Cross earns national SBA award

FERRISBURGH — A Ferrisburgh resident who works to help Vermont businesses grow will receive a national award next month in Washington, D.C. that recognizes not only his career accomplishments, but also his extensive community service and his work in Montpelier on behalf of small businesses.
The Small Business Administration recently named Fresh Tracks Capital LC co-founder and managing partner Cairn Cross its “National Financial Services Champion.”
The SBA will bestow the national award upon Cross, 53, during its annual Small Business Week ceremonies, which run from May 18-20.
Cross had earlier been named the state and regional financial services champion after being nominated by Fresh Tracks administrative assistant Holly Killary.
Cross, who with Weybridge resident Charlie Kireker co-founded Fresh Tracks, a venture capital firm that backs growing young companies, said he is excited to represent Vermont at Small Business Week.
He said the recognition is in part due to the way business can be conducted in Vermont — the scale of the state has allowed Fresh Tracks to make connections and find the right prospects for its investors to support.
 “The amount of deal flow in Vermont is too small to attract significant competition, but big enough that we can play a role,” Cross said. “And more importantly we can get an early, early view into companies and track … their progress.”
He also the state’s small scale means he can make an impact on legislation; lecture at the University of Vermont and Middlebury, Champlain and Green Mountain college classrooms; and serve on boards of nonprofits that can also make a difference.
 “I think (the award) is a validation of the fact that in Vermont you can have an effect as an individual at a community level,” Cross said. “You can pick nonprofit activities to get involved in that are meaningful and that you have real knowledge and ability to help. You can affect lawmaking in a positive way. You can create a business that has both a business model and solves the ‘pain point’ of small business out there that need access to capital.”
Cross was born just across the border in North Adams, Mass., but has strong family ties to Vermont — his father and grandparents were Vermonters. His father commuted to Stamford, Vt., to teach.
Cross was a Nordic combined skier at Montana State University, and graduated in 1980 with an unused degree in agriculture. After graduation he worked for the U.S. National Ski Association, then based in Brattleboro.
At some point he wanted a more stable career, and took night classes at what is now Southern New Hampshire University to obtain a masters in business administration.
“I realized if I was going to make a living, the ski business was not the place to do it,” Cross said.
He worked for five years at the Vermont National Bank in Brattleboro, most of it as a commercial loan officer, and then worked in a similar job in Chittenden County for the Howard Bank.
After a five-year stint at the Howard, he went to work in 1996 for Green Mountain Capital. Cross said that fund did more high-risk, high-reward lending than banks, with fewer hard assets serving as collateral to back investments in case of default.
At the same time, Cross also started his own business doing financial consulting for Vermont small businesses.
One of Green Mountain Capital’s founding and general partners was Kireker, and the two founded Fresh Tracks in 2001. It operates in a converted home just off the main drag in Shelburne. The building lacks a sign to announce Fresh Tracks’ presence, not surprising given the firm’s nature: It is not a walk-up business.
When Fresh Tracks opened in 2001, it raised $11 million for a fund that it invested in 14 fledgling firms, including Eating Well Magazineand Vermont Teddy Bear. It has since raised $14 million for a second fund that has so far backed another nine firms.
Those funds, Cross said, came from mostly institutional and business investors, such as Middlebury College and National Life Insurance Co of Vermont, and also “high net-worth individuals and family trusts.”
Those clients must be certified by the Securities and Exchange Commission as suitable for the risk involved.
“They have to have a certain net worth, they have to have a certain amount of liquidity, and they have to have a willingness to risk all the money they would invest in us,” Cross said.
But Fresh Tracks takes pains to minimize the risk by finding the right businesses to invest in.
“They probably haven’t really made a profit yet, (but) they all have pretty high-growth potential or are already growing,” he said. “It (Fresh Tracks’ investments) is on high-growth opportunities that are already on some kind of trajectory.”
Cross said the key to making successful bets is finding the right people to invest in. Once Fresh Track invests, company representatives work closely with the firms to help them grow. Cross sits on the board of a half-dozen firms, including Eating Well, Vermont Teddy Bear and eCorp, which Fresh Tracks — among many others — helped locate in Middlebury.
“Once you’ve invested in a company, then you’re working pretty closely with that company and its management team to help grow that business for some period of time,” Cross said, adding, “I liken it to a marriage. On our side of the table, we’ve got to believe the founders of the company and the employees of the company are people we can work with over the course of a number of years, and the reverse is true.”
The people are critical, he said.
“The saying is you back A players with a B idea before you back an A idea with B players,” Cross said.
Fresh Tracks is paid a management fee, but the ultimate pay-off comes later for the firm and its investors.
“The idea is you’re growing that company, you’re growing the value substantially, so that you can exit and return capital and profits back to the investors in our fund,” Cross said.
Cross said he enjoys sharing that experience with students.
“This is not a knock on the academic profession at all, but there are a lot of academics with no real-world experience, and what I’m trying to be able to do is bring in some real-world experience for the students,” he said. “(We) talk about the material, and talk about the theory, but also be able to say, in practice here’s what I’ve learned over the years.”
Cross said the fact that the rest of his community service also dovetails with his professional expertise helped him win the national SBA award.
He has just ended five-year stints on the Vermont Community Loan Fund (VCLF) and Opportunities Credit Union boards.
The VCLF provides loans, grants and technical assistance for affordable housing, small businesses, childcare providers and other community efforts that are intended to benefit lower-income Vermonters.
Cross said the Opportunities Credit Union’s mission is to provide credit for the state’s low-income residents, help them rebuild their credit after problems, “escape predatory lending and credit practices,” and “bank the un-banked.” Among its efforts are seminars to help immigrants and resettled refugees learn the U.S. financial system.
Cross also estimated he has made as many as 80 trips to Montpelier in the past decade to lobby for improvements in state laws that affect small businesses.
For example, he said he worked to bring parties together to clarify lending laws, which had left the legal status of some lenders to start-up businesses murky. Later, Cross was asked to lead a study group to recommend further improvements; he said that led to a streamlined licensing process for some lenders.
As Cross went through the levels of the award process, he said he became increasingly interested and excited. But ultimately, he said his greatest reward will still be there when he returns from Washington.
 “It’s the best job in the world, for me, anyway,” he said, “because I really enjoy working with these companies.” 
Andy Kirkaldy may be reached at [email protected].

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