A Cincinnati startup founded earlier this year by a Roadtrippers alum is off to a fast start with its recent acceptance into one of the city’s oldest accelerator programs.
SMB.co, which is helmed by co-founder and CEO Joe Brown, is one of five startups selected for Ocean Accelerator’s latest cohort. It’s the only locally based company in the group.
SMB.co is positioned as the "Zillow for small businesses" – a tagline Brown credits to fellow local entrepreneur Tim Metzner, CEO of Fireroad, a Cincinnati-based pre-seed venture fund and Ocean Accelerator partner.
The goal, Brown said, is to make it easier to buy and sell small businesses – a process his startup believes is complicated and outdated. Brown said 98% of small business owners don’t know what their business is worth, and 86% lack an exit plan. Of the small businesses that do go to market, 80% never exit successfully.
SMB.co, initially, will act as a matchmaker for buyers, sellers and brokers.
“It's definitely needed in this space,” Brown told me. “Things can be very opaque, and everybody feels like they benefit from keeping everything private.”
The company’s recent acceptance into Ocean Accelerator has proven a major accelerator. Brown started kicking around the idea for SMB.co in January, adding Mike Hillenmeyer, chief operating officer, and Britni Zandbergen-Karel, chief marketing officer, to the team in May. Both hail from Blue Ash-based insurtech Coterie, one of the region’s best-funded startups.
Brown himself spent a few years with Roadtrippers, a digital road trip planning developer, and later founded Nucode, a low-code community platform acquired in 2020 by NoCodeOps. NoCodeOps last week was acquired by Zapier, a San Francisco company that helps businesses automate workflows and transfer data.
Ocean, which spans 17 weeks, kicked off in early June. This marks the accelerator’s 10th cohort. Other companies hail from San Francisco; Kampala, Uganda; Atlanta; and Marietta, Ga., respectively.
“It feels like we're building a small family around the other founders and the other early-stage startups that are there,” Brown said. “Building something like this isn’t easy, but they've helped us work on that pitch and that value proposition for owners, buyers and brokers. … it's just been amazingly helpful."
A ‘silver tsunami’ means more businesses to buy and sell
It’s estimated 2,500 small businesses are bought and sold every day, Brown said – a number that’s picking up steam as baby boomers look to retire. Boomers are poised to sell or bequeath $10 trillion worth of assets in the coming years – assets they hold in more than 12 million privately owned businesses nationwide, according to the California Association of Business Brokers, a trade group.
While some in that aforementioned 80% range are deemed unsellable, many more are good investments, Brown said. A host of issues can prevent a successful close.
“There's a lot of businesses where it’s just a retiring owner, and they have nobody to hand it off to – whether in their personal family or in their direct network,” Brown said.
SMB.co’s M&A platform will “open that (opportunity) to their local community, and every other investor in the marketplace,” he said.
The company also will offer a database of available small businesses as well as automated business evaluations. “If you know the value of your home, you should know the value of your actual business,” Brown said.
SMB.co is looking to launch its marketplace nationwide by the time Ocean wraps in September. "Right now, we're going state-by-state, essentially, finding buyers that are interested in businesses and personally being their search team," Brown said.
He hopes to have the first deal closed on the platform before October.
“It's (Ocean) definitely speed things up,” he said. “There’s so much demand. We're even finding folks on (social media site) Reddit who are trying to get rid of their businesses or find the right person to hand it off to.”
For Ocean, the cohort sits at the halfway mark. The teams will make stops in Colorado in July and Los Angeles in September. Founders, in addition to mentorship, education and professional support service offered through the program, are encouraged to integrate their faith, purpose, relationships and health into their startup journey.
Ocean also comes with funding.
Brown said SMB.co will follow with a formal venture round later this year. Ocean serves as a good launching point.
“In the future, I don't know if I would go the VC route without doing something like Ocean again,” he said.
Meet Ocean Accelerator's cohort 10
- ESGentle, led by Lana Suvorova, CEO. ESGentle is a business-to-business software-as-a-service (SaaS) platform for sustainability reporting and market insights in grocery. Based in San Francisco.
- Palli, led by Jonathan Brown, CEO. Palli is a credit and payment platform for businesses in Africa's supply chain. Based in Kampala, Uganda.
- QuestRead, led by Janessa Ferrell, CEO; Greg Ferrell, COO; and Pavel Kozlovsky, chief technology officer. QuestRead is an adaptive learning mobile game for children who don't love reading. Based in Marietta, Ga.
- Good Agriculture, led by Alex Edquist, CEO. Good Agriculture is a farm business management platform for small-to-midsize farmers. Based in Atlanta.
Since its launch, Ocean has supported 75 tech businesses in 10 cohorts. More than $160 million has been invested in those companies, and the accelerator has celebrated three exits in its alumni portfolio: Atlanta’s Sawa, acquired by Mailchimp in 2019; Cincinnati’s StreamSpot, acquired by Subsplash in 2020; and Martin, a local digital marketing consultancy, acquired in September 2022 by PubMatic in a $45 million deal.
