#StartupsEverywhere: Middletown, Del.

#Startups Everywhere: Pedro Moore, Founder, Funding Fuel

This profile is part of #StartupsEverywhere, an ongoing series highlighting startup leaders in ecosystems across the country. This interview has been edited for length, content, and clarity.

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Fueling Access to Wealth 

Delaware may be small, but the passion of the state’s entrepreneurs is hard to miss. One such innovative leader is Pedro Moore, who founded Funding Fuel as a means of helping everyday people build up wealth. Using an investment portfolio model, Pedro is focused on providing people, particularly those from underserved communities, with the means to invest in popular franchises to improve their financial situations.

Can you tell us a little about yourself? What is your background? 

I was born and raised in Delaware, and I graduated from the University of Delaware. 

I co-founded Delaware’s first co-working space called The CoIN Loft, and I also co-founded the state’s first-of-its-kind bubble soccer company called Bump N Play. But for the past 10 years, I worked at a venture fund perfecting investments in mostly B2B SaaS solutions, which was our ‘sweet spot’ in terms of the technology and startups in which we invested. It was mainly a Series A round focused on Delaware and the mid-Atlantic region. 

My latest venture, Funding Fuel, was named as one of the top startups in Delaware, courtesy of Techical.ly Delaware. 

Tell us about your latest venture, Funding Fuel. What is the work that you’re doing?

I’ve always had a passion for helping people, and for help everyday people build wealth. I discovered while working in venture that a lot of wealthy people have access to lots of different assets to build wealth and invest their money. And the cliched saying “how the rich get richer” basically comes from the idea that wealthier people have more opportunities to invest in various things than ordinary people. 

I wanted to help everyday people gain exposure to the investment opportunities that they have historically not been able to get, and so that’s where the world of franchising came into play. The stock market is intimidating for a lot of people, and savings accounts and bonds have horrible interest rates, but we all interact with a franchise at least a couple of times a week. It’s an infrastructure that you can touch and feel. I’ve been on this journey trying to learn about the state of franchises, because historically people need to have a lot of money and be a little wealthy to really get into the bigger and more popular franchises. The idea I had was this: What if we brought down the barriers a bit by using crowdfunding, where we would have individuals participate and invest and own a piece of a portfolio of franchises for a minimum of $1,000? 

Right now, we’re still in the early stages, but we’re building our waiting list up. We have a huge list of people that want to invest. So, in addition to that, we’re identifying our first franchise brands in which to invest.

What makes Delaware’s startup ecosystem unique?

Geographically, we’re in a perfect location to at least three or four major metropolitan cities. There’s cheaper labor in Delaware compared to New York City or Philadelphia, but the beauty is—if you need to—you can go to those regions and be back home in a day. If you have a business meeting in New York, you can get there and back home in a reasonable amount of time by just driving or taking the train. 

I also think Delaware is an agile state where you can operate and build a company organically and bootstrap it. The cost of living is decent here, which helps you afford better talent at a good price, but you can also get a lot of deals done quickly if you need to get to other cities. 

Are there any policies at the federal, state, or local level in particular that have helped Delaware’s startups?

What’s helping Delaware, and what’s helping access to capital, is that the state last year passed a new tax credit law (the Angel Investor Job Creation and Innovation Act) for individuals who invest in tech startups. Basically, the bill gives investors a credit on startup investments over $10,000. The bill is great because it helps motivate wealthy individuals to actually park their money in startups and help get some of these companies moving forward.

The only downside is that we don’t have enough quality deal flow to keep that going. And this isn’t unique to Delaware. We’re trying to build systems to help create some good quality deal flow, but I don’t think we’re there yet. Part of the challenge with some of these wealthy individuals is where do they invest? A lot of times the big question is: Where can I invest, and how can I invest? That later part isn’t an issue with our state, it’s just our startup ecosystem, where we have to start producing more quality companies. With programs such as The Horn Program, First Founders Accelerator, the Emerging Enterprise Center Incubator  among others are working aggressively to change that narrative by helping produce more qualify companies.

What I think Delaware is doing well, beyond the tax credit, is that the state recently started offering grants. In my humble opinion, in any healthy startup ecosystem, I believe the state/local government should focus on simply giving away money to startups. Educational programs are great, but what most entrepreneurs need beyond education is capital. So if the capital can further facilitate startup growth, either through grants strictly for startups, pitch competitions or funding for accelerator programs, I think that will be a good way to help. 

Delaware is beginning to do that now. They have this new program called an EDGE grant, which actually closed up not too long ago, so they’re starting to do some of that more focused funding, which is definitely a plus.  

What issues are Delaware’s startups and entrepreneurs dealing with that should receive more attention from state and federal policymakers?

Health Insurance! We need a miracle in this area, and I personally don’t know the solution. Health insurance is killing startups. If a startup is blessed to employ 1-2 full-time employees and things are going well, insurance is still eating them up and causing them to reconsider their path of entrepreneurship.

Entrepreneurs already put a lot of resources at risk; we should not have to put our health at risk, too. Some policies make it really expensive to provide insurance for staff, which could turn off potential hires and make it harder to stay afloat or even grow. Entrepreneurs have had many conversations where they reconsider the startup life, just because of health insurance, and that should not be the case. 

What is Delaware doing right to increase the diversity of its entrepreneurial community, and what other steps need to be taken? 

The EDGE Grant does have a component that awards some bonus points if you’re a woman or a minority, so that helps provide some access to underrepresented entrepreneurs. But I think it largely comes down to capital connections. A lot of startup entrepreneurs come from wealthier backgrounds, so sometimes there’s already that base of support to help provide access to capital and establish connections with the right people. 

A lot of times, underrepresented communities don’t have either of those options. They often don’t have capital, and they often don’t have the connections they need to get to know someone within the sector they’re hoping to enter. Entrepreneurs need people to give them insights into technology or provide guidance to keep them from getting stuck in a hole.

So I would like to see more hand-holding and guidance. If there’s a way for underserved entrepreneurs to get better access in some of those very early rounds—whether it’s through a pitch competition or a grant or an accelerator--it would help them get access and build up the connections they need with seasoned veterans in their industry. I’d definitely like to see more of that on the local and state level, and even the federal level as well. 

What is your goal for Funding Fuel moving forward?

My goal for Funding Fuel is to disrupt the industry and give people access to a portfolio of franchises they historically haven’t been able to access. 

The next phase is to introduce the crowdfunding model, similar to a WeFunder, where people can cherry-pick what they want to invest. And then our goal after that is to be like a funding partner. If there’s a store manager who’s dreamed of owning say, a McDonald’s, we want to act almost like a partner with them. We buy into the franchise and take on the bulk of the cost, and then over time they can buy back their equity until they become the majority owners and we become the minority owners. It’s a way for us to be almost like a rich uncle to help them get in the door. So we want to build a portfolio representing a variety of franchises so people can invest and earn passive income from that.

I also want to give back and have the chance to teach people, especially in underserved communities, about how to invest and own access in a way that builds wealth. I don’t know if that’s to give free classes or what, but I want to find a way to give back so people can learn to build wealth for themselves. Hopefully by that point Funding Fuel will have enough money so that we can start giving away funding to new startups and business ideas.

All of the information in this profile was accurate at the date and time of publication.

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