Judy Sindecuse is a visionary leader with a proven track record of starting successful companies. After obtaining a JD from Harvard Law School and a BS in Mechanical Engineering from Southern Methodist University, Judy founded seven different businesses, each of them profitable within six months.

As founder and CEO of Capital Innovators, Judy now helps companies and founders reach the next level in their business. Capital Innovators, founded in 2010, is an accelerator that has invested in more than 100 startups. Capital Innovators’ impact on the St. Louis Startup Ecosystem does not end with early-stage funding. Many of the entities that now comprise this robust ecosystem that has been ranked as high as #1 can trace their birth back to Capital Innovators. Additionally, the 120+ companies in the Capital Innovators portfolio have gone on to raise over $330 million in additional funding and to create more than 1,300 jobs. These accomplishments and more have earned Capital Innovators many accolades, including being ranked as a top accelerator in the country for all five years the rankings have existed.

Additionally, Judy serves as a strategic advisor in innovation for two Fortune 500 companies, including a major utility. She serves on several private boards and on the advisory board of a public bank and a major university. Judy is also a director on the board for Cortex, the nonprofit organization that is responsible for the rapid real estate development of the innovation district in St. Louis City.

Judy, a Missouri native, lives in Weldon Spring with her sons Adam, a senior at the University of Missouri – Columbia and Justin, a sophomore at the University of Southern California.  

Business Today (Grace Hong): Let’s start off with your background. You attended undergrad in Texas, you studied law at Harvard, and now you’re the founder and CEO of Capital Innovators, which is based in St. Louis. You’ve also been CEO of several other companies in between. Can you talk a little about how you got to where you are today?

Judy Sindecuse: I went to SMU for my undergraduate studies and majored in engineering with a minor in math. Following undergrad, I proceeded to law school where I actually thought I would become a prosecutor. My plan after graduation was to work at a large firm, gain several years of experience, pay off my student loans, and then work at a U.S. Attorney’s office. During my first year as an attorney, I came up with an idea for a business—as an aside, I actually started my first business in college, and I sold it to go to law school. I realized that there was no way I could practice law and run a business at the same time. I was pretty excited about the idea, so I left the practice of law to go start the business. In the course of running that business, I had a problem that needed solving to make that business successful, and in solving that problem, I realized that the solution could become its own business. The same thing happened several more times where I ended up creating a new business to solve a problem with the current business I was running. All in all, I ended up creating six businesses before I moved to St. Louis, which is my hometown, to raise my kids.

While I was working on my next business idea, I began volunteering at a non-profit that helped launch early stage IT companies. I had already been doing some of my own investing in IT companies, and through the course of volunteering, I realized there were quite a few companies in the program that had smart, passionate founders sitting on really great ideas. However, they weren’t getting the funding or mentorship they needed in order to get to the next level—or at least, not enough to encourage a stranger to invest in their business. I told the CEO of the non-profit that I had an idea on how to alleviate this problem: they should gather a bunch of high net-worth individuals who had already built their own businesses to not just invest money in a small fund, but also mentor these companies using their expertise. I planned to structure the mentorship more efficiently than what I had seen happening in other non-profits that sought to accomplish the same thing. The CEO of the non-profit thought it was a great idea, but when I tried to do it under the non-profit umbrella, investors said that they didn’t want to do it because they wanted to have the capacity to earn a return. I went back to the CEO with this information and she encouraged me to do the idea privately, and that is how Capital Innovators was born.

This was back in 2010 when the moniker “accelerator” was just being formed. Nobody had used that terminology before. In fact, these programs didn’t exist at the time. It wasn’t until a year after I started the company that I was introduced to one of the founders of TechStars—which coined the phrase “accelerator program” —that I realized I had created an “accelerator”. Importantly, my model doesn’t look like other accelerators because at the time I started Capital Innovators, there weren’t really any other accelerator models to copy. I was really just trying to solve a problem that existed in my own city.

Since then, Capital Innovators has done really well. We’ve consistently been ranked among the top accelerators five years in a row. We’re one of the only accelerators with a top ranking without a location on the coast and one of the few female-led accelerators with a top ranking. I manage three different investment funds that have invested in over 120 companies. 85% of our companies are still in business, and my top ten companies have averaged a 1700% growth rate. As a result of our success, a number of other programs built on our momentum in St. Louis. Now we have so much going on in St. Louis that a major publication has named us the second best city in which to start a business. In the beginning, I really wasn’t setting out to turn St. Louis into a startup hub, but I’m really excited that’s what happened. Now, I’m intentionally working on that goal. Capital Innovators has a name that’s internationally recognized, and we receive over a thousand applications each year that come from 70+ countries and 48 U.S. states, and I’ve spoken at conferences around the world, including in South Korea, Russia, and Sicily. It’s been really exciting.

BT: As someone from Chicago, I’ve personally felt that the Midwest’s tech ecosystem is behind those of the coasts. Having started an accelerator in the Midwest, what do you feel has been the major challenges to growing tech startups? What are the most promising opportunities, and how can we continue to grow those?

JS: One of the reasons why St. Louis has been so great is that it doesn’t have a lot else going on. The whole city has been behind its growth in entrepreneurship and really supports the cause. Chicago has a lot of business activity going on and startups don’t quite receive similar support. In addition, St. Louis is a big city that feels like a small town, and if you’re a startup here, you’ll receive so much attention and support. It’s also a fifth of the cost to start a business in St. Louis as compared to the coasts, and one of the greatest risks that a company faces at its start is undercapitalization. If your money can go five times further, not only does that help the company save on business expenses, which reduces their risk, but it also means the company does not have to raise as much money, which helps reduce dilution for investors. As a result, as an investor in a company growing in St. Louis, my funds will maintain a higher ownership in the company, and when the company reaches an exit, the fund will generate a far greater return.

One challenge I see is that young talent like college graduates oftentimes think that things are more exciting on the coasts than the Midwest. Tech talent that is fresh out of college might be hard to come by. The good news is, if you’re a bit older and raising a family, you’ll realize that you may want to raise your family in the Midwest—it’s a different lifestyle. Having said that, the more startup activity we have in St. Louis, the more exciting it feels to college graduates. We are finding more and more are choosing to stay at home or stay close to schools in the Midwest. We have a lot of great universities, including Washington University, St. Louis University, Webster, Fontbonne, Lindenwood, and UMSL, which is more than other cities our size.

BT: In recent weeks, we’ve seen the disintegration of WeWork, and there’s this whole phenomenon of “counterfeit capitalism,” in which investors are pouring money into one major player, like Amazon, who will eventually take over the industry and be able to serve at extremely low costs. Over the last couple years, have developments like these influenced your investment criteria? What makes a startup stand out today versus five or ten years ago?

JS: What you’re bringing up seems like an important point. I do sometimes joke that the novel 1984, where there was always a war going on between three major superpowers, is actually happening, but instead of three major powers, it’s companies: Google, Amazon, and Alibaba. I do find that personally concerning. With regards to the startup world, major players like Microsoft, Google, and Amazon have so much cash on their books and they really need to start spending it. Oftentimes, that might mean buying out smaller companies. However, there are also roll-ups—where a smallish company buys another smallish company—or a smallish company buys an even smaller company to improve their bottom line, and these transactions can make these companies competitive against the giants. You can still have a good investment strategy where you’re hoping to exit through acquisition, without necessarily promoting these giants; rather, on the opposite end, it will provide better competition for them.

BT: You’ve previously mentioned Capitol Innovators’ unique mentorship network. Can you talk about how you built up this network, and how Capital Innovators’ mentorship model differs from other accelerators?

JS: The network isn’t necessarily unique; what’s unique is the process that we use. I built the network mainly through word-of-mouth in the beginning; I shared it with a mentor, who spoke to their friend, who spoke to a friend of a friend, and so on. Now that I have a well-known brand, I have people that reach out to me and ask about mentorship in my program. Whenever I speak, whether it’s around the world or at home, I always say there are all kinds of opportunities to get involved, whether it’s as an investor, mentor, or even a service provider that can help startups save money. It’s a way for me to find more people who are ready to give back to this ecosystem. It allows people to help others and help their community, but they also get a lot out of it directly. My mentors have said to me that this is the best education that they’ve ever had in their life. Here are people who have been there and done that, but they’re still learning. They enjoy having responsibility without a full-time job. They enjoy the camaraderie of other like-minded individuals. Our mentors are A-type personalities who don’t want to spend their entire lives on a golf course as they want to stay relevant and on the cutting edge of what’s going on in the technology world. It provides a great win-win scenario for our mentors and founders.

In terms of how our network is unique, we are very hands-on. We build a whole C-suite for each of our companies, meaning someone that acts as the co-CEO for the thirteen week program, and others act as every other C-suite level (e.g. COO, CTO, etc.). Those veterans spend anywhere from twelve to twenty hours each week helping companies. They don’t just give advice; they roll up their sleeves, dig in, and help do the work to show the companies. They lead by example by showing our startups how they should be running their business. The idea behind this is that we’re teaching the entrepreneur. I actually like the analogy of teaching someone to ride a bike. At the end of the thirteen weeks, we hope that you can ride on your own, but if you ever fall off, we will be there to pick you up, dust you off, and put you back on your way. It’s a very intensive hands-on approach. Also, we coordinate all of our mentors, so we work towards the same goal, instead of risking “mentor whiplash,” where one mentor may recommend one thing and another may recommend something else. We make sure we’re always on the same team and establishing and supporting the same goals for companies.

BT: Do you have any advice you’d like to share with undergraduates?

JS: I know that oftentimes when you want to be an entrepreneur, you set out to find some idea that you can turn into a business. That’s okay, but you’ll have a much better shot at coming up with a really good idea if you go out in the world and start experiencing it. When you run into a problem that’s driving you crazy and you have to create a solution for yourself, and then you figure out how to market that solution to other people, that’s a better way of coming up with an idea for a business. Those are the ideas that will work. It’s a lot easier to sell pain relief to customers, where it’s a solution to an actual problem, rather than an opportunity to make something better.

The other suggestion is that everybody seems to want to be the chief, the founder, or CEO. I think there are so many really great startups that are struggling to build quality teams. It’s great to be an early member on another startup team. Imagine if you were the number five person at Google; you don’t have to be number one to be a huge success from a money standpoint and even an autonomy standpoint. If you are number three or number four at a startup, no one’s monitoring your day-to-day activity. You’ll have a responsibility in that startup. You’ll have to come up with how to take care of it, and you’ll feel like a founder. If you don’t have your own killer idea, don’t just come up with something just to have something. Go work for another startup. That’s really a great way to satisfy that entrepreneurial spirit and make a lot of money while you’re doing it.