An Anchorage Economic Development Corporation publication in partnership with the Alaska Journal of Commerce
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ALSO INSIDE: Q&A WITH TRAVELOCITY.COM FOUNDER TERRY JONES COLOCATION SPACES ON RISE LATEST IN CROWDFUNDING
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MESSAGE FROM THE PRESIDENT Welcome to the second edition of Alaska Innovator Magazine. We had such a positive response to the magazine last year, we decided to publish another edition this year! But we aren’t stopping there. AEDC and the Alaska Journal of Commerce will be publishing two more issues in 2014! The magazine was created to celebrate the accomplishments of Alaska entrepreneurs and innovators, and to tell the untold stories of innovation, entrepreneurship and creativity in the Last Frontier. Anchorage Economic Development Corp. was created more than 27 years ago to grow and diversify the Anchorage economy. In that time we have created a number of cutting edge initiatives that have had an impact on how business is done in Alaska. In recent years, AEDC has focused on growing and developing Alaska’s entrepreneurial community. Our effort to support entrepreneurs is one way AEDC works to grow and diversify the Anchorage economy, by helping new business grow here. This encore edition of Alaska Innovator is meant to inspire and tell the stories of entrepreneurs in Alaska who are turning their dreams into reality. Our next issue, releasing in the fall, will feature Alaskan’s that are changing the food scene. Our final issue of 2014 will release in December and will focus on the endless innovations Alaskans have made to the outdoor industry. At AEDC we also pride ourselves on being innovative. Once again, together with the Alaska Journal of Commerce, we have made the Alaska Innovator an augmented reality publication. So, grab your smartphone, download the app, “Layar,” and start scanning the pages. You will find even more content to explore jumping off the pages of the magazine! Thanks for reading the Alaska Innovator. The AEDC Board of Directors and the staff of AEDC would also like to sincerely thank the Alaska Journal of Commerce for partnering with us again on this inspiring publication!
Sincerely,
Bill Popp President & CEO, AEDC
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FROM THE MAYOR OF ANCHORAGE What an amazing time to be an innovator in Anchorage! A strong business climate and economy matched by the availability of resources for entrepreneurs makes Anchorage the ideal place to do business. In the last year our city was upgraded to a AAA bond rating, the highest rating by S&P, citing the diversification of Anchorage’s economy, its role as the center for Alaskan business and strong financial management by the Municipality. All these work together to provide great opportunity for Alaskan innovators. Our pioneering 49th State Angel Fund has created three new venture capital funds with $9.3 million available, some of which will provide sustainable access to capital exclusively for startups. Thanks to 49th State Angel Fund and its partner funds, we’re seeing exciting innovations developed right here in Anchorage, like MacKinnon Marine’s Alumaski featured in this magazine. No other city works harder to maintain a healthy and supportive business atmosphere where businesses grow and flourish. It’s just another reason Anchorage is the best place to live, work and play. Dan Sullivan
Mayor of Anchorage 632 W 6th Avenue Anchorage, AK 99501 mayor@muni.org 907-343-7100
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INSIDE WHAT’S INSIDE:
301 Arctic Slope Ave. Ste. 350 Anchorage, AK 99518 P: 907-561-4772 F: 907-563-4744 www.alaskajournal.com
Regional Vice President Lee Leschper lee.leschper@morris.com
Q&A TERRY JONES
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What’s New Shared workspace facilities, or colocation spaces, are finding their place in Anchorage. In the past 12 months at least three new “colos” have opened in Anchorage, meeting the needs of freelancers, artists and innovators by providing places to share ideas, build community and offering the tools and space to build and expand their small businesses.
Managing Editor Andrew Jensen editor@alaskajournal.com
ANCHORAGE COMMUNITY WORKS
Production Manager Maree Shogren maree.shogren@morris.com
ANCHORAGE MAKERSPACE THE BOARDROOM
Lead Graphic Designer Derek Schoenfeldt derek.schoenfeldtr@morris.com
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Financing
Cover Designer Nadya Gilmore nadya.gilmore@morris.com
KIVA ZIP MICROLOANS BRIDGE FUNDING GAP FOR INTERIOR BUSINESSES
Reporter Tim Bradner tim.bradner@alaskajournal.com
CROWDFUNDING UPDATE
Reporter Elwood Brehmer elwood.brehmer@alaskajournal.com
FUNDING THE BUSINESS LIFECYCLE
Reporter Molly Dischner molly.dischner@alaskajournal.com
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Cover Story
Advertising Director Tom Wardhaugh tom.wardhaugh@morris.com
MAKING WAVES
Advertising Coordinator Genevieve Turley genevieve.turley@morris.com
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Kidtrepreneurs
Account Executives Ken Hanni ken.hanni@morris.com Dustin Morris dustin.morris@morris.com Jada Nowling jada.nowling@morris.com
LEMONADE DAY ALASKA
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• Download “Layar” app on your smartphone or tablet. • Scan the page with your smartphone to discover videos, links and more content!
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Q&A
QA &
with Terry Jones
By Valerie Walsh, Anchorage Economic Development Corp.
AEDC Communications Director Valerie Walsh had the opportunity to talk with Terry Jones prior to the AEDC 3-Year Outlook Luncheon in July. He will be in Anchorage as the keynote speaker for the luncheon and as a judge for the Business Pitch-On-A-Train Competition.
Terry Jones founded Travelocity.com. He led the company as President and CEO for six years and took the company public.
After leaving Travelocity, Jones was a co-founder of Kayak.com and served as the company’s Chairman until it went public. It was later sold to Priceline. Previously, Jones served as Chief Information Officer at American Airlines & Sabre Inc. In his 24 years at American, Jones held various executive positions including President of Computer Services, Vice President of Applications Development and Vice President of Product Development. A graduate of Denison University in Granville, Ohio, Jones entered the travel industry in 1971 as a travel agent with Vega Travel in Chicago. He later served five years as a vice president of Travel Advisors, a company specializing in business travel to Eastern Europe and the USSR, with offices in Chicago. Jones, who wrote the book, “ON Innovation” is today managing principal of On, Inc., a consultancy he founded to help companies in their transition to the digital economy. He serves on the boards of Boingo, Smart Destinations, Rearden Commerce and Luxury Link. He is a venture capitalist with General Catalyst Partners
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and the Sierra Angels. AEDC: You founded Travelocity.com from within American Airlines. Can you share some tips to being a successful intrapreneur and what drove you to change the system from within? Terry: We really did four things that I think were important. One was to convince my boss to create a totally separate organizational structure for Travelocity. We had our own data processing people, marketing people, and finance people, and we took all of those people and put them in a separate organization. They still had a dotted line back to their old organization, but in that way it was more than just a committee. The problem was that the committee was more focused on their old departments, and these people that we had were really more focused on Travelocity itself. So a separate organizational structure was very important, especially when you’re doing something that’s controversial and difficult. The second thing we did was I moved out of the building. We wanted to get away from the American Airlines culture, the American Airlines dress code; all that stuff. So we left the building. The third thing we did was have the whole funding of this organization held at the highest level. So it was the boss who decided how much money we got. If it had been down in one of the departments, the money probably would have been taken away for something else. This way it stayed where it should have been. And the last thing was that I worked really hard to hire people from outside the company, to supplement the people from inside the company. That
was very important because I wanted a mix of cultures. At American we weren’t allowed to do that, we had to hire people from inside the company who had worked their way from the bottom. That was a big battle. But I think those four things: mixing people from the outside and inside, finding people to fund from high up, moving out of the office, and creating a separate organization were all really important. AEDC: Travelocity.com launched at the height of the dotcom boom and weathered through the dotcom bust. What was the secret to Travelocity.com surviving and thriving in those turbulent times, when so many online businesses failed? Terry: A lot of the companies that failed in the boom didn’t really run the dotcom like a business. They got a lot of money in a short period of time. They had a huge launch party, and then went off right away to try to do something with the money they had left. Everyone was caught up in this, sort of, crazy culture. They weren’t running it like a business and a lot of them weren’t business people. We came out of American Airlines which had a very strict budget culture, and a culture of ‘you had to make money.’ (My) CFO was also from American Airlines and Blue Cross, and he was overall a very conservative guy. So we were running a dotcom, but it was a dotcom with a very conservative
Intrapreneur – n.
A manager within a company who promotes innovative product development and marketing.
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Photo/Courtesy/Leading Authorities Inc.
otes keting.
business-oriented plan that of course was being reviewed by the top executives from American Airlines. So I think by doing those things I mentioned before, moving out of the building, creating the culture, and hiring from the outside, I think we got all the good parts of a dotcom, but we also retained the good business ethic that we had about how to build a business. And in fact, it was kind of funny, we were profitable, and Wall Street didn’t even care. They just said ‘you have to get more eyeballs.’ All they cared about was eyeballs, it was kind of crazy. So we were lucky to have that good mix and solid business world and business performance along with good product and a good market. A lot of people didn’t think travel would go anywhere. We played to a lot of empty rooms and analysts that were saying travel wouldn’t go anywhere and now it’s massive. So I think we were in the right headspace, had the right team, and we executed it with solid business principals. AEDC: After a successful career with American Airlines, the launch of Travelocity.com and co-founding Kayak.com, you have made the transition to financing startups as a member of both a venture capital firm and an angel investment firm. What do you look for when choosing to finance a startup? Do you have advice for any startups that are seeking financing? Terry: Kayak was part of a Venture Capital firm and Travelocity started as part of American Airlines. I am part of an angel investing group, myself. Angels are a great way to start for a small company who just needs to start somewhere. Many people can just start with credit cards, you know two guys and a dog could start a business, and angel groups in particular can be very helpful. With the one I’m in for example, we spend a lot of time with the people, we assign mentors to them, and if the business is local — we are pretty involved. You can get a lot of help from the angel and it may be today, that an angel is all you need. If all you need is an angel, and a few hundred thousand dollars, or less than a million dollars to get your business to where you need to go, that’s great, because you’re not going to give up as much
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of your business to the investor, therefore you end up with more, longer term. I had a company from Canada that came down here and said, ‘well we can get money from the bank or VCs, what can we do?’ We told them to get it from the bank because it’s a loan and when it’s done, you’ll own your company. You won’t have to sell your company to make money. On the other hand VCs are really smart on part of a venture capital fund. If you need serious money, then I think having a good VC with a great track record can really help you. There’s a lot to be seized, and you can get the outcome with money, but what you really want is money and expertise. You want the expertise to help you hire, to help teach you the things that they’ve learned through losing so much money, because most of their investors fail, and they know an awful lot. So you really want to get somebody who can be helpful. I think that was a key to kayak.com, we had some great investors and a great board who helped guide the company and that’s what you need. And particularly if you need to raise a lot of money, like if you’re doing a consumer product, where it’s going to take $50 million or a large amount of money to help build your market, you’re gonna need big VCs and they could be very useful. If you don’t need that amount of money, then you know, get some angels to help you, but you need to try to get people who are not just passive investors. Try to get people who have done this before, who can guide you, and who can help you build your form and help you with various skills that you need. You want more than their money, especially if you haven’t done this before. It’s hard and you really want to get some help. If you’re lucky enough and you can get the help from just friends and family, and that’s all you need, go out and get some mentors to help you, get the people who’ve done it before. No matter how smart you are, it’s always good to make new mistakes, and not to make the ones that other people could help you not to make. AEDC: In your book you talked about how important it is to encourage innovators in the workplace. Do you have an ex10
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pansion on that, specifically what managers can do to help encourage innovation? Terry: I think that’s really what the book is about. Integration stands on two pillars, culture and team. The most important thing for managers to do is to build the right culture. To build a culture of where an idea can be heard and where you’re open to new things. Way too often in companies, where one thing gets going, they are afraid to take any kind of a risk. But if you’re going to try something new you’re going to need to take a risk. It’s the same idea as ‘I’ve never failed; I’ve just found 10,000 things that didn’t work.’ If you try new things, not everything is going to work, and in this culture, managers punish people who fail. Instead of killing the project they kill the person. That just can’t happen. So I think it’s up to management to change that culture and encourage people to innovate and understand that some of these projects don’t work. Now, you don’t want to bet your whole company on it, but there are ways to do it. You can certainly build prototypes, you can use 3D printers to show things to people, you can build working models; there are all kinds of ways that you can check. You don’t have to build your whole factory and spend millions of dollars before you find out if something’s going to work. Some of it won’t. So I think No. 1 is that. No. 2 is building a key relationship with people who really want to innovate, who want change, and who will challenge the status quo. That’s why I’m a big fan of bringing in people from the outside, bringing in people who aren’t like you, and bringing in people who will push you. Older people should bring in young people who have new ideas and who are going to shock you with their thinking. Half your customers are half your age, or even more than half, and you have to know what they’re thinking. I think it’s about being open to change and allowing some risk and failure. Valerie Walsh is the Communications Director for Anchorage Economic Development Corp. and can be reached at vwalsh@aedcweb.com.
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ANCHORAGE COMMUNITY WORKS 349 E. Ship Creek Ave. | Anchorage, AK 99501 anchoragecommunityworks.com
Anchorage Community Works co-founder Brooklyn Baggett, seen before an open mic night, thinks the space could support about twice the current 20 to 25 members.
MAKING ART WORK FOR ANCHORAGE By Molly Dischner
Alaska Journal of Commerce Nestled in Ship Creek, the nonprofit Anchorage Community Works inhabits a warehouse-turned-art-studio. Art endeavors range from screen printing and leather-making to dreaming up performance collaborations between visual artists and musicians and building bikes made out of old parts. “They end up looking like ‘Mad Max’ style,” said founder Brooklyn Baggett, referring to the movie by that name featuring lawless biker gangs. One of the newest members is organizing spoken word events, expanding the studio’s reach even further, she said. There are also concerts — some all ages, some for the 21 and older crowd — and conferences. When Baggett and her three other cofounders started the space, they wanted 12
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a place where Anchorage residents could make art and collaborate without needing to find storage space or money for equipment.
“Physical pieces of equipment that will help people make art are big and expensive,” she said. Each brought different passions, and
What is it?
Date opened:
Anchorage Community Works provide coworking space and equipment for artists, and serves as a venue for performance art pieces, concerts and other events.
August 2013
Founders:
Brooklyn Baggett, Cody Augdahl, Craig Updegrove.
Financing ACW raised $15,000 in a 30-day Kickstarter campaign. The founders used their own money for the rest of the renovations. The Kickstarter campaign helped determine that there was enough community interest to support the facility, and the private funding was used when renovations cost more than anticipated.
Capacity:
5,000+ square feet. 15-20 people can work comfortably at one time; 140 can attend a concert or major event.
Perks:
Members have access to the art studio from from 8 a.m. to 11 p.m. (as of July), including work spaces, screen printing equipment, etching, letter and printing presses, sewing machines, some shared supplies including paint and paper, a workbench with tools, a breakroom and other spaces in the facility. ACW also coordinates member events about once a month.
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What’s New
Photo Left/Michael Dinneen/Michael Dinneen Photography, Photos Right/ Molly Dischner/Alaska Journal of Commerce
tools, to the endeavor. Baggett was particularly excited about having another venue in Anchorage for all-ages events. “I really enjoy being able to do the events and have music,” she said. The founders and a core group of members turned the warehouse into an art space and venue in 2013, bit by bit. “We had to tear down a staircase and rebuild a staircase, and we had to build two bathrooms,” Baggett said. Although Baggett said they have some ideas about future renovations or even growth from the current space (windows top the wish list), for now the focus has switched from the facility to the people. ACW currently has about 20 to 25 members, but Baggett said she thinks it
Jane Rabadi uses the Anchorage Community Works space to create wearable art such as T-shirts.
could support about 40 to 50, and still ensure that everyone had access to the space and tools when they wanted it. “I want to build those numbers so I can find where that balance happens,” she said. Once the community grows to that size, other work and plans will be feasible, she said. So far, the project has been supported by the group’s 2013 Kickstarter, personal donations and now, the memberships. Eventually, Baggett said they may go after some grants. But to start, they wanted to make sure the effort could support itself. “Our goal at the start was to see how self-sustaining we can be without relying on grants,” she said.
There’s another side to the push for more members, too. More artists means more collaboration — the other idea underlying the new building. “If you’re around other people creating art, hopefully that inspires you,” Baggett said. Jane Rabadi, a member, said the space has helped fill a need in Anchorage for ways and means for artists to channel their energy, “by way of providing a space for individuals and groups to create, present, collaborate, learn, and connect the potential increases for those art pieces, performances, and ideas to become a part of Anchorage and reach other parts of the state and Outside.”
FEATURED USER
Creating wearable art
Jane Rabadi is a professional designer and artist, with a focus on screen printing and a hybrid form of communication loosely based on semiotics.
What have you been working on in the studio?
I tend to focus on typography, specifically the Arabic script, and symbols with the aim of providing individual and cultural connections. We all live under the constructed illusion that we are more connected, when in reality we have become so utterly disconnected and out of touch with one another and ourselves. I am designing wearable art, specifically t-shirts right now, that creates conversations between people who are often times strangers.
How did you get involved in Anchorage Community Works?
I had been screen printing off and on for a few years when, about a year ago, (founder) Craig Updegrove approached me about joining ACW. The timing was perfect because I wanted to dig deeper into the process of printing to develop my technique, gain intuitive knowledge about its many nuances, and create more work. The missing piece for me was access to equipment, which limited my practice and made me dependent on help from others who are equally busy. ACW is a place where I gain knowledge from the printers with more experience, a place to share my ideas with other artists for feedback if I so choose, and provides me with equipment at a very affordable cost.— Molly Dischner
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ANCHORAGE MAKERSPACE 1406 West 33rd St Anchorage, AK 99503 anchoragemakerspace.com
Standing from left, are Anchorage MakerSpace founders Dale Rooney and Andreas Tziolas. From left in the foreground are users Amanda Hanley, Clynce Carrillo, Dustin Mendoza and Kendra Todd.
MAKER MOVEMENT EMERGES IN ANCHORAGE By Elwood Brehmer
Alaska Journal of Commerce Looking for a place to practice woodworking, space to teach a craft class, or how about somewhere to flesh out a new product idea? A little shop tucked behind the Taproot pub in Midtown Anchorage might just fit your bill. Opened in January, the Anchorage MakerSpace is a kaleidoscope of tools, electronics and knowledge. “We exist to provide a space for people to pursue their interest in a way that is unrestricted, so that you can explore anything you want without a timetable, without constraints,” MakerSpace President Andreas Tziolas said. The MakerSpace is essentially a member-driven nonprofit. With a membership comes unlimited access to welders, power tools, computers and even a 3-D printer. It’s a tinkerer’s garage 14
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on steroids. The maker movement came out of the open education movement of the 1980s, Tziolas said. What started as a way for working individuals to continue their education in a nontraditional fashion by extending a year’s curriculum over two or three years through night classes, for example. A makerspace is simply a means by which someone can be a student one
What is it?
A subscription-based, membership organization offering makers classroom, study and fabrication space with access to common use tools and equipment.
Financing Founder financed
Date opened: January 2014
minute and a teacher the next. As Tziolas put it, one can be innovative and capable but without the tools the goal can be impossible to reach. The MakerSpace is an Internet of sorts filled with “tools for discovery,” he said. “There’s so much to be said about theory and learning something from a book, but what happens when you try to do something more constructive, that’s more creative, that requires some
Capacity: 1,360 square feet, with plans to expand.
Target Clients:
Inventors, tinkerers and teachers.
Perks:
Unlimited access to metalworking tools (welder, bandsaw), computers, 3D printers, power tools, woodworking tools, automotive tools, classes and training.
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What’s New fabrication?” Tziolas said. Nearly all of those tools are member donations, he said, except for one air compressor with an unknown origin. “It was just sitting outside the door one morning and nobody took credit for it,” Tziolas remembered. A $100 general monthly membership provides access to nearly every square foot of the 20-foot by 68-foot shop and everything in it. Student memberships are half that. Each general member gets a section of shelf space for materials or projects they don’t want to take home. Members who want to use the space to teach a class turn half of their fees over to the MakerSpace, whether it’s $5 or $50 per person, Tziolas said, a way to keep the structure simple. Nonmembers can hold tutorials there as well, however a $50 per use surcharge is added to the 50/50 split to encourage membership. The MakerSpace has about 30 members. That membership is always in a minor state of flux because it is only a
Photos/Michael Dinneen/Michael Dinneen Photography
FEATURED USER
month-to-month commitment. Individuals who want to sign up for the winter months and put their shop time on hold for the summer can join again when the sun gets scarce. “When we get a nice day in Alaska we need to take advantage of it,” Tziolas said. Access to the tools is only part of the benefit of the Anchorage MakerSpace, or any makerspace, for that matter. The members are “remarkable individuals,” he said, willing to share their given expertise with anyone willing to learn. A couch, a few chairs and a kitchenette in the back of the shop offer a place to discuss fabrication ideas, tools, or just last night’s hockey game. “Show and tell is a big part of what the MakerSpace is,” Tziolas said. “We weren’t waiting for the MakerSpace to dawn upon us to start doing stuff. People have really cool garages. Some garages might have better tools than what we have, but that’s only half of it;
I, Robot As a founding member, Dustin Mendoza has made the MakerSpace his own. Mendoza is a robotics guru and was a member of the Dimond High School team before heading to college. Now he is a part of the University of Alaska Anchorage robotics team and is a mentor to his old high school group. He uses the MakerSpace as a practice facility for his high school whiz kids. In April, they placed 30th out of 86 teams at the VEX Robotics World Championship in Anaheim, Calif. “It’s the first time the team ever went to the big world’s competition, so they learned a lot and they’re going come back with a vengeance next year,” Mendoza predicted. For Mendoza, the MakerSpace is almost a necessity. Before January, he was simply running out of room for his passion. “I kind of piggybacked off my previous robotics coaches. I went to East High School, but I was into robotics at Dimond High School, so I’m pretty good friends with the Dimond teacher, so I would mentor there, but I also have a closet of electrical components. After a while I was like, ‘I can’t just do this in my bedroom. I need a place to sleep.’ It came to the point where I needed a place to go.” — Elwood Brehmer
the other half is the community.” Tziolas said he hopes to at least double the current 1,360 square feet of shop space in the near future. The people of Anchorage fit the maker space idea and as the concept grows, so will the space, according to Tziolas. All one needs to do is walk through a neighborhood in the city on a sunny summer day and listen to the activity, he said — hammers, saws, and motors — the sounds of creativity. When the weather isn’t conducive to working outside the MakerSpace offers a place to “flex the creative muscle,” he said. “People know what to do with a makerspace in Anchorage. We’re very hearty and creative as Alaskans,” Tziolas surmised. “We wrestle and we fight with the elements throughout the year, and that means that you have to come up with some pretty ingenious ways just to live in Alaska.”
MakerSpace founding member and robotics enthusiast Dustin Mendoza coaches Kendra Todd.
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THE BOARDROOM 601 W 5th Avenue, Floor 2 Anchorage, AK 99501 theboardroomak.com
From left, The Boardroom founders Katherine Jernstrom and Brit Szymoniak.
THE BOARDROOM GETS DOWN TO BUSINESS By Tim Bradner
Alaska Journal of Commerce Walking into The Boardroom on Anchorage’s downtown 5th Avenue, you’re immediately struck with light and space, big windows, big tables and an environment that encourages people to talk with each other and share ideas, if they choose. Katherine Jernstrom and Brit Szymoniak opened The Boardroom last November as Alaska’s first open “work-share” space for independent professionals, freelancers and the self-employed who are tired of home offices and crave a little human contact. Then there’s the free beer on Wednesday afternoons and yoga classes Thursday mornings, and free wi-fi, Kaladi coffee and office supplies. Szymoniak said, “our biggest amenity is our community with a work environ16
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ment that encourages people to network. We like to think of ourselves as curators of cool businesses.” The downtown location and proximity to restaurants, all easily walkable, is an attraction. Members of The Boardroom include a variety of professionals representing various fields as well as attorneys. The common link is that they are freelancers who need an affordable, quality work location and like having company.
What is it?
Szymoniak knows what it’s like. “I worked from a home office for several years and I finally just got lonely,” she said. Others shared that feeling, and it helped inspire The Boardroom. The Boardroom offers several different membership levels that range from day passes to monthly membership. Members can pay to have a private office or to simply use the open work area. The Boardroom also has a large and small
Founders:
A work-share space, support for freelancers and independent workers
Katherine Jernstrom and Brit Szymoniak
Financing
Shared and private office space, conference rooms, ergonomic chairs and glass desks, copy/print/scan/fax machine, endless Kaladi Brothers Coffee, free craft beers once a week, high-speed internet, yoga classes, workshops, training and social/professional meetups.
Private investments
Date opened: November 2013
Perks:
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What’s New conference room available to members. Hours are 8 a.m. to 6 p.m. Monday through Friday. Jernstrom and Szymoniak had worked together with various nonprofits and developed the idea for their business with help from the Alaska Small Business Development Center. Advisors from the SBDC still offer help. Work-share spaces like The Boardroom are common in Seattle, Portland and most major cities, and it was only a matter of time until Anchorage got one. Jernstrom and Szymoniak are now considering a satellite Boardroom in Anchorage’s midtown for members who live in south Anchorage, or Girdwood, and who might prefer that location. They are also expanding their business through development of a six-week training program for entrepreneurs using
The Boardroom facilities and taught by local business leaders and in partnership with the Ewing Marion Kauffman Foundation. The first class of 11 graduates June 30. The Kauffman Foundation is a Kansas City-based nonprofit specializing in encouraging business education and entrepreneurship. Members have voiced their enthusiasm for The Boardroom concept. “This space gives me a sense of community,” said Natalie Osborne, an independent web developer. “I love the interaction and the bonding with other creative people, and it’s also nice to have people around you who don’t do what you do. “I could be just as productive in my coding work working at home but I’m just a lot happier here.”
Osborne also said she has been able to double her business since being at The Boardroom. She can’t trace a direct link to it but she knows working in a happy space has something to do with it. Attorney Gavin Kentch looks at it in other ways. The Boardroom has enabled him to have the advantages, even necessities for the legal profession, of working downtown and with access to the courts and the law library, but without the overhead. “The Fifth Avenue address helps, too,” he says. “This has given me a low-cost way to build by law practice. I do a mix of general criminal defense and civil litigation, and having a low overhead allows me to go more pro bono work and have a much more interesting, diverse law practice.”
Photos/Michael Dinneen/Michael Dinneen Photography
Telecom consultant Craig Zematis said he gets the value of his membership in the free beer on Wednesdays at The Boardroom.
FEATURED USER
Making the most of membership Craig Zematis is an independent telecom consultant who has signed up to use space at The Boardroom. “I get the value of my membership just in the beer,” said Zematis. Zematis is a veteran at “off-site” working.
“I’ve worked at home and done my share of coffee shop-hopping, so I know what works,” for independent professionals, he said. Working in a home office is doable for him, “but sometimes I just like a change of wallpaper,” he said. “The chance to socialize is good, too. I’m a social person.” — Tim Bradner
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Financing The St. Pierre family of Goosefoot Farm in Fairbanks.
By Jack Zayon Fairbanks Economic Development Corp.
Entrepreneurs are a critical part of economic development. Entrepreneurs create new businesses which in turn create new jobs, wealth, a tax base and they also bring vibrancy and growth to communities and regions. However, taking an idea and turning it into a profitable business can be a real challenge and one of those barriers is having the ability to access adequate capital. This is where the Fairbanks Economic Development Corporation, or FEDC, comes in and helps with the Kiva Zip micro-loan program. Kiva Zip is a small, pilot project, launched by zip.kiva.org and operates in the U.S. and Kenya. It works to drive 18
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innovations in person-to-person lending globally, via the internet through crowdfunding. FEDC began serving as a trustee organization to Kiva Zip in 2013. We look for borrowers with strong character where we can be confident in the borrower’s commitment to repay the loan. We like to see that the borrower has some business skills and we work with them to understand their business plan so we can have the assurance needed in its viability. Kiva Zip loans do not require collateral or credit scores; however, trustees help make the judgment and in the end vouch for the borrower. Kiva Zip loans are 0 percent interest loans for small businesses and entrepreneurs who are financially excluded and underserved, and the borrower’s annual income is less than $100,000. That’s
not a typo — Kiva Zip loans have a 0 percent interest. The size of a borrowers’ first loan is generally capped at $5,000, but subsequent loans can be larger and these loans have a payback period of 12 to 24 months depending on the loan. Agricultural loans on the other hand have a higher beginning loan maximum of $10,000, still at 0 percent interest, with a 36-month payback period and an allowable six-month grace period. Kiva Zip’s crowdfunding is fundraising for a loan balance by individual lenders on the Kiva Zip website. A borrower’s Kiva Zip profile connects the entrepreneur with multiple “lenders” from any part of the world who can loan as little as $5 and can easily do so directly through the Kiva Zip website. This enables anyone with Internet access to assist an entre-
Photo/Courtesy/Fairbanks Economic Development Corp.
KIVA ZIP MICROLOANS BRIDGE FUNDING GAP FOR INTERIOR BUSINESSES
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CROWDFUNDING KEEPS GROWING ACROSS US, ALASKA By Jon Bittner
Photo/Courtesy/Fairbanks Economic Development Corp.
Crowdfunding is a relatively new form of early stage financing that can be used to fund anything from art projects and community development initiatives to early stage startups and tech ventures. Crowdfunding is defined as: “the practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the internet.” Crowdfunding has been around in one form or another for hundreds of years. For example, when the American Committee for the Statue of Liberty ran out of funds to build the statue’s pedestal in in 1884, newspaper magnate Joseph Pulitzer wrote an op-ed urging the American public to donate the necessary funds to complete the project. In less than six months over 125,000 people had donated over $100,000 to the cause, mostly in increments of a dollar or less. preneur or an innovative idea that the “lender” believes in. Unlike many other crowdfunding sites, this is a loan not a donation. This means that the lender gets their money back as the borrower pays back the loan. FEDC’s first loan was with was with Sunflower Borealis owned by Lacey Smith Ulloa. They are a local farm that also produces value-added cottage foods and goods. They were a referral to us by Russell Talvi, Fairbanks Director of the Alaska Small Business Development Center. When asked about the benefit of the loan, Smith Ulloa, stated, “It allowed me to purchase irrigation equipment for growing our vegetables, seed purchases, equipment and our startup costs. The loan got off to a slow start, then all of the sudden within a few days it went really fast and we got funded.” Currently, FEDC has recently endorsed another local farm company called
Traditionally, the early forms of crowdfunding were limited by your ability to get your message to large number of people. No easy task in the pre-digital age. With the invention of the internet, that all changed. Now anyone with a computer and a modem can reach out and potentially get their message to the entire world. It wasn’t long until online crowdfunding was launched to take advantage of that new reach. In 2008, the global economic downturn resulted in funding for the arts drying up as companies and governments tightened their belts and cut what they considered “non-essential” programs. Artists, long accustomed to finding non-traditional sources of funding, quickly realized that while large sums of money were harder to find, smaller amounts from a larger number of people were still available. So IndieGoGo and Kickstarter were launched to save art funding in the U.S. In their first few years of operation the two
sites raised tens of millions of dollars for art projects across the country. This art funding success culminated in 2012, when Kickstarter.com alone raised more funding for the arts ($323.6 million) than the National Endowment for the Arts ($146 million) As the economic downturn continued into 2010, startup funding began to be affected as well and enterprising entrepreneurs realized that what was working so well for the art community would also work for certain types of startups and manufacturing products. The business-based crowdfunding frenzy reached a fever pitch in 2012, when the Pebble Watch concept raised $10.2 million dollars on Kickstarter from 70,000 backers, becoming the highest funded crowdfunding project in history. That frantic activity has continued to this day, with Kickstarter recently an-
Goosefoot Farm for $10,000, with a threeyear term at 0 percent interest with an additional six-month grace period. In talking with Brad St. Pierre, one of the three owners and co-founders, he stated, ”It has given us a spark of hope that this thing is going to actually happen. Interestingly this last year when we sat down with our lawyer, we realized that we really needed an additional $10,000 so when we heard about this loan program we knew it must have been meant to be.” Goosefoot Farm recently reached their $10,000 goal and they had 507 lenders from all over the world. These loans are real helpful in a number of ways. “It’s a killer statistic: 7 out of 10 small businesses that apply for a bank loan in the United States get rejected,” said Premal Shah, Kiva president. “Just connect the dots of what could happen if we could say ‘yes’ more often to people used
to hearing ‘no.’” First, they are 0 percent interest, which in turn gives companies more capital to scale up. When they can scale up, these loans can be seen as bridging. They help get the companies up on step and to a place where they can gain small successes that can be built on and then scale up with a bank if they so choose. When you contribute to companies that are on Kiva Zip, you are helping support this new approach to crowdfunding and helping invest in companies that provide jobs, products and services, and helping entrepreneurs realize their dreams of owning and running their own business.
See CROWDFUNDING, Page 27
Jack Zayon was born and raised in Fairbanks and is business development project manager at FEDC. He received his BBA from the University of Alaska and his master’s in business administration, with an emphasis in entrepreneurship, from Alaska Pacific University.
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Financing
FINDING THE RIGHT FUNDING FOR YOUR BUSINESS By Jon Bittner Much like people, every business has a distinct lifecycle. From the early days when the future is wide open, to the later years when things are more stable and the goals are more defined, businesses change over time and their needs and options change with them. While there are a wide variety of businesses out there with different nuances and profiles, most of them share some fundamental traits that any entrepreneur needs to recognize, especially when it comes to finding funding. Investigation/Seed Stage (Financing options: Self, Friends and Family, some Government) All businesses start as an idea. Whether it’s a flash of insight in the shower or the result of a well-planned determined effort, at some point any business you can think of started as nothing more than a wild idea and a whole lot of optimism. Everyone has had an idea that they were convinced would make a great business, but unless those ideas are combined with a passion for the project, a healthy dose of optimism, a diverse set of skills and some seed money, there’s not much chance of that idea ever getting farther than the imagination. Financing options at this stage are severely limited. Typically, this is the self-funded stage of any business. Once the entrepreneur has done their homework and decided that the idea does indeed have potential, they’re ready to move on to the next stage. Development/Early (Financing Options: Friends and Family, Angel, some bank) At this stage your business exists as a legal entity, your product or service is in the production-ready stage and, hopefully, you have your first customers. The key at this stage is to manage your money as carefully as possible and, if 20
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financing is necessary, to make sure you onboard new investors wisely with an eye towards future funding rounds. At this point, your financing options are fairly limited. Banks are usually not an option as they rely heavily on a company’s historical financial data to determine their creditworthiness. More likely options are going to be self-financing, friends and family, early stage angel funds and angel investors. Because of the high risk of failure for businesses at this stage (25 percent of startups will fold within the first five years), be prepared to give up a larger share of your equity than you would at a later stage. Growth (Financing Options: Angel Funds, Banks, Grants/Government Programs, Partnerships) Your company has made it through the early years and is steadily growing its customer base. In order to maintain the level of functionality that you started with, you may need to onboard new
employees or contractors, expand your sales area, or build out your equipment infrastructure. At this point, your financing options and your bargaining position have improved. You should have multiyear financial data that could lead to a bank loan, or an existing company valuation with data driven sales projections that you can use to better negotiate the value of an equity stake in your company to investors. There also might be government loan or grant programs that your company can take advantage of. Established Stage (Financing Options: Banks, Investors, Partnerships and Grants) You’ve gone through the early years of seed and start-up, survived the growing pains of the growth stage and now your company is all grown up! You have an established customer base with a distinct market share, your company is running smoothly with tried and true procedures in place and sales exhibit
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slow but steady growth. The focus now is on optimization, efficiency, and making sure the staff and management are making the transition from the wild early days to the more steady and methodical pace of the established business. Financing options are pretty wide open depending on your financial position. Mature Stage (Financing Options: Banks, Investors) This is another risky stage of any businesses life cycle. Sales and profits have stabilized or started to decline, internal inertia may have taken hold and corporate culture tends to limit creative or innovative ideas. This is where the CEO needs to decide if it’s time to try to begin growing again, or if it’s time to position the company for the Exit Stage. Financing options at this point are determined by the financial reality of the business, how early the CEO identifies the stagnation and the direction the CEO decides to move the company into. Banks remain an option as do investors. Partnerships can also be possible, but again the terms the company is able to negotiate on any of these options is wholly dependent on the position it is in when the negotiations occur. Exit Stage (Financing Options: Investors, Other Companies, Entrepreneur) This is the stage at which you either sell the company or close it down. The key to this is, of course, the company’s valuation. The important thing to note is that the valuation isn’t going to take into account all of the hard work, blood, sweat and tears you put into getting the company where it is today. It only measures what the company is currently worth, and that amount is really whatever you can get someone to pay you for it. Consulting with a business valuation expert, working out solid buy-sell agreements and drafting business transitions plans are key to the successful exit. Possible sources of exit financing are M&A funds, investment funds, other corporations, entrepreneurs, your employees or your competitors. As with any aspect See FINDING FUNDING, Page 27
LATEST HACKATHON BIGGEST YET IN ALASKA By Alicia Busick The latest Alaska Hackathon was held May 17-18 in Anchorage at The Boardroom. Around 40 local programmers, developers, coders and designers came together for a weekend to create new web and mobile apps, and solutions to simplifying data. Alicia Busick was a member of the 2014 Alaska Hackathon planning committee. On May 8, 2014, ideas were pitched as projects for an upcoming Alaska Hackathon. The list of project ideas submitted to the Alaska Hackathon was the longest yet, and pitches continued to flow in, even after the Pitch Night. From the pitches, Hackathon participants formed groups based on projects they were interested in. One very interesting project came from a group at the Hackathon with a strong presence, the AK Video Game Group. They brought in the virtual reality headset for 3D gaming, Oculus Rift. Over the weekend the group was able to develop and demonstrate a project that separated the audio and video from the headset — thus requiring a team of gamers to collaborate to defuse a virtual bomb. When they weren’t diffusing virtual bombs, they shared a demo on the Oculus Rift of a roller coaster ride — it was a hit among the participants! A local developer representing an outside organization, The Center for Election Science, requested help developing a better approval rating poll. A great example of civic development at the Alaska Hackathon was coders and biologists from the Alaska Department of Fish & Game worked together to create the Dipnet App — an app to track the best times to go dipnetting. Another group worked on a mapping system to view hunting and fishing regulations to assist sportsmen and women to avoid getting a citation.
Alaska is currently seeing a strong growth with tech needs and it is such an honor to be able to help the community needs with local volunteer developers. Novice coders are seeing a great opportunity to collaborate with mentors and reach out to a wonderful growing technology resource. Multiple groups cross collaborated as some attendees had multiple programming knowledge or resources to assist. The Hackathon also created the very first Google Developer Group in Alaska. The group hopes to continue to offer developer support and resources for Anchorage and Alaska. This event is continuing to grow in attendees, sponsors & reach! We are very excited to see the possibilities from all the projects as well as developers that participate. Learn more about the Alaska Hackathon at www.AlaskaHackathon.org. Alicia Busick is owner/artist of MandyLion Graphics. She can be reached at MandyLionGraphics@gmail.com.
Thank you to all the Alaska Hackathon Sponsors! Alaska Small Business Development Center Sockeye Business Solutions Arby’s PangoMedia Brute Technologies MandyLion Graphics The Chariot Group ABR inc. Anchorage Economic Development Corp. Connect Alaska Anchorage Programming Workshop Resource Data Inc. Beacon Media+Marketing
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AlumnaSki inventor Brian McKinnon at the 20-mile River near Portage.
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Cover Story
MAKING WAVES McKinnon invents ATV for the water
By Elwood Brehmer
Alaska Journal of Commerce
B
Photos/Michael Dinneen/Michael Dinneen Photography
rian McKinnon’s “accidental business” is about to intentionally explode.
His company, MacKinnon Marine LLC (spelling explanation to come), released the AlumaSki in early July, the only durable aluminum personal watercraft on the market. The AlumaSki is a sealed and unsinkable riverboat hull with the draft of an airboat shrunk down to have the speed, handling and fuel efficiency of a jet ski. At less than 14 feet and with seats for three people, the AlumaSki looks little different than other personal watercraft made for warmer climates. However, it’s the bottom of the AlumaSki, and what it’s made of, that makes the difference. As McKinnon put it, the rocks littering Alaska rivers and the fiberglass hulls of traditional personal watercraft “don’t mix.” “This is a hull that is a completely different design that aids a market
that’s never been touched,” he said. “We turned a riverboat into a personal watercraft.” If early feedback is any indicator it won’t be long before everyone on the water in Alaska wants one. “Almost every response company we’ve talked to has said they have to have them,” he said. Recently, McKinnon — more accurately the AlumaSki — was hired for camp scout and responder duty supporting remote survey work out of Talkeetna. It drew a rousing reaction. “On that job everybody that was there, the surveyors, the engineers, the geologists, was just freaking out about it,” he said. The AlumaSki is the first “boat” to go up Dragon’s Tooth rapids on Eagle River, McKinnon said, and he claims to hold an unofficial world record for going upriver Six Mile Creek near Hope — typically a whitewater rafting route. “The investors don’t want me doing any more stunts, so if I do you’ll see me wearing a wig,” he joked. The genesis of the aluminum personal watercraft came from his father, who talked about building one when McKinnon was a youngster. He said the idea to follow through on his father’s brain-
storming percolated in the back of his mind for years. In November 2011, McKinnon decided he had compiled the tools and savings it would take to build a jet ski from scratch. After getting an aluminum welding tutorial from his friend and business partner Harry Leffler, away he went. It took about a month to get the hull shape he wanted, McKinnon said. From there, he built from the bottom up — old school. “It was just kind of in my head. The only drawing I did was of the bottom,” he said. “I built it with strings and balsa wood sticks to get the shape of everything — figured out if I liked it or if I didn’t. By early February the next year it was time for the first AlumaSki to hit the water. The only ice-free water near Anchorage was in Whittier. “It was like six degrees,” Leffler said. It performed flawlessly. All told, McKinnon put about $35,000 and untold sweat equity into the first AlumaSki, he said. When he couldn’t pull it down the road without being interrupted, McKinnon knew almost immediately that he was on to something.
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Brian McKinnon said he knew he was on to something when firefighters and troopers would pull him over to take a look at the AlumnaSki.
“Every time I went to the gas station with it people were crowded around it and people were chasing us down,” he said. “I got pulled over by troopers and firefighters who wanted to see it.” At the time, the now 30-year-old McKinnon was working hard on his fueling system company Aknuna Technologies, but the opportunity the AlumaSki presented couldn’t be passed up. As for the extra “a” in his company’s name, McKinnon said it’s a nod to his ancestors’ surname, MacKinnon. The U.S. Navy misspelled his grandfather’s name when he enlisted in the construction brigade known as the Seabees. Once “McKinnon” was printed on his ID and paperwork, the name stuck, he said. Brian is one of the last people in his family not to change his name back. “I have the paperwork; I just haven’t gotten to it yet,” he said.
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After struggling to organize and find investors while fending off a local boat builder hired to refine the AlumaSki who ended up trying to steal the idea, McKinnon turned to Al Hermann, a professor of entrepreneurship at the University of Alaska Anchorage to right MacKinnon Marine ship. Hermann also founded the Alaska Accelerator Fund, which focuses on investing in early-stage startup companies. The Accelerator Fund connects private investors with the Municipality of Anchorage’s 49th State Angel Fund. If the marriage is right, the Angel Fund then matches the private investment for startups. McKinnon approached him with ideas for Aknuna and MacKinnon Marine, Hermann said. Because both were too good to dismiss, the pair developed business plans for both.
Those plans fared well at the 2013 Alaska Business Plan Competition. Aknuna took first and MacKinnon Marine landed third. Hermann describes McKinnon as having an “inventor’s mind.” “Brian has got the ideas and the know-how and he’s a very coachable young man who knows what he knows and knows what he doesn’t know,” he said. “He’s asked for the right kind of help and there’s a lot of people out there who want to see him succeed.” The biggest challenge was tempering McKinnon’s enthusiasm and helping him accept that properly building a business takes time, Hermann said. McKinnon said Hermann has been his acting CEO and chief financial officer through the whole process. “He’s like a god in my world,” McKinnon said of Hermann. “He’s the first guy
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Cover Story that really stepped up and said, ‘OK, I’m gong to help walk you through this.’” With help from some of Hermann’s cohorts, such as Ky Holland, an assistant business professor at Alaska Pacific University, the mentor and protégé secured $200,000 to get the first AlumaSkis to market. In June, McKinnon received engines and jet pumps for 17 AlumaSkis from personal watercraft and outboard motor goliath Yamaha. The AlumaSki hulls are being fabricated in Palmer, McKinnon said. From there, they head down the Glenn Highway to be assembled and sold at Marita Sea and Ski in Anchorage, where they call the craft an “aquatic ATV,” general manager Tracey Harmon said. McKinnon went to the shop looking for someone to sell his creation and left with an investor, he said. Harmon said his first impression of the AlumaSki was similar to that of most folks.
“We saw the possibility of a product that could really do well in Alaska,” he said. In addition to having a product that every hunter, angler and general motor head in Alaska will want, Harmon said McKinnon’s passion and drive for the project helped assure him he was making a sound investment. “In short, I don’t think he’s going to quit on me,” Harmon said. At $24,995, the AlumaSki is about double the price of most personal watercraft but less than many large riverboats, and its do-all practicality should override any sticker apprehension, McKinnon and Harmon said. Now that he has a reliable team of six in place, the next step is to take the AlumaSki nationwide while keeping roots in Alaska, McKinnon said. He has a West Coast marketing trip planned to drum up interest and begin looking at locations to manufacture a Lower 48
AlumaSki. Soon, he also plans to revisit Aknuna, on hold since the AlumaSki took over his life. With production contracts waiting there, the Aknuna fire is ready to be stoked, McKinnon said. He emphasized that the AlumaSkis meant for Alaska will all be built in state, and MacKinnon Marine’s headquarters will stay put as well. His refusal to relocate south turned away some early prospective investors, McKinnon said. “Every good idea that comes from Alaska leaves Alaska and that’s not something I’m going to do,” he said. “I want the money here. I want the jobs here. I want Alaska to get credit for this.” Elwood Brehmer can be reached at elwood.brehmer@alaskajournal.com.
The AlumnaSki can seat three and will retail for $24,995.
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Lemonade Day
LEMONADE DAY ALASKA TURNS ANCHORAGE YOUTH INTO ENTREPRENEURS
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Blueberry Lemonade Ingredients For the Simple Syrup: • 2 cups water • 1 cup sugar
For the Blueberry Puree:
lemon juice, 2 cups cold water, ice, and lemon slices/fresh blueberries, if using. Stir in the blueberry puree and the simple syrup until well combined. Taste for sweetness and add more cold water if needed. Refrigerate to chill through or serve over ice.
Notes:
• 2 cups blueberries (fresh or frozen and thawed) • 1 cup cold water
For a smoother lemonade, strain prior to serving to remove pulp and blueberry seeds/skin. The lemonade pictured is unstrained.
For the Lemonade:
Source: Alaskafromscratch.com.
• zest of one lemon • 1 cup freshly-squeezed lemon juice • 2 cups cold water • ice • lemon slices and fresh blueberries (optional)
Instructions
1. In a saucepan over high heat, mix together the water and the sugar. Cook until the sugar dissolves and it becomes a clear syrup. Remove from heat and set aside to cool while you do the next steps. 2. Add the blueberries and the 1 cup cold water to a blender. Pulse until the mixture is pureed. 3. To a half-gallon pitcher, add the lemon zest,
Photo/Courtesy/John Bittner
In 2007, Michael Holthouse had a vision. By teaching kids how to operate their own businesses, he could empower them to become tomorrow’s entrepreneurs. Enter: Lemonade Day. Co-founded by Holthouse, Lemonade Day is a national event with more than 150,000 participants across the United States and Canada. It has become an effective opportunity for kids to learn what it means to set goals, work hard and manage money. Lemonade Day was brought to Alaska in 2011 by the University of Alaska Center for Economic Development; 941 kids registered in the first Lemonade Day Alaska, with a total of $149,000 in revenue. By 2013, there were 3,225 registered participants in 20 communities statewide. Once registered, participants receive a backpack filled with program materials that walk them through a strategic 14step process that includes establishing a sales goal, coordinating the logistics of operating the stand and managing the revenue. In 2013, 52 percent of the participating kids opened up, or deposited money, into a savings account, while 79 percent of the kids chose to donate a portion of their earnings to a charity. Sponsored by Wells Fargo, UAA College of Business and Public Policy and the University of Alaska Center for Economic Development, Lemonade Day Alaska is sparking entrepreneurship in Alaskan youth and inspiring them to become tomorrow’s leaders.
Participants in the first Lemonade Day in Alaska in 2013 generated $149,000 in revenue.
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CROWDFUNDING: Continued from page 19 nouncing that they had helped projects raise over $1 billion in the beginning of 2014 for over 64,000 projects from 6.5 million backers. Nearly 1,400 of those projects $100,000 or more, with 70 breaking the $1 million barrier. How have these new funding mechanisms effected Alaska? Since 2010, over $2 million has been raised through various crowdfunding platforms in Alaska. Those funds were raised in over 20 communities across the state including Anchorage, Hoonah, Juneau, Bethel and Fairbanks. On Kickstarter.com alone, 118 projects have been successfully funded at over $1.2 million from 18,000 backers. Most of those funds have been for the arts, primarily film projects, but there have also been technology projects like the GStick pen mouse that raised $140,000, the GoPro mount out of Eagle River that raised $20,000 and other projects that represent a growing manufacturing sector
in the state. The use of crowdfunding has grown exponentially in Alaska over the last five years. Going from $50,000 raised for Alaska projects on Kickstarter in 2010, to $710,000 raised in 2013, the trend is clear. Alaskans have unlocked a significant amount of community level investment through these online pitches and there is no reason to expect that those funds will do anything but increase over the next few years. Between the high wages, good quality of life and the annual payment to each Alaskan through the Alaska Permanent Fund Dividend, there is a large amount of available capital in the state that can be put to use for crowdfunding projects. Crowdfunding is an important part of Alaska’s entrepreneurial ecosystem for a variety of reasons. It’s a great way for innovators to test their ideas in the market without a lot of risk. If you think you have the next great invention, you can put it on one of the crowdfunding sites and see
what your potential customers think. Not are you raising money, but you’re also building a customer base, doing R&D, generating a PR buzz about you and your product and potentially getting noticed on a national or international stage. The best part is, if your idea doesn’t get funded the first time around there’s really no downside. You can pick yourself up, take another run at your idea and try again. From a backer’s point of view this is a great way to drive the innovation and development you want to see in your state and community. This doesn’t have to be limited to businesses and art projects. You could fund a statue of Robocop like they did in Detroit, or help convert empty lots into urban farms like they did in Boston. The sky is literally the limit when it comes to what you can propose. Crowdfunding is an excellent way to get the public behind your project, business or community development plan, and based on the successes that are being posted across the nation, there is no reason to expect that trend to change anytime soon.
Photo/Courtesy/John Bittner
FINDING FUNDING: Continued from page 20 of your business, it pays to have good advisors, consultants and plans in place to help you transition smoothly out of your business. New sources of funding in Anchorage Recently in Anchorage, largely through the efforts of the Municipality of Anchorage’s 49th State Angel Fund, new sources of funding have been created that focus on a variety of business growth stages from startups to exits. The graph on page 20 shows some of the growth stages and the Anchoragebased investment fund that supports the businesses in that particular stage. It’s important to always do your research and find the financing source that’s appropriate for you and your business with an eye on your long-term financial goals. The important thing is to plan ahead and give your business the best chance of success possible.
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2014 AEDC BOARD OF DIRECTORS Vice Chair
Secretary/Treasurer
Timothy Vig
James Hasle
President, USKH
Managing Partner, BDO USA, LLP
Vice-Chair
Immediate Past Chair
Michael Prozeralik
Joseph Everhart
Managing Principal, President, kpb architects
2014 VOTING MEMBERS Alaska Airlines Marilyn Romano, Regional Vice President Alaska Communications Michael Todd, Senior Vice President, Technology Services Alaska Railroad Corporation Dale Wade, Vice President, Business Development Alaska USA Federal Credit Union Wayne Bailey, Chief Risk Officer AT&T, Alaska Chris Brown, Director of Business Planning Management Birch Horton Bittner & Cherot Suzanne Cherot, Shareholder & Attorney BP Exploration David Van Tuyl, Chief Financial Officer Chugach Alaska Corporation Sheri Burretta, Chairman of the Board CIRI Sophie Minich, President/CEO ConocoPhillips Bob Heinrich, Vice President of Finance DOWL HKM Steve Noble, Vice President ExxonMobil Kimberley J. Fox, Public Affairs Manager
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FedEx Express Dale Shaw, Managing Director, Alaska Operations
Weidner Apartment Homes Gregory Cerbana, Director of Public Relations
First National Bank Alaska John Hoyt, Senior Vice President
EX-OFFICIO MEMBERS Alaska Legislators Senator Johnny Ellis Senator Lesil McGuire Representative Mia Costello Representative Lindsey Holmes
GCI Greg Pearce, Vice President & General Manager, Business Services Hotel Captain Cook Raquel Edelen, Vice President of Operations Northern Air Cargo Elaine Nisson, Director of Sales
EX-OFFICIO MEMBERS Municipality Of Anchorage Mayor Dan Sullivan Larry Baker, Senior Policy Advisor Ernie Hall, Assembly Chair Bill Evans, Assembly Member
Alaska Region President Wells Fargo N.A.
Chugiak-Eagle River Chamber of Commerce Susan Gorski, Executive Director Girdwood 2020 Diana Livingston, Co-Chair KeyBank Brian Nerland, District President Lynden, Inc., Past Chair of AEDC board Rick Pollock, Vice President, Global Projects
EX-OFFICIO MEMBERS Appointed by the Board
Municipal Light & Power James A. Trent, General Manager
AIDEA Chris Anderson, Deputy Director, Credit and Business Development
Port of Anchorage Steve Ribuffo
Alaska Pacific University Dr. Don Bantz, President
RIM Architects Larry Cash, President & CEO
Princess Tours Bruce Bustamante, Vice President of Community and Public Affairs
Anchorage Chamber of Commerce Andrew Halcro, President
State of Alaska, DCCED
Professional Growth Systems William Dann, President
Anchorage Downtown Partnership, Ltd. Chris Schutte, Executive Director
Pacific Northwest Regional Council of Carpenters Scott Hansen, Business Manager Premera Blue Cross Blue Shield of Alaska Lynn Rust Henderson, Director of Sales, Alaska Market
Providence Alaska Medical Center Kirsten Schultz, Regional Director, Communications & Marketing The Wilson Agency Lon Wilson, President Totem Ocean Trailer Express Grace Greene, Alaska General Manager Walsh Sheppard Jack Sheppard, President & COO
Anchorage School District Ed Graff, Superintendent Anchorage Water & Wastewater Andrew Eker, Board Representative
Ted Stevens Anchorage International Airport John Parrott, Airport Manager University of Alaska Mary Hughes, Board of Regents
Artique, Ltd. Tennys Owens, President
University of Alaska, Anchorage Elisha “Bear� Baker, Provost & Vice Chancellor, Academic Affairs
Chris Stevens Commercial Brokerage Chris Stephens, President
Visit Anchorage Julie Saupe, President & CEO
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AEDC MEMBERS Diamond $20,000+ ConocoPhillips Delta Air Lines DOWL HKM ExxonMobil Production Company GCI McDowell Group, Inc.
Alaska Airlines, Inc Alaska USA Federal Credit Union Alaska Dispatch Anchorage Water and Wastewater Utility BP Exploration The Chariot Group
Platinum $10,000 - $19,999
Alaska Communications Systems Group, Inc. Alaska Integrated Media Anchorage Community Development Authority Anchorage Media Group BDO USA, LLC Chugach Electric Association CIRI Coastal Television Broadcasting CRW Engineering Group LLC Denali Alaskan Federal Credit Union Flint Hills Resources Alaska, LLC Hotel Captain Cook KeyBank KTUU TV Northrim Bank Ohana Media Group, LLC Providence Alaska Medical Center Totem Ocean Trailer Express, Inc. USKH Inc Weidner Apartment Homes
Gold $5,000 - $9,999
Alaska Channel Alaska Dispatch Alaska Railroad Corporation Alaska Regional Hospital Aleut Corporation Alyeska Resort Anchorage Fracture and Orthopedic Clinic Anchorage Opera Architects Alaska ASRC Energy Services Calista Corporation Chugach Alaska Corporation Clear Channel Radio DenaliTek Incorporated FedEx Express First National Bank Alaska Grant Thornton LLP KPB Architects
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Morris Alaska/Alaska Journal of Commerce Municipal Light & Power Municipality of Anchorage Port of Anchorage Premera Blue Cross Blue Shield of Alaska
Lynden Inc. Orthopedic Physicians Anchorage Pacific North West Regional Council of Carpenters Princess Cruises Shell Exploration & Production The Alaska Club Thompson and Company The Wilson Agency, LLC
Silver $2,500 - $4,999
Alaska Aerospace Corporation Alaska Executive Search Alaska Heart Institute Alaska National Insurance Company Alaska Neurodiagnostic & Rehabilitation Medicine Alaska Public Media Anchorage Downtown Partnership, Ltd. Artique, Ltd. AT&T Alaska Better Business Bureau BiNW Birch Horton Bittner & Cherot Blood Bank of Alaska Brews Brothers, LLC Bristol Bay Native Corporation Buzz Rohlfing, Inc. Carlile Transportation Systems Coffman Engineers Inc. Cook Inlet Housing Authority Creative Lighting & Sound Dowland Bach Corporation Eklutna, Inc JL Properties, Inc JW Industries Group Koniag, Inc. Michael Baker Jr., Inc. NANA Development Corporation Northern Air Cargo Odom Corporation Penco Properties
Professional Growth Systems Solid Waste Services Ted Stevens Anchorage International Airport Walsh Sheppard Wells Fargo Bank N.A.
Petrotechnical Resources Alaska (PRA) RIM Architects RSA Engineering, Inc. Steamdot The Superior Group, Inc. Tesoro Alaska Company The Alaska Center for the Performing Arts The Boardroom Think Office Verizon Wireless
Bronze $500 - $2,499
3M Accurate Vision Clinic ADSB Technologies Agnew Beck Consulting AK Supply Inc Alaska AFL-CIO Alaska Airlines Magazine Alaska Cargoport, LLC Alaska Growth Capital Alaska Rubber and Supply Inc. Alaska Sales and Service Alaska Sausage & Seafood Alaska Seafood Alliance Alaska SeaLife Center Alaska Small Business Development Center Alaska Waste Alaska Wildlife Conservation Center Alyeska Pipeline Service Company American Diabetes Association Anchorage Community Land Trust Anchorage Concert Association Anchorage Fueling & Service Company Anchorage Museum at Rasmuson Center Anchorage Neighborhood Health Center Anchorage Neighborhood Health Center Anchorage Public Library Anchorage Sand and Gravel Co., Inc. Apokrisis, LLC Arcadis Arctic Controls, Inc.
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Arctic Wire Rope & Supply, Inc. Beacon Occupational Health and Safety Services, Inc Bear Tooth TheatrePub Bettisworth North Architects and Planners, Inc. Bond Commercial Properties Bradley Reid + Associates Inc. Cange and Chambers CAP Logistics Capital Management & Benefits Inc. Carr Gottstein Properties Chenega Corporation Chenega Energy, LLC Chris Stephens Commercial Brokerage Chugiak-Eagle River Chamber of Commerce City Electric Inc. Color Art Printing Co Commodity Forwarders, Inc Construction Machinery Industrial LLC Cooper & Associates, LLC Cornerstone Construction Co., Inc Credit Union 1 Criterion General, Inc. Crystal Glacier Water Davis Constructors & Engineers, Inc. DeWitt, Gordon Elwood Staffing Enstar Natural Gas Company Environmental Management, Inc. Evergreen Films Excel Construction F.R. Bell & Associates, Inc. Fairweather, LLC Florcraft Thr Foraker Group Frampton and Opinsky, LLC Furniture Enterprises of Alaska Gina Bosnakis & Associates GMC Contracting Inc Golder Associates Inc. Graham Commercial Real Estate Consultants HDR Alaska, Inc. Hilton Anchorage
Holmes Weddle & Barcott PC Hope Community Resources, Inc. Horizon Lines Alaska Hot Wire LLC Hughes Gorski Seedorf Odsen & Tervooren, LLC IMIG Audio/ Video International Union of Operating Engineers, Local 302 Irwin Development Group, LLC Jack White Real Estate Jermain, Dunnagan & Owens, PC Ken Brady Construction Kiewit Building Group Kittelson & Associates, Inc. Knik Arm Bridge & Toll Authority KPMG Kumin and Associates Linford of Alaska, Inc. Lottsfeldt Strategies Marriott Anchorage Downtown Marsh & McLennan Agency Matanuska Electric Association Matanuska Telephone Association Matanuska Valley Federal Credit Union MatSu Borough Merrill Lynch Microcom Communications Solutions Millenium Alaskan Hotel Anchorage Millrock Resources, Inc. Mind Matters Research, LLC MSI Communications Nana Management Services (NMS) National Cooperative Bank North Pole Economic Development Corporation North Star Terminal and Stevedore Co. Northcoast Mechanical Northern Economics, Inc. NorthWest Data Solutions Northwest Strategies Old Harbor Native Corporation Opti Staffing Group Pacific Rim Media
CONTACT AEDC
PangoMedia, Inc. Parker, Smith & Feek, Inc. PCL Construction Services, Inc. Pebble Limited Partnership Pedro Bay Corporation Pfeffer Development Group, LLC PIP Printing PTP Management, Inc. Q Engineers, Inc Quantam Spectrum R&M Consultants Rasmuson Foundation Ravn Alaska RE/MAX Dynamic Properties, Inc. Reid Middleton, Inc. Resource Data, Inc. RLG International Roger Hickel Contracting Inc. Schneider Structural Engineers Sequestered Solutions Alaska SLR International Corp SMG Facility Management of Alaska, Inc. Sockeye Business Solutions Southcentral Alaska Council of Building & Construction Spawn Ideas Inc. Spenard Builders Supply SprocketHeads, LLC Stoel Rives LLP Strategies 360 Swan Employer Services UAA-College of Arts & Sciences UAA-College of Business and Public Policy UAA-Community & Technical College United Retirement Plan Consultants Univar USA URS Corporation US Travel Visit Anchorage Wallace Insurance Group Weatherholt and Associates, LLC Weston Solutions Wilson Strategic Communications Yuit LLC
510 L Street, Suite 603 | Anchorage, AK 99502 Phone: (907) 258-3700 | Fax: (907) 258-6747 www.AEDCweb.com
President & CEO
Development Director
Communications Director
Bill Popp
Ruth Glenn
Valerie Walsh
bpopp@aedcweb.com.
rglenn@aedcweb.com
Business & Economic Development Director
Will Kyzer
wkyzer@aedcweb.com
@AEDC
AEDCweb
vwalsh@aedcweb.com
Live.Work.Play. Director
Archana Mishra amishra@aedcweb.com
Research Director
Executive Assistant
James Starzec
Carrie Tough
jstarzec@aedcweb.com
ctough@aedcweb.com
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