A Connecticut-based boutique bank that makes early-stage, venture capital investments has moved its headquarters to the Tampa Bay region.
Sean Drake, managing partner of Stony Lonesome Group, grew up in New York, then spent the last two-plus decades at the helm of the group in Connecticut. But after the firm invested in Clearwater-based Equitus Corporation in 2019, it eventually became the second-largest investment for the firm — and a main reason for moving south.
Stony Lonesome Group's largest investment is an entity in Texas, which Florida has long competed against when it comes to company relocations due to similar tax breaks and warm weather.
But Drake decided to move to the Bay region because of its strong military ties, particularly MacDill Air Force. He also pointed to Tampa-based SOFWERX, which works with the U.S. Special Operations Command, and Orlando-based Central Florida Tech Grove.
Stony Lonesome Group has a focus on investing in early-stage startups that create technology solutions in the defense field, which can later be adopted to commercial uses, such as artificial intelligence and cybersecurity.
"MacDill was a very large consideration; we wanted to be close to a military town," Drake, a West Point grad and former Army officer, said. "Coming out of Connecticut and New York — to be frank they didn't care about our mission focus. I've been down here every month starting in January ... and this ecosystem, this environment was much more conducive to our mission."
The group is meeting with local startup supporters including the Tampa Bay Wave, which hosted NeuroFlow, a Pennsylvania-based company that Stony Lonesome Group previously invested in.
"While the Tampa Bay community has a notable VC presence, the local Tampa investment community has displayed little appetite for the complexities or risk of building truly next-generation technologies," Robert Guidry, CEO of Equitus Corporation, said in an email to the Business Journal. "Bringing SLG to Tampa should help to open the conversation ... to the local investment community as they see the success that SLG brings from investing in more leading-edge technology pursuits."
Drake is also willing to work with other investment firms that may be less-versed in the military space, but equally interested in the technology that can come out of the fledgling companies.
"I think some people get a little nervous when they see someone primarily in the defense space, but I expect to see where Equitus is, which has a balance between government and commercial use," he said. "We're a defense-first-focused VC firm, with a 10-year track record and would proudly work with local VC firms that don't have the cyber and AI experience. They may be comfortable to join a syndicate of investors led by Stony Lonesome."
Stony Lonesome Group typically does six to eight investments a year, with a focus on the seed stage round. It has investments across the country, but believe in working closely with the entities.
"Because (most of our) entrepreneurs have spent 20 to 30 years in the military, they're making a great product but don't necessarily have the business acumen," Drake said. "That's why with the partnership with us, we work with them to develop business acumen, and do things like help augment the advisory board, which is so important during the early years."
The firm does not currently have a physical headquarters space in the region, but as it continues to grow, Drake said residents can expect a physical footprint to follow.
"We're not a huge firm right now, but if we start to increase our assets, I expect to scale the team and this is where our headquarters will be," he said. "This is a matter of getting the word out — once people know there is a new VC in town, I expect my inbox to blow up."
