Update: Cleveland House Hotels, Hatfield's Goode Grub, Her BlueWear Uniforms, Immaculate Cleaning Co., Old Brooklyn Cheese Company, PearlFlower Catering, Randy's Pickles, Sidekicks Salsa, and Vino Veritas Cellars were announced as the nine Chain Reaction finalists on Monday, August 27.
Held on Monday and Tuesday, this week’s Business Pitch Showcase took Chain Reaction hopefuls one giant step closer to answering that question. With the field narrowed down from 107 initial applicants, the remaining 18 semi-finalists took center stage at COSE’s downtown headquarters to give their “Shark Tank”-style pitches for why they should be one of five businesses chosen to receive at least $100,000 of investment.
“We’re matchmaking private investment with small businesses and entrepreneurs in Northeast Ohio,” explains Jeff Kipp of Cleveland Neighborhood Progress, one of four collaborative partners in the effort along with COSE, GlazenUrban, and JumpStart.
The five Chain Reaction investors are car dealer Bernie Moreno, Exacta Companies president Rick Blaszak, Paro Services Co. CEO Dan Zelman, fast food entrepreneur Vanessa Whiting, and Windfall Group president Eddie Ni. Here's a sampling of the pitches they heard at the showcase:
Vintage clothing and home goods shop Great Lakes Outfitters stated their need for a brick-and-mortar shop as its flagship location. (Currently, owner Kelly Pierce works out of her basement, and they showcase their products largely at outdoor markets such as the Cleveland Flea.)
Immaculate Cleaning Co. made an ask for $100,000 in exchange for 20 percent equity in their business. With clients like Cleveland Metropolitan School District and Case Western Reserve University, the company cleans at least eight facilities daily and needs more resources to fuel their growth.
Michael Januska owns Old Brooklyn Cheese Co., which he says is one of the few—if not only—cheese shops in Northeast Ohio. Currently, the Old Brooklyn resident is eyeing a new 11,361-square-foot facility in Old Brooklyn, and seeking funding for larger equipment and more supplies to produce the company’s raw, non-GMO cow’s milk and cave-aged cheeses.
A LEAN Fund recipient, iSalon Plus Hair Loss Center seeks a $100,000 investment to open a retail location in Old Brooklyn. Other proposed uses for the funding include expanding equipment from three to 10 high-powered sewing machines for the company's custom-made wigs, and creating privacy rooms for their clients to feel more comfortable trying them on.
CMSD teacher Ben Colas presented his concept for KinderKits, a kindergarten readiness tool that utilizes everyday items for learning. He’s seeking $85,000 for 20 percent of his business, with hopes of opening a production space in Old Brooklyn to meet local and national demand for the kits.
PearlFlower Catering owner Tiwanna Williams discussed the need for a commercial kitchen for her rapidly growing company, which mostly focuses on corporate and wedding clients.
Other presenters—like Randy’s Pickles and Sidekick Salsa—gave the investors a literal taste of what they had to offer with on-site sampling, while Her BlueWear Uniforms enlisted models to showcase their custom uniforms for female public safety officers.
Among the other companies making impassioned pleas to the investor panel were: Cleveland House Hotels, Ellie-May's Gourmet Cookies, Hatfield's Goode Grub, JB Grill Soul Food & Catering, Lake Erie Pet Food Co., La Posada Latin Cafe & More, Our Favorite Things Boutique, Vino Veritas Cellars, and Yellowcakeshop Clothing.
"We had such a great variety of businesses make it to the semi-finals this year—from food to clothing to personal care items to cleaning services," says Megan Kim, Senior Vice President, Membership Development and Marketing for Greater Cleveland Partnership and COSE. "It was evident during their pitches that each of these owners is ready to take their business to the next level. They just need a little bit of help from successful professionals like our investors to help them. Our investors not only bring the capital to support growing these ventures, they also bring years of experience building their own companies, which will certainly benefit our Chain Reaction companies."
With the Chain Reaction events being filmed for Fox 8, GlazenUrban founder Alan Glazen says some of the businesses are already benefiting from the exposure. “Ellie-May’s Gourmet Cookies had a record day [on Tuesday] after her pitch was shown live on the air,” says Glazen. “Just by participating in Chain Reaction, it can bring enormous amounts of publicity and eyes on your business.”
As the initial spark behind Cleveland Chain Reaction, Glazen knows that well. Glazen was one of the investors on CNBC’s “Cleveland Hustles” series (created by LeBron James and Maverick Carter), and ultimately invested in Cleveland Bagel Company. He went on to start Chain Reaction with CNBC’s blessing when they ended the series after one season. Instead of a television show, Chain Reaction is now an economic development project that kicked off last year in Slavic Village and is continuing in Old Brooklyn.
“What sets Cleveland Chain Reaction apart is that we are prescribing where all these businesses will land together so that we can make an impact in urban neighborhoods,” says Kipp.
Both Glazen and Kipp believe Old Brooklyn is in a prime position to maximize the benefits of Cleveland Chain Reaction. “Not only is Old Brooklyn the biggest, most populated neighborhood in Cleveland, but it’s also the next and most ready-to-emerge neighborhood,” says Glazen. “It has a very strong community development corporation and a very strong demand locally for services that aren’t yet provided there.”
The Chain Reaction neighborhoods are carefully chosen as "commercial corridors or districts that have experienced positive momentum," says Kipp. "We're looking for neighborhoods that have some traction of success, are seeing new businesses join in, and could benefit from the boost of one million dollars of investment and five or more businesses."
Since last year, several enhancements and improvements have been made to the selection process—such as a six-week bootcamp specially facilitated by JumpStart for Chain Reaction semi-finalists to help prepare them for the showcase.
“Last year, we noticed some inconsistencies in the pitch presentations from small businesses to investors,” shares Kipp. “That’s why the insertion of JumpStart was so key—this year, all 18 businesses made clear and concise descriptions of who they are and what they do, identified competition within Northeast Ohio and beyond, and eloquently put forth an initial idea of what the offer is. It really allowed our investors to have apples-to-apples comparisons of one company versus another.”
Glazen says they’ve also incorporated more thorough vetting of investors, requiring them to put money in escrow. Each is required to invest at least $100,000, but has the option of investing more or investing in multiple businesses. “At this point, it’s incumbent on the investors and businesses to have ongoing conversations so we can make good matches,” says Kipp.
So what’s next? Now that all 18 semi-finalists have made their pitches, the investors will identify the company (or companies) they want to back. According to Glazen, the investors will meet on August 7 to share their selections and decide who will work with whom. The goal is to make a formal announcement of the winning businesses by October, though Kipp says they may make some gradual reveals beforehand via social media or television appearances on Fox 8.
In the end, Kipp believes that all of the semi-finalists will benefit from being part of Chain Reaction. “While not all 18 [companies] will get an investment, this is still an incredible opportunity to receive exposure and learn about the small business ecosystem in Northeast Ohio,” says Kipp. “We try to keep them in the pipeline, help them grow and succeed, and expose them to neighborhoods like Old Brooklyn—where some of them might end up anyway.”