecosystem, so we are building relationships with those who see it the same way.”
To help acquire capital for local engineering and hardware-based startups, the OneTen team employs a “Coalition Investing” approach—an active investing strategy that focuses on developing partnerships with portfolio companies. “We work together to tackle everyday hurdles as if they’re our own,” Pitts explained. “We work with them on a weekly basis, but we are constantly out in the community advocating for them, too.”
OneTen’s most recent portfolio company is Vader Systems, a liquid metal 3D printing company in Getzville, New York. “The team at Vader Systems is conquering hurdles of physical and mechanical science,” Pitts said. “Experts in their field, they’ve been able to control molten metal in ways no one has been able to.”
So how does the partnership work?
“We have seen that you can either raise money for your business or you can work on your business, but you cannot do both,” Pitts says. “When we took the stress of fundraising off their backs, they began making daily and weekly progress. To the same tune, OneTen will take some of the infrastructure-building off of the engineering team so they can continue to make leap-and-bound progress that only they can make.”
To accommodate the specific needs of portfolio partners, OneTen Capital works alongside existing sales and marketing teams, adopts and supports current goals, and builds relationships with like-minded investors who wish to see Buffalo’s entrepreneurial ecosystem thrive.
“Every case is different,” Pitts explains. “As much as we try to help our portfolio companies see around the next corner, we are realistic about what we do not know. We are, however, above average at finding the exact resource we need to get to the right solution.”
As far as dollars and cents are concerned for OneTen itself, the company shuns traditional venture capital techniques such as collecting standard fees regardless of results.
“Our company earns revenue by adding valueton our portfolio companies,” Pitts says. “With our model, all of the investment dollars go to work.”
When it comes to finding financial partners, OneTen has a particular type of investor in mind.
“We prefer to have people involved who care about Buffalo and care fundamentally about the businesses we are working with. Our ideal investor has a passion for manufacturing or engineering sciences and sees the vision for what Buffalo can be” Pitts says.