Last fall, First Turn Innovations launched as a 5,000-square-foot incubator aimed at helping early-stage businesses grow by tapping the Charlotte region’s big pool of racing industry engineers, mechanics and others.
A recent shift in NASCAR rules that emphasizes standardized car design will inevitably lessen demand for people who have long made a living in the industry, says First Turn co-founder Kevin Mahl. He is a veteran of more than 20 years in racing as CEO of Cornelius-based Champion Tire & Wheel, which transports equipment for NASCAR teams as they travel to tracks nationally.
“With NASCAR Next Gen coming, there is a lot of intellectual talent that will be displaced,” referring to the racing circuit’s new race cars slated for the 2022 NASCAR Cup Series. “The motivation behind forming FTI is having a place to harness that talent.”
The sport has a multibillion-dollar economic impact across the state but is concentrated in Cabarrus, Iredell and Mecklenburg counties. “Its economic impact is felt far beyond the track,” says Craig Depken, an economics professor at UNC Charlotte.
He cites wind tunnels used by engineers and teams in aerodynamic car design, machine and parts fabricators, and coating and paint manufacturers.
Mahl, co-founder Jeff Schultz and five other First Turn partners are offering a variety of services, including marketing and manufacturing space, fabrication expertise and prototyping. Schultz is a former college professor who cofounded and leads a bioengineering firm. He had a chance meeting with Mahl that led to discussions about creating First Turn in space that Mahl owns.
“We’re completely a hardware incubator,” Schultz says. “Mobility, manufacturing and measurement are our three core pillars of focus. This is straight down the middle of what the performance-driven NASCAR ecosystem is good at. We feel like there’s a good niche for hardware-based incubators, especially in this area.”
Specialized niche
First Turn’s niche is different from other Charlotte area incubators, which mainly focus on financial technology and SaaS, (Software as a Service), says Schultz. “Hardware is something that a lot of VCs generally stay away from because it doesn’t scale as fast as software. It takes a lot more capital than writing code, and it generally takes more time.”
First Turn has fielded nearly two dozen applications from entrepreneurs in the first few months and is working on nine projects as of early December. Joel Poindexter’s SUP-v, a stand-up paddle board vending system, is one of the initial collaborations. The Cornelius resident had kicked around the concept of a paddle board kiosk that serves recreational areas for years.
He saw benefits in tapping into resources made available by First Turn’s founders. “The network here is much greater than mine,” Poindexter says. “With connections, access to capital, engineering and mentors, it’s just a good fit.”
First Turn’s intent is to gain equity in its partners’ businesses, not just act as consultants. “We expect to share in the success of the startups we work with,” Schultz says. “In getting them ready to either launch a business or pitch a Series A [early stage round of fundraising.]” In many instances, that involves receiving warrants, which are options to buy shares at a set price over a specified period of time.
Ultimately the business must fit into the mobility, manufacturing and measurement sphere and be headed by entrepreneurs who are a good fit with First Turn’s leaders, Schultz says. “We don’t want to take a position in a company where we don’t feel like we have value add in terms of commercial or technical knowledge.”
The organizers arranged a separate equity fund that is managed by LaunchLKN (LLKN), a Mooresville-based nonprofit that promotes entrepreneurship in the Lake Norman area of north Mecklenburg, Iredell and Lincoln counties. “LaunchLKN serves as the general partner and manages FTI Capital to support projects FTI incubates,” says Mark McDowell, a co-founder of the group.
Mahl is a director on LaunchLKN’s board and a member of its investment committee that makes funding decisions.
Mahl has a succinct vision for the firm. “We want to enjoy the successes of where this thing can go,” he says. “That’s our motto.” ■
