NWA Council’s Serafina Lalany sees startup scene on uphill trajectory

If Arkansas wants to take entrepreneurship to new heights, the best bet is to put its startup companies on rocket fuel. As fate would have it, a one-time Houston resident — home of the nation’s mission control for space flight — may be the critical rocket scientist to help launch the next generation of power companies in the state.

Meet Serafina Lalany, executive director of the Northwest Arkansas Council’s StartupNWA, which oversees VC Immersions and Onward HQ.

After passing on medical school, she went to work for her first startup ride, a biotech firm in Boston that went from 14 people to 1,000 people in less than two years. She was moonlighting as a DJ and that landed her a gig at SXSW, where she met a group of entrepreneurs from Houston, where she had spent time growing up. Once there, she became deeply, and surprisingly, immersed in the startup scene that was really taking off.

Lalany was part of the executive team at Station Houston, the city’s first incubator, and helped seed-stage companies reach Series A milestones on the platform team at the Mercury Fund, an early-stage venture capital platform that has funded numerous successful startup businesses. She then moved to executive director of Houston Exponential (HX) and helped build a community of 25,000 startups and investors, growing venture capital investment to over $2.4 billion in five years.

Lalany landed in Northwest Arkansas when her husband’s bike tech startup came to the region. With her background, she reached out to a venture capital (VC) firm in Tulsa and started consulting in Bentonville. She was surprised to find how many startups existed.

“There was a lot happening, mostly underground,” she said. “And when I got here, I had the most incredible experience meeting with entrepreneurs and meeting with my customers. I had days where I had 10 back-to-back sales calls on 24 hours notice. And then the craziest thing happened — they would introduce me to their peers. And that’s just a testament to Northwest Arkansas and its spirit and culture. I’ve worked in other communities — Boston, Houston, other major tech hubs — I’ve never experienced what I experienced here before.”

She took a sabbatical from her consulting job and reached out to company founders in the region and discovered they all had a common concern. There was no central place for advancing startups to network, collaborate and position themselves for the next phase of growth.

“This is where the idea for Onward HQ was born,” Lalany said. “We needed at least a hub for some of this activity. There’s a lot of accelerator programs and other programmatic initiatives that are mostly time-bound to usher founders from point A to point B. But then what’s life after that? We think this is where that journey continues.”

ONWARD & UPWARD
Onward HQ is a space on the Bentonville Square, a block away from Sam Walton’s original 5 & 10 store. What better place to find inspiration than the birthplace of one of the most successful companies on the planet.

The second floor space houses small offices for about 25 companies with a central lounge area and working tables for collaborative interaction.

Onward HQ offers three levels of membership, which can allow participants to join a Slack community, attend member-only events, mentoring and PR support, private investor pitches, access to coworking space and conference rooms.

“Onward was really born out of where a lot of great ideas come from: the back of a napkin over drinks,” Lalany said. “A bunch of entrepreneurs and I were meeting and talking about this gap in the community. We don’t have a third place, a place where you can bump into your potential co-founder or investor, a place where you can build shoulder-to-shoulder with other entrepreneurs that are all around the same stage.”

“Almost all of the companies here are building towards series B milestones, becoming 20- to 100-person companies,” she said. “There’s really no place for companies at that stage to all learn and grow together. Then you can have that kind of engineered serendipity you find in places like San Francisco or Austin where you just by happenstance bump into someone that changes the trajectory of your company.”

A month ago, Onward HQ hosted an investor matchmaking series through the NWA Council’s VC Immersions. The unprecedented event brought to town 40 venture capital firms with more than $2 billion in assets under management. About 250 entrepreneurs from 32 states and four countries attended with 27 companies being from Arkansas. It was a smashing success.

Lalany said the region no longer relies on two to three big VC events a year to connect with investors. She said her group is hosting a VC in town “literally every week” because word is getting around about the quality of the startup companies and culture in Northwest Arkansas.

“It’s not quantity; it’s quality,” she said. “I think the last cycle we had 480-ish companies apply. We passed 120 to the final round, and then 100 of them were chosen for one-on-one meetings. By the time you’re sitting with me and I’m sitting with you, the investor knows everything you need to know about me, the startup, because StartupNWA has done the work of creating an investment memo on this company. We’re handing you a dossier, and you have selected to meet with this company. It’s the equivalent of your second or third meeting, so deals are just happening much faster.”

FUND OF FUNDS
What’s next for Onward HQ, VC Immersions and StartupNWA? Lalany says “planned obsolescence” is frequently used. She wants companies to come in the space, scale up, find investors and move out.

“That’s perfectly fine,” she said. “We want that to happen. We want that to happen as quickly as possible. In fact, I think one of the things that will be top of mind for us over the next 24 months is what that looks like at scale. I believe an innovation district — like what you see in markets like Cincinnati, Chicago, Houston, and Austin — having all of our regional assets, the accelerators, the incubator spaces like this, all the programmatic elements under one roof is next.”

She also expects VC Immersions to expand to central Arkansas. It is a system that she contends can be replicated anywhere. Working with state leadership, Lalany says there will be a VC Immersions event in Little Rock in October.

“We’re just going to continue to iterate and make small improvements, but also scale it broadly,” she said.

There is also an effort to create a “Fund of Funds,” a huge, pooled investment vehicle supported by well-known corporations that are striving for innovation and the next generation of game-changing companies.

“The next big initiative of the NWA Council is the Fund of Funds, which is basically a pooled investment vehicle, $50 million, that we will raise from corporate entities, the logos that you can imagine and put that capital to work in other venture firms,” Lalany said.

“This is a best practice that I actually saw firsthand in Houston where we did this model there,” she said. “In the top-performing venture firms across the country that are also aligned with the kinds of companies that we have growing out of our region, we know there’s a gap of early-stage capital here. It is just a fact.”