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Detroit, MI 48226

Sandy Kronenberg on growing a startup alone

Sandy Kronenberg took on investors for his startup, Locqus, earlier this year. That's normal for most tech startups which worship the almighty venture capital dollar, but it’s something Kronenberg has actively avoided.

The serial entrepreneur launched Locqus in downtown Detroit last year, developing a mobile app called Field Manage. The platform helps small businesses in the service industry handle the back end of their businesses, such as managing time clocks and inventory, etc. It also synchronizes the platform with employees’ personal mobile devices or computer so the company doesn’t need to buy electronics for its staff.

Kronenberg funded the development of the startup from the jump. Entrepreneurs who do that like to talk about how they are bootstrapping the company. That’s not the term Kronenberg uses.

"I wouldn't call it bootstrapped in any way or form," he says. "That makes it sound like we're hamstrung."

This isn't Kronenberg’s first rodeo. He has guided multiple startups through acquisitions. His resume includes Netarx, Yottabyte, and Logicalis. That experience has left him with a few nice exits under his belt.

"We are well-funded and there is plenty of more money when the time comes, if and when we need it," Kronenberg says.

So it was a little bit of a surprise for some when Kronenberg announced that Locqus had raised a $2 million seed round. The money came from Kronenberg and Moneris, a Toronto-based corporation that specializes in digital payments. Kronenberg had turned down investment overtures from a number of venture capitalists but Moneris brought more than seed capital.

Kronenberg liked that the company could help scale Locqus' growth with its own expertise and connections. For instance, Kronenberg is getting ready to attend a conference in Paris to speak potential new customers in Europe. The team at Moneris is encouraging him to go. Locqus has also formed a strategic partnership with Samsung, which will recommend Locqus as an must-have app with some of its mobile devices.

"It (the Samsung partnership) is the gift that keeps on giving," Kronenberg says. "Every couple of weeks they come out with new sales groups to present to."

He adds that he is turning down investment from potential investors because it makes sense since he believes in his startup's potential. That way he can maximize his company's profits or exit when the time comes.

"(Losing part of) a 8-10 times X multiple is painful," Kronenberg says.

It also gives him autonomy to grow Locqus as he sees best. One investor means there is no need to report a board of directors, making the company nimbler when it comes to making decisions and executing on them. A reason Kronenberg liked Moneris' investment is because the company didn't demand a seat on the startup's board and is otherwise hands off about the operations.

That enables Kronenberg to remain the master of his own domain at Locqus and focus on growing it.

"There is a lot more growing to be done," Kronenberg says.

- Written by Jon Zemke

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