Welcome to the Aug. 10 Monday Business Briefing, your private business intelligence digest from Insider Louisville.
GLI veep Terry Gill stepping down
The turnover continues at Greater Louisville Inc., this time with Terry Gill, vice president of EnterpriseCorp, departing after only eight months to take a job in the private sector. His last day is Aug. 13.
Gill confirmed his imminent exit over the weekend, telling IL via email: “I’m leaving EnterpriseCorp and returning to the private sector to become president of a national marketing services company. It’s a wonderful opportunity for me and though I remain committed to this community and the work that we are doing at GLI, it was something I couldn’t turn down.”
IL will have more details about where Gill is heading in a follow-up post.
When asked who will lead EnterpriseCorp in Gill’s absence, GLI President and CEO Kent Oyler told IL via email, “Since my business background is entrepreneurial, reporting responsibility for EnterpriseCorp will come to me until a strong new leader is recruited.”
Oyler commended the outgoing VP for his accomplishments: “GLI always has and continues to attract top talent, and at times our staff members are recruited away. We are appreciative and proud of Terry’s many contributions to GLI during his tenure here. Under his leadership, EnterpriseCorp has assisted with the funding of 18 companies this year, renewed the Kentucky Innovation Network contract, and began a plan to transform entrepreneurship in Greater Louisville.”
EnterpriseCorp will retain its strong momentum, Oyler added, with the ongoing leadership of Director Lisa Bajorinas, along with recent hires Amelia Gandara, director of commercialization and engagement, and Brittain Skinner, assistant director of the Kentucky Innovation Network.
Gill took over as leader of EnterpriseCorp — the chamber’s division focused on startups and fast-growth companies — in December 2014. His appointment was the culmination of an eight-month search to replace Tendai Charasika, who left GLI in April of last year to take a job as CEO of tech startup SuperfanU.
Now, the search is on again.
Prior to coming on board at GLI, Gill was the entrepreneur-in-residence and managing director for Access Ventures Capital, a philanthropic venture capital group. And before that, Gill purchased FetterGroup, where he served as president and CEO until selling in 2013.
Gill’s exit is the latest in a string of departures at GLI, with numerous high-level personnel coming and going at a pretty quick clip, albeit for a various reasons.
In May, James Reddish, GLI’s VP of economic and workforce development, left for Chicago due to his wife’s job at Hillerich & Bradsby being transferred. Just last week, GLI announced that Deana Epperly Karem — director of Oldham County’s chamber — will fill the vacancy left by Reddish.
Also last week, GLI announced the hiring of Brian Jones as vice president for investor development.
As IL reported back in June, seven of GLI’s top eight execs are new in the past year, and about one-third of employees at the chamber are new to the organization or their position there. —Sarah Kelley
What’s it like to be acquired by Aetna?
What’s it like to be at a company acquired by Aetna? Former and current workers at Coventry Health Care would know, and some have shared their opinions on the website Glassdoor.com. And the reviews by the Coventry workers under Aetna are mixed. We started looking into this following Aetna’s Aug. 5 release of a public document in which some of its leaders spoke about how they foresee saving lots of money after the Humana deal via “synergies”– which is corporate shorthand for lay-offs, killing projects, and the like. Aetna said it based its thoughts on the benefits of post-merger synergies at least partially on what happened after it completed its merger with Coventry in 2013.
In this new public document, Aetna President Karen Rohan said she expected close to $1.25 billion in synergies between the Aetna and Humana, with $1 billion of that coming from eliminating redundant selling, general and administrative (SG&A) expenses.
“So, most of those synergies, about a billion of those, are in SG&A, at cost, overall administrative cost,” she said. “How do we get that? We get that through duplicate functions … Just like in Coventry … We’ll get it from systems, shutting down some systems that don’t make sense, stopping initiatives that both of us do. So, you know … we both have technologies that support the consumer, we both have technologies that support the provider … and we will employ the best of breed at integration just like we did at Coventry.”
So, again, what did Coventry people think about Aetna?
One former employee noted how there were multiple rounds of layoffs in Coventry’s IT department after Aetna bought the firm. “They were, however, handled in a very professional manner by the company,” the writer said.
Another reviewer noted that “benefits under Aetna are far more expensive than they were under Coventry, and they only offer high-deductible medical plans.” This was echoed by another reviewer who complained of “particularly poor health benefits since (the) Aetna acquisition.”
Another worker said Aetna’s benefits were “okay,” but that they had good programs for work/life balance.
One reviewer complained of the “bumpy track when merging with Aetna,” while another said the “Aetna acquisition has changed everything, and not for the better.”
Another reviewer, however, saw positives in Aetna. “Since having been acquired by Aetna (I) have been able to work at home a few days a week,” they wrote, adding “since having been acquired pay has increased.” —David Serchuk
New bar set to open in former La Coop Bistro space in NuLu
Galaxie — the latest new business in NuLu— is slated to open at 11 a.m. on Tuesday, Aug. 11.
Run by the same people behind Rye — owner Michael Trager-Kusman, executive chef Tyler Morris and beverage director Doug Petry — Galaxie is first and foremost a bar.
“The concept came from something we thought the neighborhood could use, which was a bar,” Petry said. “A neighborhood bar at a reasonable price point.”
NuLu doesn’t have a bar scene beyond Garage Bar, and Petry said they hope Galaxie will help draw people to NuLu the way they flock to The Highlands and St. Matthews to drink.
“We just hope everyone comes with a good attitude and has fun,” Petry said.
Cocktails will average $7, and beer prices will range from $3 to $7 a glass, he said. Whiskeys will start at $3.
The drinks will be simpler, a.k.a. feature fewer ingredients, than what one might expect at Rye, Petry said. And Galaxie’s “calling card” is going to be its 16-ounce margarita, which will sell for $7. Customers will have the option of making the margarita spicy with the addition of jalapenos.
Galaxie has a small six-item menu with dishes such as Across The Universe, a dip platter with hummus, spinach saag, roasted tomato harissa, whipped feta and cucumber labna, and Wakatakas — beef shawarma, charred onions, pickled peppers, tahini sauce, roasted tomato harissa served with Galaxie bread. Galaxie bread has a similar consistency to naan but is made differently, Petry said.
Menu prices will for the most part range from $8 to $15.
Former Indatus execs reveal secrets to success … and sale
The former top execs at Indatus recently doled out advice on how to do business, as well as how to sell a business.
Before an audience of local business leaders and budding entrepreneurs gathered for a Venture Connectors event, ex-Indatus CEO David Durik and ex-president Phil Hawkins detailed what went into the sale of the Louisville communications tech firm, which Texas-based RealPage acquired for $49 million in June.
Much of their advice was practical. For example, Indatus never locked its clients into long contracts, instead allowing them to use their products free for 30 days. Hawkins referred to this approach as a “puppy dog sale,” as you never return a puppy after you bring it home. Getting clients used to their services eased the transition to getting them to commit, Durik said, with no contracts needed.
Indatus — started in 1989 — also learned mission-critical tech services had to be brought in-house, as they were a tech firm, and if one of their systems broke at 2 a.m., it needed to be fixed right away. Few vendors are willing to get up in the middle of the night to do that.
They added any business must choose strong partners, including accountants and lawyers. “We built friendships with those groups and we were loyal to them, and they were extremely loyal to us,” Durik said. “The most important thing is they were confidants … if shit were hitting the fan, we could call them.” He singled out Ben Fultz, head of Louisville legal firm Fultz Maddox Dickens, as such a person; when it was time to sell the company, Fultz got the call.
When it comes to staffing, they highlighted the importance of hiring good people that make up for your weaknesses. Hawkins said he was good at sales but bad at managing. So he hired a sales manager, which expedited the firm’s growth. “It was hard to step back and admit that weakness,” he said.
They also had advice for how to sell a company — like don’t be too stubborn when it comes to the small details. For example, sometimes home sales get torpedoed because the homeowner won’t part with, say, a refrigerator. So they’ll compromise the sale to win a small, symbolic victory. The same thing can happen when selling a company.
But their key advice when considering a sale: Know when to say when. Over the past few years, they received a lot of calls from private equity firms, a sign their firm was hot. Durik said, “I’d much rather have somebody chasing me up the hill because times are great than me chasing someone down the hill because the market has turned.” —David Serchuk
Red Hot Roasters in select Kroger stores
Fans of Louisville-based organic coffee company Red Hot Roasters now can buy bags of their whole beans or canned grounds at a few Kroger Co. locations in Kentucky.
The pre-packaged coffee is available at the Kroger stores in Middletown, Prospect and Versailles. However, Red Hot Roasters’ products will slowly become available in more Kroger stores in the city.
Owner Sondra Powell said her coffee has been added to Kroger shelves as new stores open and after others undergo renovations. “A lot of stores we are on the cusp of going into,” she said. — Caitlin Bowling
A look at which local startups are getting more funding
Some familiar names (and a few that are under the radar) from the Louisville-area startup scene recently scored additional investor funding. Here’s a rundown:
The biggest injection of new funding went to Clearleaf Finance, which received $1.48 million from private investors, according to Venture Connectors, a local nonprofit aimed at connecting entrepreneurs and investors. Clearleaf will use these new funds to purchase tax liens in Kentucky and Indiana. Clearleaf specializes in short-duration specialty finance assets in the form of liens, factored receivables, and other non-bank financial structures. In early 2013, Kris Robbins co-founded Clearleaf — the latest in a long list of companies on his résumé — with the help of angel investor Lou Kelmanson.
Red-hot local firm Capture Higher Ed also reported it received an additional $1.2 million in funding, thanks to an oversubscribed funding round, led by the Yearling Fund (which is also an investor in startup golden boys BEAM Technologies, by the way). Capture will use the additional moolah to recruit more students for its clients, and according to Venture Connectors, “engage in customized communications leading to application completion.”
Biotech firm TherapyX received $150,000 in Kentucky SBIR Phase I matching funds. This is the maximum amount a company can receive in Phase 1 funds; SBIR funds are primarily used to lure companies to Kentucky. TherapyX, for example, is moving here from Buffalo, N.Y. The firm is looking to create a new delivery method for a Gonorrhea vaccine, and also treats cancer and autoimmune diseases.
Collabra Innovations received $150,000 from the Enterprise Angels Community Fund. The Enterprise Angels are a group of more than 40 angel investors who want to encourage the development of startups and to support new businesses in the Louisville area. Lisa Bajorinas, director of the Kentucky Innovation Network, said this is the first Louisville investment the Community Fund has made. Collabra is a technology platform that allows musicians to collaborate online.
Louisville startup darlings GearBrake also received an additional $118,000 from Techstars Mobility, Driven by Detroit, a business accelerator dedicated to mobility-themed companies. GearBrake makes a brake light for motorbikes that lights up when you slow down, making the road safer for travelers. —David Serchuk
Construction is underway, but Red Hog opening still months away
Construction finally is happening, but sorry, folks — you’re going to have to wait a while longer for the grand re-opening of Red Hog in its new Crescent Hill digs.
Co-owner Kit Garrett told IL that the Red Hog butcher shop likely won’t open until December, and the cafe isn’t expected to serve its first customer until late March 2016.
Garrett and her husband Bob own Blue Dog Bakery & Café, located at 2868 Frankfort Ave., and are reopening Red Hog at 2622 Frankfort Ave.
A previous incarnation of Red Hog used to operate in the same space as Blue Dog Bakery. Running both businesses out of the same storefront became too burdensome, Garrett previously told IL, so they shuttered the tapas operation to focus solely on Blue Dog in that space. — Caitlin Bowling
Multiple new green/eco-related fields added to Louisville MLS home listings
Good news for environmentally aware homebuyers: Eight new green search fields have been added to the Multiple Listing Service (MLS) real estate searches in Louisville. The point of these new eco-friendly search fields is to help identify green-themed selling points for homes, and help identify value for sellers, buyers, lenders and appraisers.
The Kentucky U.S. Green Building Council said these green fields help list certifications and features that indicate improved energy efficiency, water savings, responsibly sourced building and finishing materials.
The fields went live July 27, on the FlexMLS system in Louisville, with the training of appraisers and lenders to come next. Homes with green-related features could earn additional sales value, the KYUSGBG said in an official statement.
Half of the eight new fields relate to formal certifications: Energy Star Home Certification, Home Energy Rating System (HERS), Leadership in Energy and Environmental Design (LEED), and National Green Building Standard (NGBS). The other half relate to construction figures: solar panels, geothermal heating and cooling, tankless water heaters, and spray foam insulation.
Some 300 of the 860 national MLS systems have adopted such green fields. “Now Louisville sits with other progressive and sustainability-minded cities,” said Ton Ali of Cornerstone Group Realtors.
Sy Safi, owner of GCCM Construction Services, headed up the initiative to “green” the local MLS. According to Safi, buildings consume more than 40 percent of the nation’s energy. “Our goal with Greening the MLS is to convey true value for homes that cost less to operate, are healthier for the occupants, and better for the environment,” he said. —David Serchuk