Boston Community Capital
SelecTech Inc., Avon, MA
A few years after its launch in 1993, SelecTech Inc. made a significant change to its business model. The company was originally created to recycle plastics into numerous products, and it partnered with other firms that marketed the products for them. In time, however, SelecTech wanted more control over its business, so it decided it would focus on its most successful product—an interlocking floor tile made from recycled plastics—and take charge of every aspect of the manufacturing and selling.
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Although the growing company had a lot of orders, it didn’t have a lot of cash. SelecTech founder and CEO Thomas Ricciardelli approached several traditional venture capital firms in search of funds to buy materials for the orders his company was getting. “It was during the dot-com boom, and everybody was chasing after that,” he recalls. “A company that makes an actual product? Forget it. It just wasn’t in the cards.”
Mr. Ricciardelli got a much different reception when he finally came to Boston Community Capital (BCC).
Since 1985, BCC has committed more than $300 million to projects that contribute to the long-term economic and social health of communities throughout Massachusetts and the northeast. Among the many strategies the organization employs is investing equity dollars in businesses that create social and financial returns.
As a small business with both an environmentally progressive focus and a promising future, SelecTech was the kind of company that appealed to BCC. In 2001, the CDFI provided a $500,000 line of credit designed to let SelecTech borrow against purchase orders it had received from its customers. The financing enabled the company to continue growing while it waited for its customers to pay.
SelecTech’s new business model has clearly proven more enduring than those of many dot-coms that won the hearts of venture capitalists years ago. In 2007, the company’s revenues totaled $1.7 million. And well into 2008, the company was on pace to do $4 million. Still, Mr. Ricciardelli remembers when SelecTech’s future didn’t look so rosy, and he credits BCC for helping the company to weather the transition from a recycling company to a product company. “They definitely kept us alive when we were changing,” he says. &lduqo;We would have gone out of business if not for them. They have been crucial.”
