Then & Now: Mark Wagstaff returns to venture capital firm

by Jeff Della Rosa ([email protected]) 482 views 

Editor’s Note: The following story appeared in the May 11 issue of the Northwest Arkansas Business Journal. “Then & Now” is a profile of a past member of the Business Journal’s Forty Under 40 class.

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Mark Wagstaff’s career has been marked with good opportunities, and it’s led him nearly full circle over the past 12 years.

While he wasn’t planning to sell his business, Wagstaff received an offer he couldn’t refuse when he sold AAA Business Systems in 2016.

Two years later, he returned to the company that brought him to Northwest Arkansas in 2002. Wagstaff, 47, is vice president of operations for VIC Technology Venture Development, formerly Virtual Incubation Co.

In 2008, he purchased AAA Business Systems, a $3.5 million revenue company offering office technology products and services. Wagstaff managed the business through a difficult economic period that started shortly after he acquired it, and in 2010, he was named to the Northwest Arkansas Business Journal’s Forty Under 40 class. Selling his business has been the highlight of his career thus far.

After he sold his business, he spent a year teaching accounting and business management classes in the Sam M. Walton College of Business at the University of Arkansas.

Meanwhile, he learned to become an investment adviser representative and joined WealthPath Investment Advisors in April 2018. About a month later, he returned to VIC.

“The reason why I left there the first time was just I wanted to go out on my own,” Wagstaff said. “We get involved in a lot of cool new technologies, and so I was excited to come back. Also, I liked working with the president, Calvin Goforth.”

He rejoined the company to oversee finance and administration for VIC Technology Venture Development and 12 other small companies, who are clients. Wagstaff said a lot of the work involves client fundraising, including acquiring grants, and more recently, money from the Paycheck Protection Program (PPP) to allow companies to pay their employees during the COVID-19 (coronavirus) pandemic. The client companies for which he provides accounting services comprise 45 employees. VIC has 12 employees.

The company has 16 existing clients in various development stages and works almost exclusively with universities and from their technology develop a business. It offers startups between $250,000 and $500,000 in seed money and maintains partial ownership in the companies in which it invests.

The company primarily invests in healthcare-related technology, and some of its clients include Fayetteville-based SFC Fluidics Inc., BiologicsMD and Tesseract Structural Innovations Inc.

The ultimate goal for the companies is to provide a return on investment for investors through acquisition by a larger company. One company was acquired last year, and before the pandemic, two or three were expected to be sold. But it might only be one more this year as people have been slower to invest because of the health crisis. As a result, the company is seeking more funding through government research grants.

In 2019, the company raised between $2 million and $3 million for six companies. While the money it raised last year exceeded the amount it raised in 2018, this year doesn’t look as hopeful because of the pandemic. But the company’s model has allowed the companies in which it invests to not fail as a result of funding issues. And for those who invested in the company that was sold, the return on investment in three years was four times their invested amount.

Over the next three to five years, Wagstaff hopes to add between three and five businesses as clients annually and increase the number of client companies to 30. This year, the company added two before the pandemic, and he hopes to add at least one more this year.

The Fayetteville-based company has grown from initially working with the University of Arkansas and to working with other universities across the nation. The company, which was established in 2000, also has offices in Albuquerque, N.M.; Baltimore; Boston; Boulder, Colo.; Dallas; Houston; Phoenix; and San Diego.

Wagstaff and his wife, Heather, have five children and reside in Fayetteville. He is a member of the Church of Jesus Christ of Latter-day Saints and serves on a group overseeing the nearly 200 missionaries throughout the region, which includes southwestern Missouri. He enjoys traveling and spending time at Beaver Lake.

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