The Tony R. Wells Foundation Invests in Citra

Investor: The Tony R. Wells Foundation
Investee: Citra
Asset Class: Private Equity
Investment Amount: $239,000
Impact Sector(s): Employment & Job Related; Health
Date of Investment: 2013
Projected Exit: Ongoing share of profits
Financial Return Goal: Below Market Rate
 

The Tony R. Wells Foundation's involvement with an innovative web app called Citra has proven to be a win-win arrangement, especially for children with autism or Down syndrome.

 

The Tony R. Wells Foundation was founded in 2001 after Tony and Dana Wells sold their information technology training and education business, so they are quite comfortable hiring and managing technology resources.

 

Citra, meanwhile, is a cost-effective app that can operate on multiple devices and stores everything in the cloud, allowing parents, teachers, and therapists to share lesson plans and post confidential notes to each other. Individuals with Down syndrome, autism, and other speech impairments often use an augmentative and alternative communication method such as sign language, picture cards, or electronic devices that convert text and images to speech. Consistency is vital to children with special needs. Switching between different sets that use different pictures for the same item can be confusing to the child and make it hard to learn and effectively communicate.

 

With the Citra app's consistency and shared knowledge, the child is able to learn more quickly. The synergy between the foundation and Citra was further enhanced by the foundation's commitment to improving the lives of children with autism and Down syndrome. This was an ideal opportunity for a foundation to invest in, as the market was too small to interest traditional investors.

 

The foundation created a separate joint venture with the Columbus Speech and Hearing Center, which led the development of the Citra app. The two parties negotiated a reasonable split of equity. The foundation would provide funding through a PRI.

 

After validating the initial prototype with the therapists at the Columbus Speech and Hearing Center, the management team and staff of the Tony R. Wells Foundation started to explore the benefits of creating a social enterprise. Market analysis determined the merits of marketing Citra to other speech and hearing centers, special needs teachers, and parents. The board of the Columbus Speech and Hearing Center spent four months debating the merits of being a long-term equity partner in the joint venture versus receiving royalties for their contribution of intellectual know-how. It sought legal and accounting advice, which determined it would need to pay unrelated business income tax on all future income from the sale of the Citra app. The final recommendation and approval of the board was to share in an equity position with the Wells Foundation and receive maximum potential profit.

 

Ohio State University was a significant contributor of resources with the development of Citra but is not an investor or equity owner.

 

Citra L3C completed its second clinical test with four speech and hearing centers, one school system, and numerous parents in late 2014. In spring of 2015 Citra formally launched its marketing efforts including a new website (www.citraapp.com) and is now targeting over 220,000 special needs teachers and speech language pathologists across the United States.

 

The key to successful technology initiatives is good project management. The foundation leveraged an existing relationship with an information technology firm to develop Citra at 50 percent of the estimated cost by introducing it as a corporate social responsibility project and by being willing to accept a longer development time. Creating and organizing a formal clinical testing protocol to determine effectiveness in children delayed the launch by six months. While developing the solution over a two-year period, advances in children with special needs using tablets increased acceptance but also competition.