Excell Partners CEO Theresa Mazzullo projects her enthusiasm as she discusses the opportunities for business startups in Upstate New York. It’s an enthusiasm that hasn’t waned since Mazzullo began her work at Excell over 15 years ago.
The sixteen-year-old fund provides seed stage investments of up to $1.5 million for initial funding in new companies started in Upstate New York and the Finger Lakes region. The fund was created at a time when Upstate NY was invisible to the venture capital community. The Capital Gap was creating a phenomenon known as the “Valley of Death” for high tech companies looking to commercialize their technologies. When Excell Partners debuted, they were inundated with deal flow from scores of entrepreneurs from every corner of the area: Ithaca, Buffalo, Rochester, Syracuse and the Finger Lakes.
“The demand far exceeded the supply,” Mazzullo says. “When we started looking at the stats and realized the untapped potential in upstate, we knew – this is a story that needs to be told.”
The Stats Tell the Story
Mazzullo has a 30-year track record in business, finance and entrepreneurship so she knew she had to help others understand the problem – perhaps better described as the opportunity – that Upstate NY faced.
That started with some basic numbers: New York State ranked second in the amount of academic research and development in the United States – second only to California – but New York received 10% of venture investment nationwide, while the Golden State received over 50%. Although R&D was roughly evenly split between upstate and downstate regions, of the 10% invested in New York, 99% was going to Downstate and Upstate was only getting 1%.
Armed with this knowledge, Excell launched a campaign to get venture capital flowing in Upstate. “I think it is safe to say that Excell played a singular role in educating and advocating for legislation to establish the first state supported seed fund in New York State’s history. We could not have done this without the support of our partners in academia, corporate and government. A special callout must be made to our former Senator Michael Nozzolio whose leadership was instrumental in bringing access to capital into Upstate New York” Mazzullo says.
Over the last 16 years Excell has been the top seed funder in the region, leveraging the hotbeds of innovation and talent available in the upstate region.
With 19 colleges and universities in the Finger Lakes region, Upstate New York has a wealth of talent and a torrent of new ideas coming from its campuses. Mazzullo recognized that the untapped potential of those students and recent graduates could spark a resurgence in the local economy.
“There is an incredible amount of academic brainpower that makes us unique,” she said. “That young talent translates into a young workforce, and that young workforce has fresh, new ideas and ways to approach problems that can be solved in innovative ways. As our high tech startups grow and create new jobs, there will be opportunities to harness this brainpower and keep it in our region.”
In the Spring of 2021, Excell Partners was featured by Viewpoint TV hosted with Dennis Quaid. Titled “Rochester on the Rise” this is a story about how a successful collaboration between academia and government served as a catalyst for launching a regional innovation ecosystem.
Capital, Connections, Commitment
As its motto states, Excell’s model focuses on three key aspects to helping its clients succeed: capital, connections, and commitment. Excell leverages its connections on the local, state, and national levels within academia, government, corporations, and finance to advocate for their clients and for the region.
Excell doesn’t operate on a “fund ‘em and forget ‘em” model for capital. Excell Partners COO Rami Katz says “We become a part of the business so when things are good, we’re there to celebrate with them, and we’re there for them when things get tough, too.”
Prior to joining Excell, Katz served as the Director of Technology Commercialization at High Tech Rochester (now known as NextCorps) where he worked closely with entrepreneurs, researchers and startups to evaluate the commercial potential of new technologies.
Rami earned his MBA from the University of Rochester and his law
degree from the Tel-Aviv University in Israel. After launching his own legal and management consulting practice in Israel, Rami was one the founding members of a seed stage investment group, investing and assuming leadership roles in seed stage technology ventures to provide financial and business development management.
He now applies that knowledge to his work at Excell Partners.
Knowing that startups will likely have to obtain additional funding months or years after the seed round, the fund doesn’t commit all of its financial assistance to the first round. “We try to keep ‘dry powder’ available for follow-on funding so that the businesses don’t lose steam and progress as they’re moving forward in advancing their technology,” Mazzullo notes.
Its commitment is also lasting. Excell helps with corporate governance by taking positions on the new company’s board of directors to provide experienced leadership, financial guidance, and sound advice to entrepreneurs who may find themselves in unknown waters as their businesses grow and scale.
A Model That Works
The group has been a steady and significant investor in RealEats, a prepared meal delivery service dedicated to reducing waste while providing chef-created meals.
RealEats has secured $16 million in Series A funding led by another investment firm, Hamilton Lane, that also manages money for a New York State pension fund. RealEats has also entered into a partnership with global health and wellness retailer, GNC, to offer RealEats prepared meals through their website.
Another Excell success story is a professional e-sports company Splyce who merged with OverActive Media, a publicly-traded Canadian firm that staged a League of Legends esports tournament at Madison Square Garden, drawing more fans to the venue than the NCAA basketball Final Four tournament.
Splyce was funded via the Minority- and Women-owned Business Enterprise Fund, a small statewide $2 million fund that has invested in six enterprises that together have created more than 180 jobs in NY state.
The Minority- and Women-owned Business Enterprise Fund is a point of pride for Excell. Katz mentioned that the firm is proud to manage those investments. “We look for really great ideas. There’s quality opportunity for investments in all the underserved populations. It’s actually better because other investment firms are not mining there.”
Katz went on to say, “What’s unique about how Excell Partners operates is its diverse backgrounds. We’re led by a woman, I’m from Israel with a diverse ethnic background, and we have people from all over the world working here.”
“We’re looking for the best and the brightest of everything – regardless of a founder’s background,” says Katz.
“We’re only just beginning here,” Mazzullo says. “There’s just so much more, and I’m excited to be a part of it. I think the only thing missing is for us to believe in ourselves and to make this happen, to step forward and go for it. I’m excited to watch the success grow in our region.”