Jul 27, 2019
This conversation is with Jamie Rhodes, founder of the Central Texas Angel Network, an active angel investor group, based in Austin, TX. The startup story begins with an accelerator hosted by Texas State University and supported by a group of local mentors and advisors. One of the companies gaining traction in the accelerator was SioTeX. The company ’s Intellectual property which had been funded and developed by Texas State University was a new method to convert rice hulls, which are a waste product, through a proprietary process to create a high-grade organic compound called Silica.
After the initial round of startup funding, the company began to work on commercializing the production of Silica for Paints and Coatings manufacturers. Silica is used in the production of paint.
As the sales and marketing process engaged with the paint manufacturers in the U.S., there was “little or no response”. Eventually, the company learned from these prospective customers, that their product did not meet the specifications required by the paint manufacturers.
At this point, two years after the initial funding, the company faced a clear dilemma. They were low on cash and had not found traction in the primary market as defined by the original team. And just one more issue, the CEO had decided to leave the company and pursue some other interest.
The dilemma for the investors was: Is it time to walk away or put more money into the company on the hope that a viable market fit would be found.
In other words, the investors had to decide if it was time to hold ‘em and invest more money or time to fold ‘em, and walk away and let the company fold from insolvency.
Join me with our guest, Jamie Rhodes, who was an early mentor to the company, invested in the company and was on the Board of Directors. The other board members and the shareholders convinced Jamie that he was the best person to take over the role of the CEO and hopefully turn the company around.