Hey Flywheel, What's Your Business Model

Flywheel is in the business of helping startups develop their business model so it’s only fair to ask us about ours. Long time Flywheelers will remember we started as a nonprofit fee-for-service consulting organization. Our mission was to help other nonprofits address business challenges. We charged for our services but it was a below market rate that nonprofits could afford. Business model number one.

Along the way we had a realization, you don’t have to be a nonprofit to do good in the world. We expanded our work to include a business accelerator serving for-profit and nonprofit social enterprises. Our first cohort included La Soupe and it’s founder Suzy DeYoung. She had outgrown her original business model, buy-a-soup, give-a-soup. She came to Flywheel looking for guidance to grow and scale. To date, La Soupe has kept 3 million pounds of food out of the landfill and used it to create almost 2 million meals for those in need.

Another alumni company is Mindfully, a for-profit near-peer counseling platform designed to provide early stage behavioral health support for young girls. It was the right product at the right time when the pandemic hit. Founder Lydia Henshaw grew her business quickly and was approached with an offer to buy her company. A deal that provided Lydia and Mindfully the resources to grow bigger, faster.

So about our current business model. Flywheel starts by making a revenue based investment in the companies in our accelerators. These days we run two programs. One is for companies addressing sustainability and the other for equity focused enterprises. They use the money to help with business growth expenses. When they produce revenue, they start to pay us back with a multiple negotiated in advance. Two have paid us back completely, most are making progress at a slower pace. The investments are a growing piece of our revenue mix. Still not enough to cover the real cost of our programming and investment….at least not yet.

We benefit from a group we call our Philanthropreneurs®. These generous donors pledge $5,000 or more to Flywheel knowing their gift will support our entrepreneurs and when that business is successful, it will also support Flywheel. It’s the gift that gives twice. Overtime, we hope to have enough investments in winning companies to make this a self fulling fund.

If you would be interested in becoming a Philanthropreneur® please contact me. I would be delighted to get to know you and your goals. We also offer benefits such as membership to the Angel Capital Association with its suite of valuable tools for Angel investing. You’ll also have the opportunity to meet each other and our founders, being on the ground floor of opportunities to invest in our companies.

Our business model also relies on the support of corporate sponsors and philanthropic grants. Our 2022 supporters include, Carol Ann and Ralph V. Haile, Jr. Foundation, Greater Cincinnati Foundation, United Way of Greater Cincinnati, Barnes Dennig, Dinsmore, Donovan Energy, Electrada, EY, E.W. Scripps, First Financial, Madtree Brewing, Miami University, Michelman, Queen City Angels, University of Cincinnati Center for Entrepreneurship. We also have a growing group of private donors supporting us at a level that suits their ability. We are grateful for their commitment to our mission to make a more equitable and sustainable community through entrepreneurship.

Thank you to everyone who has supported Flywheel this year and in the past. Together we have helped launched 29 companies that are doing well while doing good.