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Incubator to Back, Build Female-Led Startups

Orange-based incubator and start-up accelerator Chicklabs Inc. has considerable goals: launch female-led and owned businesses, make a name for itself in the niche market of consumer products, and mentor Chapman student-entrepreneurs in the process.

Chicklabs gets office space for free at the campus of Chapman University in Orange, where it mentors students, and takes equity stakes in startups as payment for its resources and services.

Chicklabs is led by its founder and chief executive, Kirsten Mangers. Its team members describe Mangers as the “mother hen.” She founded the firm two and a half years ago after ending her career as a self-proclaimed serial entrepreneur.

“I had just successfully exited the most recent company I had created and was doing some consulting, served on a few boards, but wasn’t finding any normalcy or authenticity in what I was doing at the time,” said Mangers. “My husband finally had an intervention and told me I had become that girl with a freeway sign that said, ‘Will Work for Stock.’ He was right, and that’s when I decided to turn it into something.”

Mangers got an early start on entrepreneurship, launching her first company when she was 25 years old so that she could be more available for her newborn daughter. She sold the company when she was 30 and went back to work on the corporate side of a tech company—hiring on as one of the first five employees at what is now known as Yellowpages.com.

That led her to another tech company during the early stages of the dot-com boom. Then came the bust, and she returned to entrepreneurship in 2001 with online advertising firm WebVisible Inc. Mangers stepped down as chief executive in 2010 and was left “trying to figure out what [she] wanted to do with [her] life.”

She was on the board of Chapman University’s Leatherby Center for Entrepreneurship in 2010 when she saw the lack of support and funding for female entrepreneurs.

“I called a bunch of [venture capitalist] buddies in Silicon Valley and said, ‘Tell me why you don’t write checks for chicks,’” Mangers said. “They told me two things: one, women build companies by and for women, and men, who make up most VC firms, don’t carry the same subject matter expertise; and next, they essentially told me that women don’t speak their language—they don’t address the things men care about in their presentations.”

Mangers said Chicklabs was born as a result of these conversations.

“We decided to concentrate on women-owned, led, and funded companies,” said Mangers. “We decided to provide a team of experts and recruit people that had the vertical expertise these companies were lacking. We basically married the best pieces of a consultancy and an executive team.”

Hubs

Orange County has a handful of entrepreneurial hubs within its borders. The sector includes independent incubators and investors, such as The Vine in Irvine, San Juan Capistrano-based Frost Data Capital, and ones partnered with universities like Launch Labs at Chapman University—which shares office space with Chicklabs—and The Cove at University of California-Irvine (see related OC Insider item, page 3), among others.

Mangers said her first step was to create the team of experts that now includes:

• David Reeve, partner and head of marketing at Chicklabs, a photographer and filmmaker and a Chapman alumnus.

• Craig Torrance, also a partner and head of finance at Chicklabs, is a senior executive with more than 25 years of experience in banking and corporate finance.

• Managing Director Margot Shapiro holds bachelor’s and master’s degrees from Stanford University, an MBA from Harvard University, and has experience in investment banking and private equity.

• Mary Huber handles sales and business development at Chicklabs. She previously held management roles at large companies, such as Pennsylvania-based design firm Knoll International Inc. and Michigan-based furniture design company Herman Miller Inc.

The Chicklabs team decided to pursue a sector they felt was being ignored in the VC universe: consumer products. Mangers and her colleagues saw an influx of tech investment but a lack of firms pursuing the development of consumer products in Southern California.

She attributes this to a lack of mentors in the market, which in turn has meant fewer entrepreneurs who were willing to invest their time and money. Another factor: investors in consumer products companies tend to see typically longer exit times of seven to 10 years.

Numbers

Mangers said Chicklabs was paying attention to different numbers. Immune system supplement Airborne was acquired by Schiff Nutrition in March 2012 for $150 million. The maker of a similar vitamin supplement, Emergen-C, owned at the time by Foothill Ranch-based Alacer Corp., was acquired by Pfizer in the same year for an estimated $360 million. Sales of vitamins, minerals and supplements totaled nearly $23 billion in the U.S. in 2013 and were growing at a 5% to 7% annual rate, according to a 2013 article in The Wall Street Journal.

Mangers was introduced to Newport Beach doctor Terry O’Neil by a neighbor in 2013. The emergency room physician had invented a gum with immunity-boosting ingredients called Immuno Gum. O’Neil’s mother was the original investor and majority owner of Immuno Gum.

Mangers saw an opportunity.

“We had big pharma companies affirming the credibility and viability in this immunity market vertical, and here we were with the only gum in the entire market.”

Chicklabs hooked up with Immuno Gum, going to work on a rebranding and new packaging for its product. It announced in early August that Immuno Gum had raised $1.25 million in funding from Irvine-based Tech Coast Angels, which is among the largest angel investor groups in the U.S.

Distribution of Immuno Gum has grown from 400 stores in 2013 to an anticipated 5,000 by the end of this year. It has shelf space in chains such as Albertsons, 7-Eleven, and local Sport Chalets. Mangers said the product should be in 20,000 stores by the end of 2016.

Chicklabs exists to accelerate start-ups but also has a symbiotic relationship with Chapman University. Its interns are mostly Chapman undergraduates.

Alex Jekowsky, a junior at Chapman University, is building his company—Ulyngo.com—under the guidance of Mangers and the leadership at Chicklabs. The website will provide a platform to streamline the daily activities of college students, from online marketplaces to campus events.

“Its nice to talk to people who actually get it and can actually help you,” he said.

Mangers said the gift of being able to mentor Chapman’s students is just as rewarding as building a sustainable company from the ground up.

“It’s mutually beneficial,” said Mangers. “They are seeing the fruits of their labor in real time.”

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