Freightquote, Edison Factory founder-turned-investor touts ‘work ethic worth investing in’

Raise and raise relentlessly. Because in business, the sun won’t shine every day, Tim Barton told a room filled Wednesday morning with entrepreneurs and investors eagerly seeking support and insight at the 20th InvestMidwest Venture Capital Forum.

The former CEO of Freightquote, who saw a $365 million exit for the company in 2014 before launching Edison Factory and such ventures as Edison Spaces, Edison District and Menlo Food Labs, spoke from the perspective of a founder-turned-investor, he said.

“When I find entrepreneurs who want all the control and don’t want [me as an investor] to have any input, I think that that’s the lesson — let them have their ball and go away. Just don’t deal with it! ‘Going once, going twice’ … ” said Barton, asked about his investment strategy during a Q&A session that followed his keynote address at the funding forum.

Narrowed from a list of 140 applicants, five Kansas City startups were among 36 companies from 15 states chosen to pitch their work to a collection of investors during Wednesday’s InvestMidwest event.

Area startups in the spotlight included; Overland Park-based hauling app Bungii; Olathe-bred immunotherapy solution ELIAS Animal Health; Kansas City-sourced electronic medical record service iShare Medical; Overland Park insurance efficiency software RiskGenius; and Kansas City-run hearables creator EAR Micro Bionics.

Click here to read more about Bungii and Risk Genius — two of Startland’s 12 Kansas City Startups to Watch in 2019.

Keep reading after the photo gallery.

Barton lauded the Midwest startup and investment communities in his InvestMidwest morning keynote remarks.

“If you look at the West Coast and all of [those] Tech Crunch deals and everything else, it creates a bit of a frenzy and everybody wants to be a unicorn and everybody wants to drink the West Coast Kool-Aid,” he said of opportunities startups have in Kansas City and across the region. “I don’t really feel that way in Midwest — as a Midwesterner — and I think of building businesses for cashflow. I think of building businesses to create opportunities for customers, for employees — or every participant in a business.”

Tim Barton, Edison Spaces

Such a mindset helped Barton build Freightquote to exit — without an exit being his end goal, he said.

“I would say in hindsight it’s nice to sort of reap what you sow. You’re building businesses and investing in businesses. Everybody likes an exit, right? I mean, they’re better than the alternative,” Barton told a chuckling crowd. “I aspired to try to build [Freightquote] much, much bigger, much, much longer than it needed to be. And I could have probably sold it five years earlier, seven years earlier. … [But remember] you’re building businesses either to be the acquirer or to be acquired. So, I think it’s important for advisors … to remind [founders] of that bargain that you make when you invest [you want your money back.]

Citing cash on demand, there’s no shortage of funding available to midwestern founders — so long as they put themselves out there and create opportunity, Barton added.

“When I raised a Series A round for Freightquote in ’98 or ’99, the West Coast guys who did invest we’re saying … ‘What are you doing in Kansas City? We don’t do that. That’s just bad!’”

The volume of employees Barton needed to grow his company couldn’t economically be found in California, he said.

“Today, every California tech company is moving their jobs to Austin, Denver, Nashville, Kansas City, anywhere but California,” Barton said. “The reality is, there is good tech, there is good ecosystem stuff in California, but the Midwest is a place with hardworking people that show up for work at 8 a.m. and leave at 5 p.m. That work ethic is worth investing in.”

Tim Barton, Jessica Renfrew, and Matt Druten, Edison Spaces

Seeking investments for his own projects Wednesday, Barton slipped in a quick pitch for his latest venture — the Edison District — an Overland Park ideation complex that will boast office space, retail shops, living, dining, and event spaces. It’s a spin-off of his already successful Overland Park shared office Edison Spaces project with co-founder Matt Druten, he explained.

“We started this concept before WeWork was really a household name. … There wasn’t flexible office space for startups,” he said. “We started Edison Spaces specifically in the suburbs, because we figure if you have two to four people in a startup and you’re in the suburbs, you don’t really want to drive to downtown anywhere.”

An innovative addition to the often corporate feel of Johnson County suburbia, Edison District has become the central focus of Edison Factory — Barton’s investment and consulting firm, dually headquartered in Kansas City and Austin, Texas. Click here to learn more about Barton’s adventure in building the Edison District.