Drop Kick Ventures co-founders (from left) Pat Lazure, Mark Hasebroock and Joe Olsen.
Omaha digital advertising agency Phenomblue and venture capital firm Dundee Venture Capital today unveiled Drop Kick Ventures, an “idea incubator” that aims to commercialize products developed inside creative, marketing and communication agencies.
Its model brings together three entities – agencies, investors and entrepreneurs – to launch startups.
“We were brainstorming one day,” Dundee partner Mark Hasebroock said of a conversation he and Phenomblue CEO Joe Olsen had in June. “He was telling me … how he allocated 15-20 percent of every employee’s time to create something.”
“Some of those ideas (created) were really innovative,” Hasebroock said. “I just thought, ‘I wonder, why don’t we drop kick these into some sort of a new entity that we would fund … and if we find the management team to really drive it out of the gate, we might be onto something.’
“He and I just looked at each other and said, ‘You know, that seems to make a lot of sense.’ “
In October, Drop Kick Ventures (DKV) became a reality with a $500,000 investment from Dundee to fund operations and work from Phenomblue to give it a brand, identity and website. The “idea incubator,” as Hasebroock calls it, brought aboard Pat Lazure as its managing partner and opened an office in The Mastercraft building. It also added Eric Edens (right), a former Google employee, to its team.
Within months, DKV began to test its model. The group took in an idea — a virtual closet app for shoe lovers — from Phenomblue. Dundee committed $100,000,* and DKV provided co-founders. The startup, Connoshoer, is now operating out of DKV’s office and plans to launch next year.
When DKV turns an agency idea into a startup, it takes majority ownership (51 percent) in the new company, and gives the agency 49 percent. The agency is also given a board seat, but it’s then relieved of all other responsibilities.
DKV’s model, which was dreamt up by Olsen, aims to solve a problem that he sees as a result of an evolution in the agency world. The agency, Olsen said, has gone from being a service provider to a product maker.
“(Phenomblue) started creating tons of products … but then they’d just sit on the shelf,” he said. DKV brings products to market – “monetizing that unrealized intellectual property,” Olsen said – without displacing an important part of the agency, its employees.
Olsen said DKV’s model is unique and that he’s had people from as far away as Australia and Europe reach out to him to learn more about it.
“Time will tell if this is a successful model or not, but it’s a really interesting model,” Olsen said. “It is a unique solution to this issue at a grander scale.”
His partner, Hasebroock, who co-founded Hayneedle before founding Dundee, also sees the model as unique.
“I think we’re kind of going against the grain a little bit,” Hasebroock said. “It’s easy to find ideas, it’s hard to make something out of them, particularly if you don’t have a passionate founder behind it from the get-go. And that’s the biggest risk and I think the biggest opportunity, too.”
Lazure said DKV will be constantly recruiting and introducing itself to prospective co-founders.
“If we do a good job of playing match-maker,” he said, “we hope to have at least a half-dozen companies fully-funded and running by the end of 2013.”
Update April 8 – When orginally published, the article incorrectly stated Connoshoer raised $250,000 from Dundee Venture Capital. The correct amount is $100,000 from Dundee.
Credits: Photos courtesy Drop Kick Ventures.