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Jacksonville's Startup Economy: The Investors Behind Downtown Jacksonville's Startup Success

Will Dickey
The Florida Times-Union

People involved in downtown’s startup economy often talk about building an ecosystem.Elton Rivas, who’s a part of many of downtown Jacksonville’s startup successes, says it all comes down to density—getting a lot of startups and the entrepreneurs who build them in the same general area.

“In any of the businesses we’re in, whether it’s the coworking community or One Spark which is this big festival or KYN which is a startup accelerator program, it’s all about the density of those types of people—so that is what was important to us,” he said.

The first step in creating that density was opening Cowork Jax downtown. It’s a space for people who might have previously worked at home or from Starbucks to come together in an environment where they can share ideas.

Rivas approached retired developer Peter Rummell about investing in the business. Rummell said he agreed to back the project because he was familiar with the idea of coworking and he liked Rivas.

"I thought it was a compelling opportunity," he said. "(Rivas) seemed like someone who had his act together and I trusted him morally."

Rummell invested $50,000 and encouraged a few of his friends to do the same. Company documents show the investors include Preston Haskell, founder and chairman of the Haskell Company, Martin Stein, the Chairman and CEO of Regency Centers, and the Trust of Real Estate Developer and civic leader Jim Winston.

"I think what I said to the other guys was I think we’ll get our money back and there may or may not be a return on it—but it’s one of those sparks it’s going to take to make Jacksonville happen,” Rummell said.

Cowork Jax did help to spark the One Spark festival, which was the next big development in the downtown startup scene. Rummell invested about $750,000 to get the inaugural One Spark off the ground.

Other major players joined in including Jacksonville Jaguars owner Shad Khan who pledged $1 million in investments to One Spark participants through his Stache Investments company.

Stache’s chief investment officer Jim Zsebok said it’s all part of a long term strategy to build that entrepreneurial ecosystem.

"You have to bring people with ideas to Jacksonville, and we feel very confident that once we get them to Jacksonville based on the resources here and the mentors and the things that we can provide through this entrepreneurial ecosystem that we can get them to stay here and hopefully grow their business here," he said. "At the end of the day that’s good for Jacksonville and that's what Stache is here for."

Khan’s Stache Investments surpassed the original $1 million commitment for One Spark and then invested in the downtown business accelerator called KYN, which provides resources and know-how to startup companies.

Now as One Spark prepares for its second year, it’s attracting even more venture capital. Shad Khan has again pledged $1 million and he’s been joined by Arsenal Venture Partners, Florida Blue, Healthbox, Palm Ventures, PS27 Ventures and UE Investors to offer up to $3.25 million in potential investment for One Spark creators.

Peter Rummell says they’ve learned a lot in the two years since he made his initial investment in Cowork Jax.

“I was thinking about it more as a real estate play than as an engine for creativity...and I think it has turned out to be that which is far more valuable than the real estate use," he said.

It also turned out he and his friends got their money back and a return on that initial investment.

You can follow Karen Feagins on Twitter @karenfeagins.

Karen found her home in public broadcasting after working for several years as a commercial television reporter. She joinedWJCTin 2005 as the host of 89.9 FM’s Morning Edition and has held many different roles at the station in both radio and television. She has written and produced documentaries includingBeluthahatchee: The Legacy of Stetson Kennedy and Jacksonville Beach: Against the Tide and directed the oral history project, Voices of the First Coast.