Fueled by a burning desire to provide investors with alternatives to traditional investments, Jeff Ransdell, Co-founder and Managing Director of Rokk3r Fuel ExO, retired from Merril Lynch to launch a venture capital firm focused on technology companies experiencing or capable of exponential growth. Ransdell shared the story behind his journey, explained why he chose Miami and listed the ingredients necessary to create entrepreneurial ecosystems capable of transforming entire communities.
“Ever since I was a kid, I had the entrepreneurial spirit,” Ransdell said. “I started my first business when I was 14 years old and by the time I was 24, I built and sold four successful companies. In 1994, I took a job with Merril Lynch where I spent time as an Analyst, Portfolio Manager and eventually one of six Divisional Executives reporting to the head of Global Wealth Management. My region included Florida, Alabama, Georgia, Latin America and the Caribbean.”
Ransdell continued, “When I started with Merril Lynch, we didn’t have Bloomberg or CNBC. Information wasn’t as free flowing as it is today. By 1999, it was clear that technology would continue to ‘flatten the world’. I started to see how free flowing information would affect the United States, other countries and how investors thought about their portfolios. In the past, if the U.S. was in a recession, Japan might be okay. With the world becoming more democratized, that was no longer the case. All asset classes were becoming increasingly correlated, yet we were still talking to our investors the same way we always did. That bothered me.”
By the mid-2010s, Ransdell’s frustration with traditional investments and conversations with clients had reached a tipping point. According to Ransdell, wealth managers and advisors weren’t keeping up with the times. Investors needed to be consulted with differently.
“We were talking about all the same things we talked about for the last 50 years,” he said. “Stocks, bonds and cash could now be purchased on a smart phone for free instead of calling it into your broker. I became increasingly interested in companies looking to disrupt traditional ones. Within this space I saw gaps and things I felt were missing in venture capital. After 20 years on Wall Street, I felt the time was right to put together a team, with Wall Street experience and tremendous credentials, to focus on venture capital and bring traditional discipline into an asset class that was missing it.”
Rokk3r Fuel ExO was officially launched in Miami, FL, in 2017. Ransdell first moved to Florida in 2001 while still working for Merril Lynch. For many reasons, he was convinced, despite plenty of skepticism, that Miami was the perfect place to launch a new venture capital firm.
“Florida, in general, has a lot of retirees and a lot of wealth,” Ransdell said. “However, in 2017, when we launched Rokk3r Fuel ExO, the thought of starting a venture capital firm in Miami was unheard of. Nearly all of the incumbents were in Silicon Valley. However, coming into this space, I wanted to tell a different story. I wanted to conduct ourselves differently, while differentiating ourselves from the rest of the pack. I wanted to build the firm where I thought the future would be. With Miami’s proximity to Latin America, international dynamics and affordability, especially compared to Silicon Valley, it was the perfect place to start this business. It was also a massive opportunity to become a ‘bridge’ to people in Silicon Valley.”
Since the start, Rokk3r Fuel ExO’s investment thesis hasn’t changed. They’re agnostic, in terms of industry verticals and geographic location, but laser focused on exponential technology and companies experiencing double and triple digit growth. As Ransdell shared, much of their work goes into finding these companies and understanding their common thread.
“Airbnb is a good example of the type of company we’re after,” Ransdell said. “They don’t own anything. It’s a technology company that connects consumers to property owners. In six years, Airbnb grew to the same level that Hyatt took 60 years to get to. That’s a great example of exponential growth. What we’re focused on is breaking those organizations down to understand their commonality. Once you find that ‘secret sauce’, you hunt for other similar companies. Through information sharing and democratization, the world has become much flatter. This allows us to hunt for ‘diamonds in the rough’ around the globe.”
Ransdell was recently invited by the president of Ecuador to speak about innovation. During his visit, he stressed the importance of creating inspiration, leading by example, making capital available and establishing a ‘tether’ to act as a safety net for those entrepreneurs that become inspired and take action.
“People need to know there are others that can help them,” Ransdell said. “Entrepreneurs may not know the debits and credits or how to properly build a presentation deck to help them raise money. There needs to be a community in place to provide assistance. Inspiration is not enough. With people you can count on, you’re more willing to take the leap. Once they feel supported and comfortable moving forward, the next most important piece is capital. They need the fuel to get to where they want to go. Silicon Valley is a good example of this. They built a community where people come together, share ideas and, collectively, support the movement. We’ve grown an incredible ecosystem here in Miami, but we need more people to lock arms and create that safety net.”
Ransdell shared that despite an incredible career with Merril Lynch, that included training and educational opportunities few are privy to receive, the joy and excitement of running a venture capital firm has renewed his zest for work.
“I can’t wait to get up in the morning,” Ransdell said. “I even have a hard time going to bed at night. I love being able to use my creativity to figure out problems and make things more efficient and effective. We’re doing some amazing things for investors through our portfolio of innovative companies. For example, one such company, OhmniLabs, builds robots and avatars in the telepresence, education and telecommuting space to improve communication and allow family members to be closer to one another.”
Looking ahead, Ransdell and his team are focused on bringing returns to investors that would normally take a lifetime to achieve. They’re also focused on creating additional funds that, once fully funded, will total a billion dollars. Rokk3r Fuel ExO will also continue to partner with registered wealth advisors as a way to reach more investors. According to Ransdell, forward-thinking advisors recognize that by aligning with venture capital firms, they’re able to help their clients diversify their portfolios by investing in the creative economy. “It’s an asset class deserving of a place within everyone’s portfolio,” he said.
What advice does Ransdell have for aspiring entrepreneurs? “Life is short and very fragile,” he said. “If you really have something that’s on your mind, but you’re worried about the leap of faith, you have to take it. You have to believe that bridge will be there. Also, align yourself with others you admire or who have crossed that bridge. When you have that conversation it’s like someone picking up gravel and throwing it onto the bridge to expose it. Once you decide to move forward, go like hell and never give up. Envision a massive flywheel. Every day you go to it and put pressure on it. Some days it never moves and you get frustrated, but you keep trying. Then one day the thing starts to move and then it gains momentum and then it runs on its own. You have no idea when it will start or what will start it, but you have to continue to push that flywheel.”
Ransdell continued, “From a venture capitalist perspective, if you’re seeking funding, it’s important to understand who the general partners are of the funds you’re going after. It boils down to the founder doing some interviewing and research on the firm to understand what they’re like. Also, reach out to the current portfolio companies and ask them about their experience. If all that aligns, then you should reach out to them. However, it’s important to understand that most VCs won’t give you money. Only the top quartile of companies get funded. First start with friends and family to gain some traction and then move on to angel investors. From there, you can take a shot at venture capital.”