Most startups can’t afford to hire someone with 25 to 30 years of experience in their industry, but many could use that type of talent at some point in their company’s journey.
A CFO to help raise capital. A sales leader to develop a strategy for selling or to recruit a solid team. An operator to put systems in place for managing a business.
A Richmond-based firm with a new office in the Triangle hopes to fill the need with its 60 experts in fields as varied as marketing, sales, strategic planning, venture capital, private equity, finance, HR and executive recruiting. Called The Fahrenheit Group, the firm provides both seed and growth stage startups with fractional services like a CFO one day a week, or an operations consultant to put internal systems and infrastructure in place to support rapid growth.
The reasons for a Triangle operation aren’t shocking. There’s the strong universities and the IP, business ideas and entrepreneurs spinning out of them, and close proximity to Richmond for team members to make a day trip. The pay-it-forward culture in Richmond was resonant in the Triangle too. But even bigger for founders Rich Reinecke and Keith Middleton, is the opportunity to be part of a community they envision to be a top location for startup formation in coming years.
“They wanted a presence in one of the best locations for rapidly growing early stage companies with disruptive technologies,” says Bill Kaluza, the Triangle office’s managing director (pictured top left).
So far, they’re pleased with the decision. The customer count is more than a dozen and six people now work out of an RTP office.
Fractional work is on trend
Consulting and fractional work is taking off in today’s startup economy. Companies both bootstrapped and venture backed need work performed that could help them create a new process or validate an idea or raise funds. Though the hourly cost may be higher than that of a full-time employee, it can be worth the short-term expense if it means holding off until a company is ready to make a hire.
And many of these folks have 15 to 20 years of experiences under their belt to offer sound advice and connections.
In the case of The Fahrenheit Group, the economic recession in 2009 provided a catalyst for the organization. Reinecke had spent years matching talented people with accounting and finance jobs in Richmond, when the sinking economy made it difficult for his executive search firm to stay afloat.
He was approached by a serial entrepreneur in the community named Karen Adams, who’d recognized a need among early stage startups in the community for financial help and business consulting. She connected Reinecke with Middleton, who was ready to do something new after serving as a public accountant and corporate controller of a Fortune 500 company.
“We had beer and wings and a conversation about morals, ethics and values, and what we would want to do with a company,” Reinecke says. “And we walked away saying we can work together.”
That was 2010.
The Fahrenheit Group employs 90 people today, 60 of them working as consultants and fractional executives in Richmond and Phoenix. They range from entrepreneurs with exits under their belts to parents of middle school or high school students looking for flexibility as they re-enter the workforce.
And in early 2016, it acquired a local executive recruiting firm, expanding its bench to include that service.
In the Triangle, the team brought in Kaluza to lead the office and Darren Smith (pictured top, right) to bring in new business.
Serial entrepreneur leads the Triangle team
Kaluza has a business background that started at the University of Pennsylvania’s Wharton School and a law background that began at Penn State’s Dickinson law school. After practicing law at a larger firm in Philadelphia, he decided to join a Washington D.C. company as in-house counsel.
He eventually co-founded a manufacturing supply chain management software company called Manugistics after a management buyout of its predecessor. It went public four years later with a market cap of $1 billion.
Kaluza moved to the Triangle after that to serve as CFO of a startup called Interactive Magic. He then moved on to Duke University spinout Volumetrics Medical Imaging. The next nine years were spent consulting, investing and serving as a fractional C-level executive for various companies.
And that led him to supply chain software company Intervolve Software, where he served seven years as its CEO.
Kaluza says he’s accomplished everything he hoped to accomplish with his own career. He views his work at The Fahrenheit Group as a way to help other companies be successful, and to “help others achieve their dreams.”
The men are earning clients through relationships with investment bankers, venture capital firms and lawyers, as well as networking. They say pricing is dependent on the need and size of the company—they won’t shy away from an early stage client.
And while they try to meet the needs of RTP companies with the local team of mostly financial executives, the team in Richmond is a short drive away. Kaluza hopes to add more local experts as demand warrants.
Reinecke says one of the most gratifying aspects of the group’s fractional work is the ability to work with emerging companies over five or more years, at each stage supporting them in new ways.
It’s also been fun to serve customers around the U.S., Reinecke says, which the group is better positioned to do as it expands even beyond the Triangle soon.