Winston-Salem Journal reporter Wesley Young contributed to this report. email@example.com 336-727-7376 @rcraverWSJ
Read the original article as it appeared in the Winston-Salem Journal here.
A breath of fresh entrepreneurial air is about a month away from flowing into what had been downtown Winston-Salem’s largest real estate white elephant — the former GMAC Insurance tower.
Winston Starts, a nonprofit group that aims to accelerate the growth of startup businesses, plans to open space in February to 12 tenants on the fourth and fifth floors of the 18-story building.
The 340,613-square-foot building has been vacant for nearly four years since National General Holdings Corp. moved in April 2014 into smaller space in three buildings at the Madison Park office complex off University Parkway.
The 17,500-square-foot floors will feature plenty of open space, comfortable home furnishings, conference rooms, big-screen televisions up to a 110-inch projection screen, cafes and around-the-clock access.
When the neighboring six-story building is torn down to make way for the construction of more than 200 apartment units by Grubb Properties, both sides of the tower will receive beams of sunshine. Grubb is building a $48 million mixed-use facility.
Winston Starts is a key nonprofit element of the $10 million building revitalization, which also dedicates 90,000 square feet of office space to Flow Automotive Cos. and its workforce of about 140. Don Flow is the visionary for the entire renovation project.
The startup tenants will be able to stay in the leased space for up to 30 months. The goal is to have up to 50 tenants at one time, based on one to three employees per company.
Tenant cost: $125 per employee per month on the fourth floor and $200 per employee on the fifth floor. For some tenants, a percentage of their rent money will be set aside in an account for future use.
Tenants on the fourth floor will not have assigned space on purpose, while fifth-floor tenants are considered later-stage startups and will have assigned space.
“We fully expect tenants will collaborate and share practices with one another,” said Steve Lineberger, the president of Winston-Starts. Joining him on staff is Betsy Brown as operating director.
“That is the startup culture, and one of the reasons they want to be a part of Winston Starts, to have a pool of companies where iron shares iron,” Lineberger said.
Lineberger comes to Winston Starts with management experience at Sara Lee Corp., including as the chief executive of Sara Lee Casualwear, and at Krispy Kreme Doughnuts Inc. as the president for U.S. franchise operations and the senior vice president of corporate strategic planning.
More recently, he served as the chief executive of startup SneeZ LLC — another initial tenant in the new space — and as the chief operating officer of Advanced Battery Technologies Inc.
Lineberger said some later-stage companies already may have gone through one or two capital raises, or developed to the point of generating revenue.
Every tenant will have access to mentors and peer expertise across the charitable, consumer goods, health care and information technology sectors.
“We are really excited to have such a strong and diverse pool of companies seeking the particular resources Winston Starts offers,” Lineberger said.
The diversity includes attracting companies from New York City (Healthy Bytes), Boston (Resilience Gives) and Charlotte (Wellnecity), as well as the remaining nine from Winston-Salem and the Triad.
“To have generated interest from inside and outside of the state, and across multiple industries, with only word-of-mouth is affirming of our intensive, long-term model of startup support,” Brown said.
An ‘encore floor,’ too
Although Winston-Salem supports several incubators for startup companies, most notably in Wake Forest Innovation Quarter, the vision and mission of Winston Starts raises the bar for support and mentors, Brown said.
The group has been intentional in reaching out to women and minority entrepreneurs.
“One of our distinctives is that we are stage agnostic and industry agnostic,” Lineberger said. “Most accelerators and incubators are focused on certain stages and certain industries, or at least on tech companies.
“We will consider admission for inception stage all the way to market-readiness stage.
“On the industry front, we have found that with so much appetite for tech on the part of accelerators, consumer goods startups rarely have a place in the entrepreneurship ecosystem,” Lineberger said. “We have a place for them, as well as tech companies.”
Flow said Winston Starts will support “companies at any stage …. on a timetable that fits their business model and markets.”
Flow said there will be what he called an “encore floor”: a place where senior and retired executives can have offices — with a catch: Each would have to volunteer to be a mentor to a young person starting a company and would have to invest in one of the startup companies based in the building.
Eric Tomlinson, the president of the research park, said Winston Starts “exemplifies the positive momentum in our local innovation ecosystem.”
Tomlinson said research park officials will interact closely with Winston Starts as the have with other entrepreneurial initiatives, such as Flywheel, Mixxer, VentureCafe and the Enterprise Center. That includes events promotion, meeting sponsorship and entrepreneurial-development programs.
Tomlinson said Winston Starts will play a pivotal role “as we connect and support all parts of the innovation ecosystem.”
Lineberger and Brown expressed confidence that Winston Starts will complement existing entrepreneurial efforts by providing new space for advanced startups, thus freeing up room for brand-new efforts.
“Some of our first tenants have been recommended for inclusion here by other local groups,” Brown said.
Lineberger said the companies and their officials ideally should be “scalable, commercial and coachable.”
Tenants “must have the potential for a national or even global revenue footprint,” he said. “They must demonstrate the ability to scale their business as they grow into that footprint. The word commercial has two meanings: they must be a for-profit and must be a readily navigable path to commercialization.
“We can help these tenants prime their pump,” Lineberger said, but they and Winston Starts have to be self sustaining for long-term success.
‘I love the opportunity’
A local example of an entrepreneur hitting all the Winston Starts marks is Karen Cuthrell and her The Feeling Friends line of prekindergarten educational tools.
Cuthrell’s business has been selling coloring books, CDs and online products for four years.
“North Carolina public-school curriculum requires that children have 11 feeling words in their vocabulary before leaving pre-K,” Cuthrell said. “Our kits help children learn those words, with every animated character having a feeling and a song tuned into their feeling.”
She has landed supporters from Head Start of Forsyth County, Head Start of Mecklenburg County and Best NC, a nonprofit, nonpartisan coalition of business leaders committed to improving North Carolina’s education system through policy and advocacy.
Cuthrell is partnering with Wake Forest School of Medicine researchers Stephanie Daniel and Parissa Ballard on the products.
“I have followed Don Flow since I returned from D.C., and I admire how he integrates his faith into his business while respecting others’ faith as well,” Cuthrell said. “This will be my company culture as well.
“I love the opportunity of being with other entrepreneurs in a space where we are able to share ideas and grow together.”
Cuthrell said she is hopeful the new office space will present her with new opportunities for raising capital “that has been difficult for me so far.”
“I’m hopeful that this space will lend us more credibility to help us reach the next level,” she said.
The pull of familiarity territory has led two Wake Forest University graduates to open a shop with Resilience Gives in downtown Winston-Salem, and not in Boston.
Jake Teitelbaum, the company’s founder and chief executive, came up with the idea for fashionable nonslip hospital socks while receiving chemotherapy treatment for lymphoma beginning in May 2015.
Teitelbaum said in the “Our story” posting on Resilience’s website that he views the whimsical socks as playing a role in lifting hospital patients’ spirits. Patients have offered 20 designs for the socks in a collaborative effort.
The company also uses the designs for casual, dress and athletic purposes.
“We are a community of patients, survivors and volunteers finding strength amid weakness,” Teitelbaum said. “In our state of vulnerability, we unearth dignity.”
The company has reported more than $126,000 in revenue. It also has helped raise more than $48,000 for research and to help with patient care.
“As a young team of Wake Forest alums, we feel a deep connection with the city of Winston-Salem and beautiful Blue Ridge mountains,” Teitelbaum said.
“With our production and fulfillment located in North Carolina, we jumped at the opportunity to come back and take advantage of the expertise and resources within Winston Starts and the broader Winston-Salem startup community.”
In an October economic-development presentation, Flow discussed the reasoning behind his grand experiment with the former GMAC building.
“We have 60,000 college students in the Triad and no place to come start a company,” he said. “We have prominent people from all over the United States sending their kids here to Triad colleges.
“Our goal is to retain them, to give them a place to come work, a place to start companies and a place to imagine the future.”