Three entrepreneurs walked into the "Lion's Den" — a group of five of Philadelphia's most prominent venture capitalists — and emerged with hundreds of thousands of dollars in investment offers.
South Jersey trading card app CollX, Philadelphia-based mental health app HeyKiddo, and New York-based ConConnect, a platform to help formerly incarcerated people find work as they reenter society, presented to a lineup of investors on Thursday at the Philadelphia Marriott Downtown. The pitch competition was part of the Philadelphia Alliance for Capital and Technologies’ 2022 Capital Conference.
Participating venture capitalists included David Adelman of Darco Capital, Michael DiPiano of Newspring Capital, Ira Lubert of Independence Capital Partners, John Martinson of Martinson Ventures and Sylvester Mobley of Plainsight Capital.
In his pitch to investors, CollX Founder Ted Mann said he was in "heavy talks" with big players in the trading card space for partnerships and licensing deals. His app evaluates the worth of a trading card based on a photo and has been growing rapidly since it launched in January. It recently introduced a "Deals" feature that allows users to trade cards, meaning Mann has so far facilitated $25 million in card trades.
He also emphasized that once the app begins to take commission on card deals its revenue could boom.
The startup has raised $1.5 million from angel investors and is looking to raise a seed round in the first quarter of 2023. Mann's pitch was enough to hook Adelman, who offered to invest $100,000. In October Adelman acquired a stake in the Philadelphia 76ers from Michael Rubin, whose Fanatics company purchased sports card giant Topps earlier this year.
Adelman wasn't the only investor intrigued. His $100,000 investment was matched by Lubert, while DiPiano joined for $50,000, giving Mann a total investment of $250,000 from the competition.
Nicole Lipkin, a clinical psychologist whose app HeyKiddo seeks to provide mental and emotional health support to young kids, faired similarly well when she pitched. Her app provides parents with instructions and talking points to address and support mental health in children ages 5 to 12, a crisis she said "is not a hair on fire issue, this is an inferno."
So far HeyKiddo has run pilots and is looking to officially launch in 2023. Lipkin, a Widener University alum, is looking to raise a $1 million seed round to build out the business to business sales model. She envisions partnerships with schools, nonprofits and government agencies.
Lipkin valued her startup at $7 million, which gave the lions pause. Still, Martinson, who has a number of mental health startups in his portfolio, said he would invest $200,000 if Lipkin cut her valuation in half. Lubert said he would match Martinson's investment with the same conditions, giving Lipkin a potential $400,000 infusion for halving company valuation.
After some back and forth, Lipkin left the stage saying "absolutely almost yes" to the offers before time ran out on the pitch clock. A deal hasn't yet been closed, PACT said Friday.
Rounding out the competition was Andre Peart, who founded ConConnect after serving five years in a New York state prison. He told investors that he was released with $5 and a bus ticket to get him to a shelter. Reentering society and finding a job was nearly impossible, he said, with most employers turning him away due to his past incarceration.
Rather than be discouraged, he set out to create what amounts to LinkedIn for the formerly incarcerated. Peart said that with mandates on prisons to put money into reentry services, he is poised to hit $1.3 million in revenue in 2023. The Yonkers native has already worked with the likes of cable company Cox Communications and home improvement retailer Lowe's, along with some government agencies, and said Pennsylvania is the company’s second largest market at present. He's raised $525,000 of an $850,000 pre-seed round and was looking for $325,000 from the Lion's Den.
He didn't quite get that, but came close. Adelman offered to invest $100,000, noting his political relationships as well as a close friend that founded the Reform Alliance as potential leverage points. The nonprofit focused on prison reform was founded by Rubin, rappers Meek Mill, Jay-Z, Brooklyn Nets Co-owner Clara Wu and hedge fund manager Daniel Loeb.
Lubert also invested $100,000, meaning Peart's ConConnect walked away with $200,000 in growth capital.
