July 8, 2020
Launch NY Marks First Qualified Opportunity Fund Investment
Buffalo, N.Y., July 8, 2020 – Launch NY’s Investor Network closed on the first widely available Qualified Opportunity Fund (QOF), investing in an operating business in the region to bring accredited investors together to fund 3AM Innovations, a Buffalo-based startup that provides a wearable tracker for first responders in the field during crisis situations.
3AM Innovations, which has created FLORIAN, a tracking and monitoring platform that delivers real-time information direct to incident commanders, received investment from three additional sources led by Launch NY: a separate Special Purpose Vehicle from Launch NY’s Investor Network and follow-on funding from Launch NY’s Nonprofit Seed and for profit Limited Partner (LP) Funds.
“With our focus on serving companies located in low-income areas, we knew that Opportunity Zone tax incentives should be a huge way to attract capital gains-driven investment. Given our unique position serving entrepreneurs and investors, our volume and infrastructure provides a way for a broad group of investors to jump into these deals using their capital gains but avoiding the burden of having to figure it out themselves,” said Dr. Marnie LaVigne, President and CEO of Launch NY.
Combining all four sources of funding from its #investlocal Financing Programs, 3AM Innovations received a total of $100,000. The company worked with Launch NY to qualify their eligibility as a Qualified Opportunity Zone Business.
“This is a perfect example of utilizing all of the programs and incentives at our disposal and creating a win-win situation for both our investors and portfolio companies,” said LaVigne, who added that 40 percent of Launch NY’s current seed fund portfolio companies are located in designated Opportunity Zones.
With headquarters on Goodell Street in downtown Buffalo, 3AM Innovations is located in an Opportunity Zone, a government investment tool that encourages long-term investments in designated low-income communities to create economic transformation. Opportunity Zones provide a series of graduated tax incentives to investors who re-invest capital gains into Opportunity Funds that subsequently invest in eligible businesses and property in the designated communities.
However, the complexities of meeting the requirements around operating business investments have limited their availability compared to real estate transactions, until Launch NY introduced its Investor Network in 2019 as a natural channel for eligible companies and investors to connect. Qualified Opportunity Funds are positioned to play a vital role in the economic recovery in the wake of the coronavirus pandemic.
3AM Innovations CEO Patrick O’Connor, a former volunteer firefighter, had noticed the tracking technologies stations used on first responders had not changed much over the years, and together with COO Ryan Litt, a software and hardware development expert, set out to create a platform that processes data directly to an app without the use of internet.
Litt said 3AM Innovations has focused on furthering its global reach, with travel to Australia earlier this year, developing opportunities with some of the biggest fire departments in the country and conducting multiple pilot programs with support from AT&T. It’s also getting ready to kick off a joint project with the Israeli Fire & Rescue Authority and US Department of Homeland security next month.
“From disaster relief to disease mitigation, first-response is a societal constant and we’re working tirelessly to connect the world’s best firefighters to the world’s worst emergencies,” said Litt. “We believe the only way to save lives is together.”
The company is planning to use Launch NY’s investments to expand their workforce, something that Litt is especially proud of in these uncertain times.
“Now that we’ve achieved product market fit, it’s all about acceleration,” said Litt. “We’re fully focused on investing in people, with Launch NY’s investment becoming an investment in 3AM Innovations’ human capital. We’ll ensure it creates economic and social returns for their fund and our communities.”
Since joining Launch NY in 2017, 3AM Innovations has raised $2.4 million.
For more information about Launch NY, its programs and other entrepreneurial opportunities, visit its newly-redesigned website at www.launchny.org, and follow Launch NY on its Facebook, Twitter and LinkedIn pages.