| Follow Us:

Venture Capital : Innovation & Job News

212 Venture Capital Articles | Page: | Show All

Ed tech company Frontline grows with new products, financing and a bigger HQ

Fast-growing Frontline Technologies is moving to Malvern, nearly doubling its space. In recent months, the company -- which is at the forefront of web-based tools for K-12 education -- has also attracted venture capital and expanded its product line.

Currently located in Exton, Frontline is initially leasing 60,000 square feet at Malvern's Endo building, and will take an additional 30,000 square feet in 2017.

"The relocation of our headquarters into the Endo building illustrates just how quickly we are growing," says co-founder and managing partner Michael Blackstone. "This move will support the current momentum we are experiencing as a result of the expansion of our K-12 product line and the rapid adoption of our products in the K-12 market."

Blackstone founded the company in 1998 with Roland Thompson. Earlier, the pair founded CF InFlight, which developed Skycam. They launched Frontline with Aesop, a breakthrough product that was the first to employ both phone and Internet for automated K-12 substitute teacher placement and employee absence management. Aesop is now used by more than 4,000 school districts in every state in the U.S. -- more than all similar systems combined -- as well as educational clients in Canada and Russia.

Other products followed, including VeriTime, a time and attendance management system for school districts, and Jobulator, a desktop and mobile tool that notifies substitutes of new jobs available for them.
 
With more than 500 new customers in 2013 alone, the company's rapid expansion drew the attention of Insight Venture Partners; they made a significant investment in May.
 
Since then, Frontline has acquired Aspex Solutions, creator of the popular AppliTrack collection of tools for K-12 recruiting, selection and HR file management. In September, Frontline launched Teachwise, an online marketplace for teachers to buy and sell original teaching materials.
 
"Frontline's success, we believe, is due to building web-based solutions driven by the needs of the market," explains company spokesperson Lisa Wolfe. "We seek out and listen to feedback from school districts to inform our new products and improve our current ones."
 
At its new headquarters, Frontline anticipates further acquisitions and new product development, including a new focus on direct-to-consumer products.

Source: Lisa Wolfe, L. Wolfe Communications for Frontline
Writer: Elise Vider

New robotic arms from Pittsburgh's RE2 reach for a range of markets

The reach of Pittsburgh’s RE2 continues to grow, both in terms of its business and its robotic manipulator arms.

The company launched its Highly Dexterous Manipulation System (HDMS) product line in July. HDMS was originally designed for bomb squads, explains Douglas Peters, RE2's vice president of operations. Most explosive ordnance disposal robots include a single, low-dexterity manipulator that significantly limits the tasks that can be performed. With two arms, HDMS offers the same level of dexterity, speed and strength as a human torso and arms, and can perform more complex tasks such as screwing the cap off a pipe bomb.

The system was developed through combined funding from internal sources, the Army and the Navy. The first commercial system was sold to MIT for an ongoing research project looking at automation. RE2 now has two versions of the system in the final stages of development, preparing for wider commercial release.

Last month, RE2 closed on $2.25 million in funding led by Pittsburgh-based Draper Triangle Ventures with participation from Riverfront Ventures. RE2 says it plans to use the capital to further accelerate product development and penetrate new markets such as agriculture and healthcare. In June, the company announced a partnership with Texas A&M AgriLife Extension Service to assess and recommend robotic technologies for the winemaking industry.

HDMS, says Peters, is suitable for "any application that requires near-human capability to interact with the world." 

Source: Douglas Peters, RE2
Writer: Elise Vider
 

$35 million in capital is a breath of fresh air for Yardley's OptiNose

Yardley’s OptiNose, a specialty pharmaceutical company built around an innovative nasal drug-delivery technology, is breathing easier with the infusion last month of $35 million in new capital to continue development of its treatment for serious chronic nasal inflammatory diseases (CNID).

The naval cavity, the company explains, "is a complex landscape, making it hard to deliver drugs to the right place." The new treatment, called OPN-375, uses OptiNose's patented technology to deliver fluticasone, a topical steroid, deep into the nasal cavity. 

According to Terrence Terifay, the company's chief commercial officer, the treatment is aimed at moderate-to-severe suffers of CNID, debilitated by conditions like chronic rhinosinusitis with or without nasal polyps, perennial rhinitis, severe allergic rhinitis, as well as other related diseases of the upper airways. It is a huge market, estimated at up to 15 percent of the population, making it even more prevalent than heart disease. (Seasonal sufferers – you know who you are – are not the target and remain better served by over-the-counter and traditional treatments.)
 
"We believe OPN-375 will be a transformational blockbuster product," says CEO Peter Miller. "Chronic nasal inflammatory disease represents a serious and debilitating condition for a very large population that has been frustrated and underserved for many years by currently available treatment options."

A late-phase clinical trial of OPN-375 is underway; once regulatory approval is obtained, OptiNose anticipates commercial launch in the second half of 2016.

OptiNose was founded in 2000. A migraine treatment using its delivery technology is awaiting approval. Other treatment areas in the development pipeline include pain, inflammation, autism and other disorders. The recent financing was led by existing investors, notably Avista Capital Partners. The company is also considering an IPO in the near future.

Source: Terrence Terifay, OptiNose
Writer: Elise Vider

Raising Capital: Harrisburg Startup Week runs September 29 to October 5

Harrisburg is getting ready to roll up its sleeves once again at the 2014 Harrisburg Startup Week. About 1,500 attendees are expected from September 29 to October 5 at daily events, all aimed at boosting the tech startup scene in Central Pennsylvania.

The week culminates in Startup Weekend, October 3-5 -- more than 100 would-be entrepreneurs are expected to build startups from scratch. Organizers promise over $20,000 in prizes via products and services.

The event started last year as a three-day festival focused on entrepreneurship and the region’s tech ecosystem. This year’s incarnation, featuring 15 events and a number of open houses, is not just a festival, but a movement, says organizer Chuck Russell, a senior partner at Collective Intelligence

One theme this year is children and youth.

"We're very excited to get the younger folks involved," explains Russell. "On Wednesday, October 1, we'll be holding the Fish Tank High School Pitch contest for high school seniors in Cumberland, Dauphin and Perry counties. And on Saturday, October 4, we'll be hosting the CoderKidz, a group of elementary ed and junior high students passionate about hacking, coding and learning how to build modifications to Minecraft, an online game."

Anyone is eligible to participate in Startup Weekend.

"We look for a combination of business[people], developer/engineers and creatives to come together to build companies," says Russell. "The ideas range from hardware gadgetry to software as service products. We don't focus on any particular vertical market solution."

Of 50 participants last year, one of three winners, Date My Apartment, is actively developing its product. 

"There are a number of takeaways from a Startup Week," adds Russell. "We educate, learn, network and build in seven crazy days. Founders find cofounders, startup teams find talent, products are built and connections are made."

Source: Chuck Russell, Harrisburg Startup Week
Writer: Elise Vider

Canadian and French startups in Philly for first Digital Health Accelerator class

Two overseas companies are establishing a U.S. presence in Philadelphia as part of the first class at the University City Science Center's new Digital Health Accelerator (DHA).

Seven companies were chosen from a pool of 69 applicants to further develop their online, mobile and software solutions to healthcare problems. Each will receive up to $50,000, professional mentorship, and introductions to a variety of key healthcare stakeholders including insurers, pharmaceutical companies, hospitals and research institutions located in the Greater Philadelphia region, with the goal of getting their products into the hands of potential customers. 

During the 10-month program, companies will also become members of the newly launched Innovation Center @3401. The DHA is co-located with DreamIt Ventures

The inaugural DHA class includes the following startups:

Biomeme, a DreamIt Ventures 2013 graduate, uses their technology to transform a smartphone into a mobile lab for advanced DNA diagnostics and real-time disease surveillance, identifying targets by their specific molecular signatures.
 
Curbside Care is the "Uber for healthcare," coordinating on-demand house calls via mobile and web-based applications. Their platform bridges a market of fragmented supply and untapped demand by connecting off-shift MDs and NPs to patient users in real time.
 
Fitly, another 2013 DreamIt Ventures graduate, is a mobile app that helps busy people personalize healthy meals from delicious recipes in five minutes or less, and then delivers the fresh ingredients to their home for as little as $5.99/serving.
 
Keosys, based in France, is an established European leader in medical imaging software solutions, helping physicians efficiently deliver the most accurate diagnosis in radiology, nuclear medicine and molecular imaging practices.
 
Life Patch is a small, non-invasive, real-time temperature monitoring system that allows parents to track their child’s temperature from anywhere in the world using any smart device.
 
Pulse Infoframe, a Canadian firm, enables specialty physicians, administrators, pharmaceutical companies and researchers to collaborate to continuously improve quality and cost of patient care through a software platform called HealthIE and a powerful Realtime Clinical Business Intelligence toolset.
 
UE Lifesciences offers innovative, affordable and easy-to-use medical devices for breast cancer screening.
 
The DHA is supported in part by funding from the Commonwealth of Pennsylvania’s Discovered and Developed in PA (D2PA) program.

Source: Jeanne Mell, University City Science Center
Writer: Elise Vider
 

BFTP/SEP closes the fiscal year with $6.6 million invested in 37 companies

The Ben Franklin Technology Partners of Southeastern Pennsylvania closed their books for the fiscal year 2014 with some big numbers.
 
BFTP/SEP announced it had approved $6.6 million in investments in 37 companies across the region.
 
Eight deals totaling $2.4 million were in the physical sciences (four in energy infrastructure, one in engineered electronics, one in energy water infrastructure, one in consumer products and one in sustainable technology).
 
Seventeen deals totaling $2.3 million broke down to seven in software-as-a-service, three in web services, three in infrastructure-as-a-service, two mobile, one gaming and one regional initiative.
 
Life sciences accounted for $1.9 million over 12 deals: four digital health and diagnostics, three diagnostics, three medical devices or biomaterials, one consumer medical products, and one medical imaging and dental tech.
 
Geographically, the deals broke down like this: Philadelphia County, 16; Chester County, seven; Montgomery County, six; Bucks and Delaware counties, four each.
 
Sixty-eight percent of the companies are new to BFTP/SEP; the remaining 32 percent received  follow-on investments.
 
Source: BFTP/SEP
Writer: Elise Vider

BFTP/NEP announces latest funding round

The Ben Franklin Technology Partners of Northeastern Pennsylvania's (BFTP/NEP) has pledged $620,000 in support of regional economic development. The funds will go towards developing and growing early-stage tech companies, helping manufacturers apply new technology and achieve industry leadership, and fostering a favorable business environment for high-growth companies.

Ben Franklin has also announced the following investments, provided to companies in the form of loans.

CEWA Technologies, Wyomissing
Ben Franklin Investment: $350,000
This company hopes to complete design, construction and prototype testing of a new kind of point-concentrated solar power dish. Their product should deliver power for industrial and institutional applications at a lower cost due to its innovative shape and build.

Good Vittles, Hamburg
Ben Franklin Investment: $56,000
This company aims to complete the development and implementation of its exclusive technology to support its e-commerce marketplace for specialty foods. Good Vittles' two e-commerce portals serve as direct distribution channels, connecting food suppliers with professional chefs and individual consumers. Suppliers will use the company's proprietary packing process to maintain freshness while employing cost-effective shipping methods.

U.S. Specialty Formulations, LLC, Ben Franklin TechVentures, Bethlehem
Ben Franklin Investment: $100,000
U.S. Specialty Formulations will complete the set-up, staffing and cGMP-approval process to produce sterile injectable pharmaceuticals for the medical community. Millions of Americans require specialized and custom-compounded drugs, and the current infrastructure is insufficient. As an FDA-registered outsourced manufacturer, USF will employ advanced quality and manufacturing controls to comply with new, more stringent federal quality standards.

Ben Franklin is also investing in the following established manufacturers, providing 1:1 matching funding for work with a college or university partner.

Bosch Rexroth Corporation, Bethlehem
University Partner: Lehigh University's Enterprise Systems Center
Ben Franklin Investment: $25,000

This Lehigh Valley manufacturer of motion-control equipment aims to develop and implement a process to automate data collection, driving process improvements and enabling predictive maintenance for machining centers throughout the company.

Fidelity Technologies Corporation, Reading
College Partner: Northampton Community College's Emerging Technology Applications Center
Ben Franklin Investment: $25,000

Fidelity will develop superior tactical electric power generator technology, primarily for the U.S. Department of Defense. These new generators meet a need for compact, reliable, fuel-efficient and fuel-flexible generators in the field.

Hydro Recovery LP, Blossburg
University Partner: The Pennsylvania State University
Ben Franklin Investment: $25,000

The company will further develop and optimize the economic extraction of useful materials from residual "frac" water used in natural gas wells. Hydro Recovery's process converts the used water into a Hydraulic Stimulation Fluid (HSF™) that can then be reused. This process eliminates the need to transport wastewater over long distances, will save millions of gallons of freshwater each year, and eliminate discharge of treated water into waterways.

Palram Americas Group, Kutztown
University Partner: Lehigh University's Enterprise Systems Center
Ben Franklin Investment: $12,500

This manufacturer of polycarbonate and polyvinyl chloride plastic sheets will complete the development of standard operating procedures to maximize efficiency. These standards will enhance safety and reduce both direct and indirect costs, leading to improved competitiveness and customer satisfaction. 

PMF Industries, Inc., Williamsport
University Partner: Pennsylvania College of Technology
Ben Franklin Investment: $23,000

The company aims to optimize the electrical consumption of its largest motors -- energy consumption represents a significant cost of manufacturing. PMF provides contract manufacturing services with an emphasis on flow forming -- producing metal parts that are cylindrical, conical, or contoured with precise control of wall thicknesses. Customers include the aerospace and energy sectors, as well as users of precision pressure vessels. 

Suburban Testing Laboratories, Inc., Reading
University Partner: Lehigh University's Enterprise Systems Center
Ben Franklin Investment: $3,500

This Reading company will define current and future facility requirements for the installation of a new, centralized walk-in incubator room. Suburban provides environmental, product and water testing and analyses for both industry and municipalities. 
 

Philly's Sidecar rolls on with $3.1 million in new venture capital

Philadelphia's Sidecar, an e-commerce startup, is on a roll.

The company recently announced that it has raised $3.1 million in funding, led by Osage Venture Partners. They join existing investors such as Ben Franklin Technology Partners of Southeastern Pennsylvania which has invested $485,000 in two rounds.

Sidecar claims to be the first big data marketing solution to automate data-driven decisions for e-commerce companies, replacing traditional marketing technologies and agencies, saving countless in-house hours and eliminating wasted ad dollars. The company offers a proprietary technology built from the ground up -- it combines paid search, product listing ads and comparison shopping engines using predictive automated technology; converts visitor engagement through personalized product recommendations; and retains customers through customized, merchandised emails.

"The conventional tools and agencies put retailers' revenue at risk every day by requiring extensive human resources that cannot possibly keep up with constant and dynamic catalog and market changes," says Sidecar CEO Andre Golsorkhi, who founded the business in 2010. Sidecar has since more than tripled revenues year-over-year, according to the company's Fiona Scull.

Scull says the new funding will be used to grow Sidecar’s workforce -- currently at 40 -- by 30 percent. Sidecar also plans to grow its office space in Philadelphia, expand to satellite locations, continue the expansion of its marketing platform to add additional channels and ramp up customer acquisition.

The company already counts among its customers several Top 100 Internet retailers such as NeweggFanaticsRueLaLa and nomorerack

Source: Fiona Scull, Sidecar
Writer: Elise Vider

Jump Start Grants to boost state's early-stage life science companies

It’s a classic dilemma: scientists have profound therapeutic or drug discovery expertise, but often lack the comprehensive development, regulatory or commercial expertise -- to say nothing of the necessary funds to engage consulting help -- to commercialize their discoveries. 

The Jump Start Grant, now accepting applications, is aimed at filling this void in Pennsylvania. Early stage therapeutic companies can compete for professional services and expertise in the form of product development and commercialization plans, which are critical to raising venture capital and growing efficiently. 

"Early stage companies often lack the expertise to comprehensively address the myriad commercial development challenges which exist in the life sciences marketplace," says Pennsylvania Bio President and CEO Christopher P. Molineaux. "We are fortunate to have partnered with two industry leaders on this unique grant opportunity which gives our members access to development and commercialization insights required for preparation of funding applications and presentations."

PharmaDirections of North Carolina and New Perspectives in Alabama are partnering with PA Bio, the statewide trade association for the life sciences, to award two grants of about $50,000 each.

Subject matter experts will assess applications based on the following submission criteria: concept, scientific rationale, innovation, market opportunity understanding, management team and impact. Two winners will receive service grants that include an additive development plan and budget, associated Gantt charts, and commercial opportunity assessment.

Applications are due August 21. Winners will be announced in October 2014 at PA Bio's Life Sciences Future Signature Event. 

Source: PA Bio
Writer: Elise Vider

Philly's Biomeme has growth in its DNA

Growth appears to be in the DNA of Biomeme, a Philadelphia startup. In only a year, the company has raised significant funding, tripled its staff and is moving to larger offices. 

Biomeme "enables anyone to do mobile real-time DNA analysis on a smartphone," explains co-founder Max Perelman. The company makes kits, hardware and software allowing users to easily isolate DNA from a variety of sample types (including blood, water and urine) without the need for lab equipment, and to look for unique DNA signatures of specific targets of interest such as Flu A, E. coli 0157 or sexually transmitted infections (STIs). 

Perelman, Jesse vanWestrienen and Marc DeJohn moved to Philadelphia last spring from New Mexico and California to participate in the DreamIt Health accelerator. From there, Biomeme went to Philadelphia’s NextFab to participate in its residency program and ramp up prototyping and low-volume manufacturing; they were the first company to utilize the partnership between Ben Franklin Technology Partners of Southeastern Pennsylvania (BFTP/SEP) and NextFab. 

Now, with a workforce of 14 (including full-timers, interns and co-op students), Biomeme is moving again into a larger facility featuring lab and manufacturing space on North 3rd Street, a burgeoning tech hub officially dubbed N3RD -- pronounced "Nerd" -- Street by the city.

Markets include test developers and consumers, "anyone," explains Perelman, "who wants a DNA lab in the palm of their hand." Biomeme has successfully completed a number of validation studies with third party laboratories and is preparing a number of developer tools for limited release this year with plans to roll out its STI test panel internationally in 2015. 

Biomeme has raised $1.9 million in seed financing, including $400,000 from BFTP/SEP.

Source: Max Perelman, Biomeme
Writer: Elise Vider

BFTP/SEP issues request for proposals to commercialize alternative and clean energy technologies

Ben Franklin Technology Partners of Southeastern Pennsylvania (BFTP/SEP) is inviting companies developing solar, wind, geothermal or hydro power, advanced uses for natural gas resources, novel energy storage technologies and technologies related to energy conservation or transportation to apply to its Alternative Energy Development Program (AEDP). 

AEDP offers loans between $50,000 to $750,000. The program is intended to accelerate the development and commercialization of promising clean and alternative energy technologies. BFTP/SEP says it will consider proposals for technologies that have demonstrated impact for energy generation, conservation and/or distribution.

To be eligible, companies must have fewer than 250 employees and be located in -- or willing to relocate to -- Bucks, Chester, Delaware, Montgomery or Philadelphia counties. Technologies employed in the proposals can range from early-stage to commercialization ready. 

Under the terms of BFTP/SEP’s request for proposals, a five-to-one cash match is required for $50,000 loans; loans greater than $50,000 require a one-to-one company match.
 
An email notice of intent to apply is due by 5 p.m. on June 23; completed proposals must be submitted by 5 p.m. on July 7.

Source: BFTP/SEP
Writer: Elise Vider

Penn State life science researchers now eligible for QED proof-of-concept funding

Philadelphia's University City Science Center’s successful QED proof-of-concept program has an important new academic partner: Penn State University has expanded its involvement from the Medical College at Hershey to include its main campus at University Park, opening the seventh round of QED funding to hundreds of life science researchers. 

"Penn State Main Campus’ participation in QED signals growing interest in cross-disciplinary collaborations in technology commercialization across Pennsylvania," says Science Center President and CEO Stephen S. Tang. "Innovative minds and the discoveries they will make contribute to our region’s future as a technology hub and innovation center."

In May, the Science Center issued its latest RFP for technologies ripe for commercialization to 21 participating institutions in Pennsylvania, New Jersey and Delaware. Over the next seven months, QED will offer advisory support and the chance for direct project funding to researchers from the participating institutions as they position their technologies for product development and private investment. After the QED Selection Team makes an initial cut, approximately 10 researchers will be paired with business advisors and work to develop business plans to commercialize their technologies. Ultimately, four projects will be selected to receive up to $200,000 each in funding. 

"Faculty in the College of Medicine participated in last year’s QED Program with some success," says Neil Sharkey, Penn State’s Interim Vice President for Research. "Four teams were selected as finalists in the competition, one of which garnered an award. We are hoping for the same level of enthusiasm from Penn State bioscience faculty located at University Park."

QED describes itself as "the first multi-institutional, proof-of-concept program for the life sciences and health IT [bringing] together academic invention, market insight and commercial guidance." To date, five projects funded by QED have been licensed and gone on to raise additional funds. One, a portable low-cost radiation-free breast cancer detector invented by Drexel University Professor Wan Y. Shih, was funded by QED in 2009 and licensed to UE LifeSciences, a growth-stage company in Philadelphia. 

QED continues to attract additional funding based on its track record of successful commercialization outcomes. This year, the program received a $300,000 award from the Pennsylvania Department of Health to help fund Pennsylvania-based awardees.

Source: University City Science Center
Writer: Elise Vider

Hot in Pittsburgh: 2013 was a watershed year for economic development

Pittsburgh’s economic development community is reporting numbers from 2013 that reflect a watershed year, with strong growth, increased investment and a robust entrepreneurial climate.

In its annual report, Innovation Works (IW) announces that it assisted 188 companies and invested $6 million in the region. A record 37 new companies received first-time investment from IW through its seed fund and accelerator programs, making IW the seventh most active seed investor in the U.S. in 2013.

"There is a general sense of momentum in our region’s startup community," says IW President and CEO Rich Lunak. "Whether it's the increased level of spinouts from our universities or the growing number of grassroots organizations, co-working spaces, hackathons and other day-to-day events -- Pittsburgh's startup community is energized. Entrepreneurs are launching new products, receiving national recognition, gaining customer traction and expanding into larger offices to support greater levels of revenue and jobs."
 
And, he adds, 2014 is off to a strong start: "Pittsburgh's first quarter venture investment totals were the highest of any quarter in five years and that bodes well for future growth."

Lunak attributes the success to the fact that "Pittsburgh’s startup community is characterized by multiple areas of technical strength. The region has a highly educated workforce that feeds our diverse startup community in areas that range from computer science and biotechnology to electronics, energy and advanced materials. One broad area where we have a clear advantage over any other region in the country is the merge point where hardware and software meet, whether that's sensors, robotics, 3-D printing and customization, mobile apps for connected devices -- these are all examples of growing technology trends and unique strengths of Pittsburgh."
 
In a separate development, Site Selection magazine named the Pittsburgh Regional Alliance (PRA)  one of the U.S.'s top 10 economic development organizations for 2013 -- the only such group in the Northeast -- based on the group's 2013 performance.

Source: Rich Lunak, Innovation Works and Pittsburgh Regional Alliance
Writer: Elise Vider

PA businesses -- large and small, east and west -- to be honored with ImPAct Awards

An array of Pennsylvania companies -- everything from ABEC Inc. in Bethlehem to Zook Motors in Kane -- are finalists in the 2014 Governor’s ImPAct Awards

For the second year, the awards are aimed at celebrating "companies and individuals who are investing in Pennsylvania and creating jobs." The awards will be given at a May 30 luncheon at Hershey Lodge.

The finalists paint a picture of the Pennsylvania economy -- they range from small businesses to vast enterprises, startups to long-established companies, represent geographic diversity and come from a wide array of sectors. Where else would you find Webster’s Bookstore and Café in State College nominated in the same category as financial services giant Vanguard in Valley Forge?

The PA Department of Community and Economic Development (DCED) led the process for nominations and selecting finalists. Two panels of judges from different parts of the state chose the 50 winners. Any size company is eligible, as long as they have significant operations in Pennsylvania and have been in business for at least one year. 

The awards will be given in five categories: Community Impact to a company that exemplifies the tenet of "doing well by doing good"; Entrepreneur Impact to recognize leadership via creativity, innovation, managerial ability, leadership skills or turnaround; Export Impact to a company that has significantly increased its export sales and number of new foreign markets since 2011; Jobs First, to recognize consistent job growth and retention; and Small Business Impact to a growing firm of 100 or fewer employees. 

Source: DCED and Laura Eppler, Ben Franklin Technology Partners of Northeastern PA
Writer: Elise Vider
 

Pittsburgh's Cognition Therapeutics to launch clinical trials on its novel Alzheimer's drug

Pittsburgh's Cognition Therapeutics is hoping to enter clinical trials next year with its novel approach to treating Alzheimer's disease. 

According to CEO Hank Safferstein, Cognition's small-molecule drugs, taken orally, prevent toxic proteins from binding to the brain. Pre-clinical data suggest the drugs can reverse the effects Alzheimer's and sustain that reversal.
 
If proven, Cognition's approach has huge implications. There are currently no therapeutics available to prevent the accumulation of the toxic proteins that cause Alzheimer's cognitive impairment and, eventually, death. Alzheimer's is the sixth leading cause of death in the U.S., and the number of patients is expected to rise sharply as the population ages.
 
Despite Cognition's promise, raising capital to advance to clinical trials is challenging because of the cost and a risk-adverse funding environment. But Safferstein is hopeful that trials enrolling patients diagnosed with mild-to-moderate Alzheimer's will get underway in 2015, either through a contract research organization or an in-house partner.
 
Meanwhile, the company is continuing to investigate the application of its biological and chemical platforms to a range of other degenerative brain diseases such as Parkinson's, frontal lobe dementia and ALS.
 
Dr. Susan Catalano founded the company in San Francisco in 2007. That same year, the Pittsburgh Life Sciences Greenhouse (PLSG) recruited Cognition to Pittsburgh, providing capital, equipment, office and lab space, and connecting the company with Safferstein, who joined under PLSG's Executive Program. The help gave Cognition "the opportunity to start a company and immediately put money back into the science," explains Safferstein.
 
In the years since, Pittsburgh has continued to be a great place to build a drug discovery and development company, he adds, citing support from PLSG, its Accelerator Fund, Innovation Works and angel investors. 
 
Source: Hank Safferstein, Cognition Therapeutics
Writer: Elise Vider
 
 

Changes point to growth at INDIGO Biosciences in State College

Founded in State College in 2005, INDIGO Biosciences has a new CEO, new investment, a new distribution partner and a new attitude.
 
The plan, says CEO Fred Marroni, who joined INDIGO in December, "is to move the company out of the startup framework into a full-fledged business." INDIGO is Marroni’s seventh startup; he is a former executive-in-residence with the Pittsburgh Life Sciences Greenhouse
 
INDIGO is a contract research organization that provides testing products and screening services, determining how various compounds affect the receptors inside a cell’s nucleus. INDIGO’s technology can ascertain not only the efficacy of a compound, but potential adverse effects, and can test at multiple doses.
 
Marroni is steering the company towards new markets. Besides drug discovery, the technology has applications in agriculture (testing for the effects of genetically modified produce, for example) and chemical and nutraceutical manufacturing. INDIGO, says Marroni, "can put science behind nutraceuticals" which are largely unregulated. "We can give them scientific evidence -- yes or no."
 
Another "big strategic shift is to try to develop a stronger partner channel," explains Marroni. The company recently entered into a distribution agreement with Cayman Chemical Company to boost sales worldwide. They also plan to expand INDIGO’s product line and are currently working on toxicology tests.
 
The company recently raised $250,000, half from the Life Sciences Greenhouse of Central Pennsylvania and half in only 10 weeks from angel investors. Marroni has created the company’s first inside sales position, bringing the workforce to 10 full-timers. He expects INDIGO to be break-even by the end of the year and to add another three jobs.
 
Source: Fred Marroni, Indigo Biosciences
Writer: Elise Vider
 

Philadelphia's Invisible Sentinel expands in plain sight

Philadelphia’s Invisible Sentinel continues to grow more visible.
 
Back in October, Keystone Edge reported that the company was launching its core product, Veriflow, a rapid diagnostic test to detect foodborne pathogens.
 
Last month, Veriflow was approved for detection of Salmonella. Earlier this year, it added Listeria. Invisible Sentinel now covers more than 90 percent of the food safety test market, says Ben Pascal, chief business officer and co-founder with Nick Siciliano.
 
The Salmonella approval is especially significant. The bacteria can be found (spoiler alert!) in ready-to-eat foods, deli meats, dairy products and on preparation surfaces. It accounts for 42,000 reported cases of food poisoning annually (though the actual number may be far higher) and 400 deaths.
 
In January, Invisible Sentinel announced a partnership with Jackson Family Wines in Sonoma, California, to develop a diagnostic tool for Brettanomyces, a yeast that can foul the taste of wine and give it an odor sometimes described as "barnyard-y" (hardly a desirable bouquet). Pennsylvania Bio nominated the partnership for its Deal of the Year award. (PA Bio also presented Paul Touhey, Invisible Sentinel’s executive chairman, with its 2014 Hubert J.P. Schoemaker Leadership Award.)
 
Invisible Sentinel recently closed on a $7 million private stock deal -- according to Pascal, those funds are being used to ramp up manufacturing and outfit the new corporate headquarters at West Philadelphia's University City Science Center. The company is moving one floor up into 7,500 square feet to accommodate increased production, R&D and corporate offices.
 
On the R&D side, the company is working on diagnostics for E.coli and on other applications in the craft brewing and wine industries.
 
The company currently has 21 people on the payroll (19 in Philadelphia), and Pascal expects to add another five to 10 this year.
 
"This has been a big year for us," he adds. "Last year was about coming out of the gate. Now there is significant demand for our products and we are scaling to meet future demand."
 
Source: Ben Pascal, Invisible Sentinel
Writer: Elise Vider
 
 
 
 

BFTP/SEP continues flurry of investment in Greater Philadelphia

With $8.1 million invested in 43 companies in 2013, Ben Franklin Technology Partners of Southeastern Pennsylvania (BFTP/SEP) ranked as the second most active investor in Greater Philadelphia, according to a new report by PwC MoneyTree
 
"Clearly this ranking and the diversity of our investments this past year demonstrate the sustained, vital role of Ben Franklin in catalyzing our innovative talent to solve business and societal challenges and open new markets that create good jobs and drive new growth," says RoseAnn B. Rosenthal, BFTP/SEP’s president and CEO.
 
BFTP/SEP also came in as the fifth most active investor in the nation during the fourth quarter.
 
BFTP/SEP says the information technology sector comprised 44 percent of its 2013 deals, while life sciences and physical sciences/energy captured 30 percent and 26 percent, respectively.
 
Investments included AboutOne, Community Energy, EyeIC, FLOWatchiMomentous, LuxTech, QLIDA Diagnostics, QR Pharma, Rumble News, RxSport Corporation, Solar Grid StoragetapCLIQZaahah  and ZSX Medical
 
Also in 2013, Ben Franklin companies attracted over $160 million in follow-on financing while several others went public or were acquired. These include Altosoft (acquired for $13.5 million), Aprecia Pharmaceuticals (raised $14.9 million), BioConnect Systems (raised $9.1 million), Ceptaris (acquired for $250 million), Clutch (raised $5.3 million), Coldlight Solutions (raised $10 million), InstaMed (raised $3.5 Million), Monetate (raised more than $20 million), NuPathe (acquired for $144 million) and Onconova Therapeutics (IPO totaled $79.6 million). 
 
Since 2001, BFTP/SEP has committed $70 million to over 495 early stage companies and leveraged $1.4 billion in follow-on investment. Its client companies created or retained over 3900 high-tech jobs.
 
 
Source: RoseAnn Rosenthal, BFTP/SEP
Writer: Elise Vider
 

Pittsburgh's PHRQL takes nutrition to the grocery store

For those struggling with obesity, diabetes and other diet-related illnesses, the supermarket is ground zero for making healthy choices. Now PHRQL (pronounced “freckle”), a Pittsburgh startup, is growing thanks to software that makes it easier -- and potentially more profitable -- for grocery stores to offer on-site nutritional counseling.
 
PHRQL is an acronym for "Personal Health Recording for Quality of Life"; the company's core product is its Connect & Coach software, aimed at in-house supermarket dieticians. The software enables them to monitor and coach their patients. What’s more, it links to the supermarket’s point-of-sale systems, providing retailers with data about consumer eating and purchasing behavior, valuable for targeted promotions and marketing. It also facilitates claims to health insurers.
 
CEO and founder Paul Sandberg says the overall goal is to move nutrition education and counseling from hospitals and medical offices to community settings. And what is more practical and efficient than delivering those services right where people buy their food? 
 
The company was spun out in 2011 from a Carnegie Mellon research project in which Sandberg and three other students investigated patient-centered solutions to managing health care costs. The company began at AlphaLab and in 2012 gained its first customer, the Giant Eagle supermarket chain. Throughout 2013, PHRQL tested and refined its software.
 
Today that software is in use at 30 Giant Eagle stores and the company's new contracts – Sandberg declined to name them – will put it in 400 stores across 15 states by the end of this quarter.
 
Carnegie Mellon is an equity partner; PHRQL has also received investment from the Pittsburgh Life Sciences Greenhouse and continues to seek venture capital. It has seven full-time employees and Sandberg expects to add another three jobs this year.
 
Source: Paul Sandberg, PHRQL
Writer: Elise Vider
 

IBC Center for Health Care Innovation hopes to turn SE PA into Silicon Valley of health care

With the aim of transforming southeastern Pennsylvania into the "Silicon Valley of health care innovation," Independence Blue Cross (IBC) has opened a new center it hopes will be a national magnet for industry-leading innovations.
 
Terry Booker, IBC's vice president for corporate development and innovation, says that this is a new area -- but a logical fit -- for insurers.

"We process claims," he says. "And we get to think about the ways that health care can be provided more efficiently and provide better outcomes, resulting in lower premium payments by our members."
 
As part of the new initiative, IBC announced that it will invest up to $50 million in health-related venture funds and early stage companies to promote innovation through new technologies, products and services. Booker says that about half of the capital will be provided through private equity funds and other professional investors. The other half will be in the form of direct investments in early-stage companies that do business with IBC, preferably in southeastern Pennsylvania. IBC, he emphasizes, would not be the lead investor but would provide support for promising technologies or approaches.
 
The center will also serve as IBC's point-of-contact to DreamIt Health Philadelphia. The accelerator, housed at Drexel University, began accepting applications for its 2014 cohort this month. The center will also continue to support research underway with New York University and the NYU Langone Medical Center to better detect undiagnosed diabetes, and studies with Penn Medicine that include using mobile technology to improve medication adherence, understanding the impact of genome testing to improve cancer treatment and outcomes, and evaluating care delivery to improve outcomes for stroke patients. The center will also host a new regional task force for health care innovation, a working group of the CEO Council for Growth.
 
The 5,000-square-foot center at IBC's Center City Philadelphia headquarters is designed to promote collaboration and innovation.

"It’s a departure from the typical corporate environment," says Booker. 
 
Source: Terry Booker, IBC
Writer: Elise Vider
 

With new venture capital, Pittsburgh's Aethon grows its market for healthcare logistics

It’s a happy new year for Aethon, maker of the TUG, a mobile robot that transports and delivers supplies in hospitals. The Pittsburgh company reports that it grew its customer base for TUG in 2013 with 21 new sites. It just announced a new $3 million investment from Mitsui USA, augmenting an initial $4 million investment in 2012. And late last year, Aethon unveiled a new product, MedEx Tube Track, a patent-pending system that secures and tracks deliveries sent through the pneumatic tube systems used to deliver medications in hospitals. 
 
Introduced to the commercial market 10 years ago, TUG is Aethon’s core product. Today, over 400 of the chest-high robots prowl hospital corridors, making 50,000 deliveries per week, transporting medications, meals, linens, equipment and other supplies. Altogether, TUGs have traveled over one million miles, monitored 24/7 by Aethon’s command center in Pittsburgh. 
 
"Robots are becoming more common in the workplace," says CEO Aldo Zini. "With healthcare organizations required to serve an increasingly aging population, yet respond to the pressure on costs, they need to do more with their current staff. This means each person must spend more time doing the highest-value aspects of their job.”
 
And that, he adds, means more time on clinical duties, less on logistical tasks. Zini cites a recent Harvard Business School study of nursing workflow indicating that nearly half of operational breakdowns are a result of supply problems and inefficient processes.
 
Aethon will use its new capital for expanded sales and marketing, and to move into international markets.

"Mitsui USA’s add-on investment is a sign of their confidence in the worldwide interest for Aethon’s solutions in healthcare logistics and the potential for applications outside of healthcare," says Zini. "We have an opportunity to grow the company rapidly, and this additional investment provides the resources necessary to accelerate our growth.”
 
Source: Tony Melanson, Aethon
Writer: Elise Vider

Drexel, UC Science Center and DreamIt Ventures opening a new Innovation Hub

Drexel University,  the University City Science Center  and DreamIt Ventures, on a joint mission to support innovators and entrepreneurs in the Philadelphia region, will launch a new innovation hub in April.

“The Hub is available to companies in a variety of sectors, although its location makes it ideal for technology, digital media, or health IT companies. The goal is to accommodate a community of companies that value a collaborative environment and wish to interact with each other, with startups at the Science Center and with faculty and students at Drexel University, as well as other universities and research organizations in the region,” says Kristen Fitch, a Science Center spokeswoman.

The 17,500-square-foot facility on the second and third floors of the Science Center building at 3401 Market Street will include a suite of flexible workspaces designed to foster collaboration throughout the entrepreneurial ecosystem. It will also house the world headquarters for DreamIt Ventures, a global business accelerator.

The space will be able to accommodate about 100 and flexible enough to host a larger company of up to 25 people or many smaller enterprises in individual offices and a co-working environment, Fitch says.

Drexel is also making a $3 million investment in DreamIt to invest in startups. "DreamIt Fund II and our new headquarters in Philadelphia further position the region as a technology startup hub,” said David Bookspan, founder of DreamIt Ventures. "This exciting partnership between three world-class organizations is an important step in bringing additional capital to Philadelphia to support our growing startup community.” 

Application materials are being developed, but expressions of interest can be sent to claing@sciencecenter.org.

Source: Kristen Fitch, University City Science Center
Writer: Elise Vider

LoanLogics, offering technology for the mortgage industry, wins $11.2 million in venture capital

Fort Washington's LoanLogics, created only seven months ago by a merger, has raised $11.2 million in venture capital to broaden its customer base in the mortgage lending industry. The investment comes from Volition Capital in Boston and existing investors.
 
The mortgage industry has been rocked to its foundation in recent years "and therein lies the opportunity," says CEO Brian Fitzpatrick. "It's been storming pretty bad and we offer shelter."
 
Or, more specifically, software solutions that improve the transparency and reliability of the mortgage process – from loan origination through sales and servicing of loan assets to eventual pay off.
 
Outdated technology can't cope with the battery of rules, requirements and scrutiny resulting from the mortgage crisis, says Fitzpatrick. So, five years ago, Aklero Risk Analytics, a client of Ben Franklin Technology Partners of Southeastern Pennsylvania, and New Jersey's NYLX began looking at a merger.
 
The combined company, LoanLogics, claims to be the industry's first enterprise loan quality and performance analytics platform that improves loan quality, validates compliance, improves profitability and manages risk. Fitzpatrick says the technology makes it possible for five to do what was once the job of 50 – and with more accuracy – at any concern that has to vet loans – banks, mortgage insurers, investors and others.
 
LoanLogics has a workforce of 92, about 50 at the  Pennsylvania headquarters and the rest in offices in New Jersey and Florida. The company plans to hire sales and marketing personnel as it expands its reach domestically and Fitzpatrick projects a workforce of about 170 in two years. Most of that growth will be in Trevose, where the company is moving in March to a new, 11,000-square-foot headquarters.
 
Source: Brian Fitzpatrick, LoanLogics
Writer: Elise Vider

Penn's new hybrid incubator/seed fund supports education entrepreneurs

With funding from an array of venture capitalists and investors, four education startups are getting support from the Education Design Studio Inc. (EDSi), a new hybrid incubator and seed fund established by the University of Pennsylvania's Graduate School of Education.
 
Dr. Barbara Kurshan of GSE describes the  $2.1 million EDSi as a "new innovation ecosystem we are building for entrepreneurs, researchers, investors and teachers." A mash up of an incubator, design studio, seed fund and social impact company, EDSi is virtual for now, as it helps launch four startups: Adidapter, ApprenNet, Raise Labs and scrible.  GSE is actively searching for a physical location in Philadelphia, where it expects to locate EDSi next year. 
 
The four startups were among the winners and finalists at the 2013 Milken-Penn GSE Education Business Plan Competition. A new cohort of education entrepreneurs will be chosen from participants at the May 2014 competition.
 
Investors in EDSi include Ben Franklin Technology Partners of Southeastern Pennsylvania; McGraw-Hill Education; Ron Packard of K12 Inc.; Drs. Steve and Jessica Melman from Dermazoo; John H. Cammack, Managing Partner of Cammack Associates; John Katzman, CEO of The Noodle Companies LLC; the Brigitte and Donald Manekin Family Fund; Gregory Milken; Richard Binswanger, President/CEO of Away To Donate; Dr. Wallace Boston, CEO of American Public Education, Inc.; and Eric Aroesty. 
 
For McGraw-Hill Education, the investment  –  "the company's biggest and most formal foray into the world of startup incubators," according to spokesman Brian Belardi – is an opportunity to potentially partner, acquire or hire innovators in the fast-evolving education technology arena. "We get to lend capital, time and experience," says Belardi, "and we get access to these education startup companies and an ear to the ground in education technology."

Source: Dr. Barbara Kurshan, Penn GSE and Brian Belardi, McGraw-Hill Education
Writer: Elise Vider
 

In only a year, prospects for Philly's Cloudnexa are sunny

In less than a year, Philadelphia's Cloudnexa has completed its first round of fundraising, generating $2.3 million in investments, signed multiple, multi-million-dollar contracts, created a workforce of 16 and has just moved into new corporate headquarters at the Philadelphia Navy Yard.
 
And been designated by Amazon Web Services as one of only 22 "premier consulting partners" for 2014.
 
Cloudnexa delivers cloud-management-as-a service through Amazon Web Services with its proprietary software platform. CEO Joel Davne, Bill Testa, MJ DiBerardino and Josh Resnick established the company in December 2012.
 
Davne attributes the company's strong growth to, among other factors, the growing acceptance of cloud computing and its wide application across market segments. "The value proposition is clear," he says. "Do you want to purchase servers or save money on infrastructure? We save [clients] time and energy and we insure their success [with 24/7 customer service out of Philly.]"
 
So far, the public sector, notably federal government and higher education, is the biggest revenue driver for Cloudnexa, Davne says. Major contracts include a $250 million, four-year contract with the Army and others with the Department of Energy, the Department of Education, the University of Minnesota and, most recently, Carnegie Mellon University. Other market segments include large and mid-market private enterprise ("our bread and butter," says Davne) and, recently, Internet service providers.
 
With its success in raising $2.3 million from sources including lead investor Milestone Venture Partners,  Gabriel Investments and Ben Franklin Technology Partners of Southeastern Pennsylvania, Davne anticipates expanding into global sales and doubling the Philadelphia-based workforce to 32 in 2014.
 
Source: Joel Davne, Cloudnexa
Writer: Elise Vider

Bethlehem's Azevan is developing novel treatments for stress, mood and behavioral disorders

Anti-depressants are a multi-billion-dollar market in the United States, but a full half of patients do not respond to existing drugs. Nor are there any approved medications for a host of other stress, mood and behavioral disorders.
 
Bethlehem's Azevan Pharmaceuticals is aiming squarely at those markets by targeting a different neurochemical system than the conventional SSRI drugs that dominate the market. "We're developing medications that target the vasopressin receptor antagonist system, which is widely recognized for its role in social and emotional behaviors," says CEO and co-founder Neal Simon.
 
The company's most advanced compound, SRX246, a treatment for intermittent explosive disorder, will begin phase-two, clinical trials in the first quarter of 2014 and are expected to take about 18 months, says Simon.  At present, he adds, there is no such pharmaceutical treatment.
 
Azevan is also developing treatment for anger, aggression and impulse control disorders, which often spring from traumatic brain injury, attention deficit hyperactivity disorder, post-traumatic stress disorder (PTSD) and personality disorders. Again, no treatments.
 
PTSD itself is the most rapidly growing psychiatric diagnosis in the United States and a major issue in military medicine. Yet, says Simon, most of the drug treatments available are repurposed anti-depressants that are "minimally if at all effective." He is cautiously optimistic that a clinical trial for Azevan's PTSD treatment will get underway in 2014.
 
Founded in 2005, Azevan has raised about $9 million overall from the National Institutes of Health. Other funders are Ascent Biomedical Ventures, Scientific Health Development, the National Institutes of Mental Health,  the Life Sciences Greenhouse of Central PA  and Ben Franklin Technology Partners of Northeastern PA
 
Azevan is in ongoing discussions to partner with a large, pharmaceutical maker to ultimately commercialize its drug treatments. For now, the company employs seven, and Simon hopes to add more jobs as clinical trials proceed.
 
Source: Neal Simon, Azevan Pharmaceuticals

Writer: Elise Vider
 
 

Good news on Philadelphia venture capital front

After a number of rough years, 2012 saw an increase in the number of venture capital deals and dollars flowing to Philadelphia region technology companies. And 2013 is looking good.
 
A new report  released by Ernst & Young,  Ben Franklin Technology Partners of Southeastern Pennsylvania (BFTP/SEP)  and the Greater Philadelphia Alliance for Capital and Technologies (PACT),  reports that 2012 was the best year since 2008 for investment in the region, bucking the national trend of declining deals and dollars.
 
"And early results from 2013 appear to be on track to meet or exceed the five-year average annual investment amount of $750 million," the report says.
 
The report finds that 2012 investment in the region was $698 million: $580 million in 59 deals came from venture capital firms, $59 million in 64 deals from angel investors, $51 million in 11 deals from corporate/strategic investors and $7 million in 57 deals from seed funds and accelerators.
 
The numbers reinforce Philly's strength in the life sciences, which accounted for 41% of all funded companies since 2008. But the report also finds a significant uptick in the software and information technology sectors, accounting for 33% of all companies funded, which it attributes to a surge in investment activity for enterprise software companies starting last year.
 
"The results … are a further impetus for entrepreneurs to choose the Greater Philadelphia region to launch and grow their enterprises," says RoseAnn B. Rosenthal, BFTP/SEP's CEO.
 
 
Source: Jaron Rhodes, BFTP/SEP
Writer: Elise Vider
 

Pittsburgh Life Sciences Greenhouse leverages capital to nurture two promising startups

The Pittsburgh Life Sciences Greenhouse (PLSG) has announced new investments in two biotech startups "that are  addressing large markets and solving problems that have never been solved before," says John Manzetti, PLSG's CEO. 
 
And the greenhouse's involvement with the two companies goes beyond dollars.
 
PLSG first became aware of Complexa Inc., which is working on a new class of drugs to treat metabolic and inflammatory disorders, in 2008. Since then, the greenhouse has invested more than $500,000 in the company, including its recent $200,000 commitment.
 
In 2011, PLSG helped recruit and place Joshua Tarnoff  at Complexa as CEO, through its Executive Program, designed to bring experienced life sciences executive talent into the region. 
 
PLSG helped attract Cognition Therapeutics to Pittsburgh from San Francisco. The company is working on a new class of drugs to treat and possibly even reverse Alzheimer's Disease. 
 
"Our PLSG team was absolutely floored by the technology and promise it would bring to patients," says Manzetti, who adds that the value of the company, if successful, would be "incalculable."
 
From its initial $200,000 investment in 2007, PLSG helped leverage further investment from other sources. And through its Executive Program, PLSG placed Hank Safferstein as CEO (he splits his time between Cognition and PLSG as an executive-in-residence.) 
 
PLSG also helped Cognition set up by purchasing its lab equipment and leasing it to the company in lab space that it also provided.
 
With its latest investment of $138,000, PLSG has invested a total of $1.2 million in Cognition, the greenhouse's largest investment to date.  In addition, the PLSG Accelerator Fund has invested heavily into Cognition. 
 
Both CEOs have raised significant capital for Complex and Cognition and both will need millions more to test and potentially bring their drugs to market. 
 
Manzetti pledges to keep at it: "These are the types of companies PLSG loves and in which we will continue to invest."
 
Source: John Manzetti, PLSG
Writer: Elise Vider

Entrepreneurs and startups will be eligible for Innovate in PA funding

The state has officially launched its new Innovate in PA program to accelerate high-wage job growth by supporting entrepreneurs and startups.
 
At a recent visit to Innovation Works' Alpha Lab, Gov. Corbett said, “With 98 percent of new jobs in Pennsylvania coming from startups and small emerging growth companies, Innovate in PA is a common-sense approach to economic growth. Innovate in PA’s investments will help forward-thinking companies inspired with vision to become household names, turning Pennsylvania into the next Silicon Valley.”
 
Innovate in PA, effective as of October 1, will offer $100 million in deferred tax credits to insurance companies in the state to raise funds over multiple years. The funds raised will be directed to the Ben Franklin Technology Development Partners, three Life Sciences Greenhouses and the Venture Capital investment program.
 
The governor's office said Innovate in PA is projected to create a minimum of 1,850 technology jobs, nearly 3,500 indirect jobs and more than double the return-on-investment back to the state. For every dollar invested via Innovate in PA in early-stage businesses, it is projected that $2.37 will be returned to the state in additional tax revenues.
 
“With Innovate in PA we offer new ways to support creative thinking and business know-how with vital investment,” Corbett said. “Every great business begins with a bold idea and we are here to give you that initial boost to propel your startups from a plan on paper to a thriving company that embodies the American dream.”
 
The legislature created the new tax credit program this summer to address the seed capital needs of startup companies and small businesses with the goal of supporting growth and expansion in Pennsylvania, facilitating job growth, new patents and products and increasing tax revenues for the Commonwealth. 
 
Source: Governor's Office
Writer: Elise Vider
 

With millions in new venture capital, Conshohocken's NextDocs poised for further growth

Conshohocken's NextDocs is in the money, with a new round of venture capital and funding commitments worth $13.5 million.
 
"Since its inception, NextDocs has primarily funded its operations and growth through revenue generation. Of course, this has only been possible because of the extremely strong reception our solutions have received in the market,"  CEO Zikria Syed said in a statement. "These additional equity investments and funding commitments will allow us to escalate the investment in our solutions, services and global organization – positioning the company to capture even greater market share."
 
NextDocs says that demand is rapidly expanding for its regulated content management solutions to the life sciences industry. Its research found that nearly 37% of life sciences companies have reported replacing or beginning to replace their legacy document management technologies in favor of regulated content management software and the trend is accelerating.
 
OpenView Venture Partners of Boston led the new funding round with participation by Eastward Capital and Bridgebank Capital.
 
OpenView was already NextDocs' largest investor and its first institutional investor, having provided a $10 million Series A round of investment in 2011. "We see NextDocs growing aggressively and becoming a much larger company over the next few years," said Firas Raouf of OpenView.
 
Founded in 2006, NextDocs today counts more than 100 life sciences companies among its clients, including five of the top 10 pharmaceutical companies and two of the largest clinical research organizations.
 
In a separate announcement, NextDocs also reported that it has been named as Microsoft's Life Sciences Partner of the Year for 2013, the fourth consecutive year it has received the award.
 
Source: NextDocs
Writer: Elise Vider
 

Glen Mills' Versify Solutions get a jolt with new contract, venture capita

Versify Solutions in Glen Mills is getting a jolt – a good thing for a company that develops software and IT systems for the power industry. In recent weeks Versify announced both a significant venture capital investment and a new, six-year licensing contract with Pacific Gas and Electric Company (PGE), the giant California utility.
 
Versify, says President and CEO Pete Cona, "is really picking up speed in the market." 
 
The energy industry, Cona explains, "is looking to leverage its existing infrastructure. And the question everyone is trying to get an answer for is 'how can I improve efficiency and profits from my existing infrastructure and how can I absorb emerging technologies?' "
 
This is where Versify comes in. Founded in 2005, Versify offers a suite of proprietary software products and services to collect, analyze and report on vast amounts of incoming data in real time. "We believe software is a key piece to integrating different generating technologies, improving operations, integrating with the grid, improving reliability and being compliant [with regulation]," Cona says.
 
Versify's market includes utilities, energy traders, power schedulers, power developers and compliance officials – "professionals in the power industry who demand a constant flow of data to efficiently navigate an increasingly dynamic sector." Besides PGE, it counts among its clients other big players such as Constellation Energy and Xcel
 
On the capital front, SJF Ventures announced last month that it is has invested in Versify. Also participating is Potomac Energy Fund, an earlier Versify investor. "The financing will be used to expand the company's sales efforts and provide customer support in meeting current market demand," SJF said. Neither SJF nor Cona revealed the dollar amount.
 
Cona says the company is growing both revenues and customers annually and that he expects the workforce to grow by about 30% over the next year. 
 
Source: Pete Cona, Versify Solutions
Writer: Elise Vider
 

IPart keeps its funding rolling to assist tech startups secure federal grants

Once again, Pennsylvania's Innovation Partnership (IPart) has scored funding in a challenging environment, in order to "assure Pennsylvania's small technology companies that its programs will continue to assist them in generating winning, fundable federal Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) proposals."
 
Director Kelly Wylam says that IPart secured a $95,000 Federal State and Technology Partnership (FAST) grant from the U.S. Small Business Administration. The funds were contingent on successfully raising a dollar-for-dollar match from the IPart membership: Ben Franklin Technology Partners, University City Science Center, Life Sciences Greenhouse of Central PA, Pittsburgh Life Sciences Greenhouse, Pennsylvania Small Business Development Centers, Pennsylvania State University, Pennsylvania State University School of Medicine, BioStrategy Partners, the Innovation Transfer Network, Ben Franklin Venture Investment Forum, Drexel University and Temple University.
 
With $190,000 in hand for the 2013-14 fiscal year, Wylam says that IPart can provide training, assistance and review of proposals and micro vouchers and micro grants to help small companies defray the costs of preparing winning proposals.
 
The potential return-on-investment is high. Wylam notes that in fiscal 2012-13, IPart assisted about 25 companies, two of whom have already received phase 1 federal awards of $250,000 each. Subsequent phases offer money in the millions. Since IPart's inception in 2003, the program, administered by the Ben Franklin Technology Partners, has conducted 505 technical reviews and 92 SBIR/STTR federal awards have been granted, totaling over $25 million.
 
Despite a drop in federal/state funding, Wylam says, "we have not missed a beat here." For a very small amount of money, she adds, "We're helping [Pennsylvania's tech startups] have a better chance of winning these dollars and moving their technologies forward."
 
Source: Kelly Wylam, IPart
Writer: Elise Vider

Ben Franklin Venture Idol brings crowdfunding to Northeastern Pennsylvania

What if you did a mash-up of "Shark Tank" and "American Idol"? Except with entrepreneurs and investors instead of vocalists and celebrities.
 
The Ben Franklin Technology Partners of Northeastern Pennsylvania (BFTP/NEP) plans to do just that when it hosts Ben Franklin Venture Idol,  northeastern Pennsylvania's first crowdfunding event, on November 21. 
 
After two rounds of preliminary judging, three tech startup entrepreneurs will pitch their ventures to investors and a live audience of about 150, each of whom will distribute $100 in "Ben Bucks," to be honored later as a total of $15,000 in cash awards by BFTP/NEP. There is a Ben Franklin Venture Idol page on RocketHub.com so that interested individuals can invest real cash online prior to the event.
 
“Ben Franklin Venture Idol illustrates a significant way in which early-stage entrepreneurs seek and obtain seed capital,” says Laura Eppler, director of marketing for BFTP/NEP. “During this event, the audience and 10 promising technology firms will learn about company strengths and weaknesses, their likelihood for commercial success, and how to improve their funding pitches. Supporting entrepreneurs in this way is fundamental to Ben Franklin’s mission, allowing us to leverage our financial investments.”
 
The Ben Franklin Venture Idol competitors are:

Bison Analytics, LLC, Lewisburg, which produces business intelligence software for small businesses that use QuickBooks™ accounting software.
 
Cerora Inc., Bethlehem, which makes affordable neuro-diagnostic information available to non-specialists in the field. 

eVendor Check, Hawley, which reduces clients’ risks associated with vendor selection by using patent-pending survey tools and a supporting database.
 
GiveGab, Dunmore, whose proprietary web-based software platform is a social network of volunteers, nonprofits, schools, and businesses that allows them to connect using a single network.
 
Map Decisions, LLC, Bethlehem, whose MapCollect™ software platform for field-oriented industries operates on consumer-grade mobile devices and replaces outdated methods of data collection. 

Orbweaver Sourcing LLC,  Bethlehem, which develops, builds, and markets PricePerfect™ technology to automatically analyze and filter parts search results.
 
Pivitec, LLC,  Bethlehem, which develops audio streaming and distribution products. 

PROVA Systems, LLC, Carbondale, whose Fleet Genius™ diagnostic device links with its cloud-based software to collect, monitor, and analyze the performance of vehicles and drivers in a vehicle fleet. 
 
Skaffl, LLC,  Allentown, which produces a mobile app for teachers and students to exchange materials, assignments, completed homework, assessments and grades.
 
The tenth competitor will be named at Lehigh Valley Tech’s Startup Weekend event, scheduled for November 15-17. Admission to Ben Franklin Venture Idol is $35 in advance and $40 at the door. Register online at http://ennect.com/e2100.

Source: Laura Eppler, BFTP/NEP
Writer: Elise Vider

Safeguard comes through for Ambler's Clutch Holdings

Safeguard Scientifics, the Wayne-based, venture capital firm, is backing a young company and neighbor in Greater Philadelphia. At $5.5 million, it's a relatively small investment for Safeguard, but a highly promising one, says Erik Rasmussen, Safeguard's managing director, technology.
 
Clutch Holdings in Ambler is, according to Safeguard, the only mobile commerce platform that unifies gifting, loyalty programs and shopping. "We started looking heavily at the loyalty and gifting space on e-commerce," says Rasmussen. "And very few companies offer one platform for in-store, web and mobile devices."
 
And, adds Rasmussen, studies show that retailers with loyalty and gifting programs see 46% more purchases.
 
Still, it wasn't only the product and technology that drew the venture capital. Ned Moore, who founded Clutch with Andy O'Dell and Dan Guy, has a track record with Safeguard. Previously, he was co-founder, chairman and CEO of Portico Systems, which provided enterprise software solutions into the healthcare payer market. Portico was a Safeguard partner company from 2006 to 2011, when it was acquired by McKesson, a large, San Francisco-based healthcare services company, for $90 million in cash, generating a four-time, cash-on-cash return for Safeguard.
 
Clutch says it will use the new financing to further develop its mobile commerce platform. The company recently acquired ProfitPoint,  a leading supplier of loyalty and gifting. A spokesman for Clutch says the company currently employs over 30 and expects to double its team over the next two to three years.
 
Source: Erik Rasmussen, Safeguard Scientifics
Writer: Elise Vider

Pittsburgh Life Sciences Greenhouse strategically focuses its investments

Established in 2002, the Pittsburgh Life Sciences Greenhouse (PLSG) has plenty to brag about: 178 investments totaling $19 million in 76 companies, leveraging $840 million in additional capital.
 
Still, a relative scarcity of investment dollars has prompted PLSG to embrace a new focus on later-stage companies. Simply put, says President and CEO John Manzetti, "there's not enough capital to put more fish in the pond."
 
PLSG recently announced $315,000 in investments for the first half of the year to Wellbridge Health, PHRQL Inc.  in Pittsburgh and NewCare Solutions in Warrendale in the growing healthcare information technology (HIT) sector and Alung Technologies in Pittsburgh, ATRP Solutions  in Pittsburgh, MS2 Array and Quantum Ops in Pittsburgh.
 
PLSG is also doubling down on two specific life sciences sectors that it judges have the best growth potential.
 
HIT (which uses technology for needs such as record keeping, managing clinical trials, insurance paperwork, etc.) is especially attractive to investors because, with a simpler regulatory burden, "it is simpler to get to market and returns are faster," says Manzetti.
 
Therapeutics are attractive, he explains, because research and development, once the province of the pharmaceutical companies, is now done largely by small start-ups, which represent potentially lucrative acquisitions for drug makers.
 
Still, Manzetti adds, PLSG "is not abandoning pre-seed and seed companies. We will go back to more early-stage investment when we have more capital." In fact, PLSG has launched its "Think-Q-Beta program" to incubate young HIT companies, providing office space and other services. Its first tenant is Quantum Ops.
 
Source: John Manzetti, PLSG
Writer: Elise Vider
 
 
 

Two SE biopharmas win millions in new VC investment

Two Southeast Pennsylvania biopharma companies have announced significant venture capital investments for continued development and, ultimately, commercialization of their cutting-edge drugs.
 
Trevena Inc., founded in 2008 in King of Prussia, has raised $60 million in its Series C financing round, including a $30 million equity investment by Forest Laboratories of New York. Trevena and Forest have entered into a collaborative licensing option agreement for the development of TRV027 to treat acute heart failure.
 
If the drug hits future development and commercial milestones, Forest can exercise its option and will pay up to $430 million, plus royalties, to Trevena.
 
The potential for the drug is enormous. “Acute decompensated heart failure (ADHF) is the fourth leading cause of hospitalization in the United States and there has been no material change in the standard of care for patients with ADHF for decades,” said David Solomon of Forest in a statement. “TRV027 has the potential to be a significant new advance in the treatment of ADHF because it addresses the underlying pathophysiology of the disease, which has been demonstrated in the pre-clinical and early clinical work by Trevena.”
 
Meanwhile, nearby in Doylestown, Callidus Biopharma, has earmarked $4.6 million in new investment to accelerate pre-clinical development of drugs for a range of “orphan diseases,” rare and ultra-rare diseases and those traditionally under-served by the pharmaceutical industry.
 
Dr. Hung Do, chief scientific officer and co-founder, said the investment, Callidus’ first external funding, will be used towards initiating clinical studies in 2014 of drugs to treat lysosomal storage disorders, which cause rare genetic diseases.
 
Sources: Trevena Inc. and Callidus Biopharma
Writer: Elise Vider

Pittsburgh’s Aquion Energy growing fast with high-tech alchemy

What happens when you mix saltwater, cotton, dirt and carbon? Pittsburgh's fast-growing Aquion Energy has performed that alchemy to create its Aqueous Hybrid Ion (AHI) batteries, a new way of storing energy. With $35 million in venture capital (from investors including Bill Gates), the young company is gearing up to start manufacturing later this year.
 
Aquion's technology addresses what CEO Scott Pearson calls the "fundamental mismatch" between energy generation and storage. Think of a simple solar system: daytime sunshine generates power, which must be stored for delivery at night. Aquion's AHI batteries can be configured to do just that for an array of applications, everything from a single, solar-powered house to large utility grids. And the batteries, Aquion says, are safe, reliable, cost-effective and environmentally friendly.
 
The company rented 300,000 square feet in the former Sony plant in Mt. Pleasant and expects to start building its first AHI batteries at the plant at the end of the year, with full production and commercial launch in 2014.
 
Pearson wouldn't discuss hiring plans, but did say that the company current employs more than 100 and that, eventually, it expects to hit 1,000.
 
The company was established in 2008 at Carnegie Mellon when Dr. Jay Whitacre produced the first functioning AHI battery with long-term-cycle stability. The following year, the company outgrew the CMU labs and located to the Lawrenceville section of Pittsburgh, where it is still headquartered.
 
Source: Scott Pearson, Aquion Energy
Writer: Elise Vider
 
 
 
 

Pittsburgh’s AlphaLab Gear proclaims hardware’s turn

Ten or 15 years ago, market forces and tech innovation made it possible for software companies to readily establish themselves. Now, says Ilana Diamond, director of Pittsburgh’s new AlphaLab Gear, it’s hardware’s turn.
 
The new hardware and robotics startup accelerator, one of only a few in the country, is aimed at providing physical product companies (“something you can touch and feel,” says Diamond) with investment, equipment, mentoring and more, all in service of boosting manufacturing, ideally in or around Pittsburgh.
 
Part of the impetus for AlphaLab Gear comes from the changing forces that make it possible, for example, to produce a prototype, which used to take thousands of dollars and months, for pennies and in minutes using a 3D printer. Add access to high-tech equipment in shared workspaces like Pittsburgh’s Tech Shop and crowdfunding, and the potential for hardware startups is significantly altered.
 
AlphaLab Gear will work on the same model at its parent startup accelerator, Innovation Works’ AlphaLab. Companies can choose to receive $25,000 or $50,000 in investment in exchange for 5% or 9%  equity. And AlphaLab Gear companies with a robotics focus will receive investment and help from Startbot, an investment firm specializing in early-stage robotics companies. “Their participation is a recognition that private capital thinks this is a successful model,” says Diamond.
 
AlphaLab Gear is accepting applications for its first cycle and is hearing interest from a wide range of companies that make everything, Diamond says, from medical devices to consumer products to sensors to games.
 
Source: AlphaLab Gear, Ilana Diamond
Writer: Elise Vider

For those who give back, a social network to call their own

It is a paradox that volunteers can be expensive and time consuming for the schools, nonprofits and businesses that use them. GiveGab is a social network for volunteers (think LinkedIn for unpaid workers) with features aimed at both those that manage volunteers and volunteers themselves.
 
Volunteer managers use GiveGab to create and manage events, promote their programs, recruit volunteers, track hours and report on all the good they're doing to funders, alumni and other interested parties.
 
Founder Charlie Mulligan offers this example. Marywood University in Scranton strongly encourages volunteerism. Last year, students donated 71,000 hours with each student filling out and submitting written documentation. "At the end of the year, they had 71,000 hours of paperwork," says Mulligan, and, without GiveGab's technology, it took two nuns an entire summer to enter the results into the school's database.
 
Individuals interested in volunteering use GiveGab to find opportunities, log their hours, create a resume and connect with others.
 
GiveGab was founded in 2011 and already has 122 universities (including Ivy League and other big-name schools), about 1,800 nonprofits and more than 10,000 users. Now the company has raised $1.6 million in venture capital and is launching a premium service that will offer more robust reporting, communications and tracking tools. GiveGab is targeting universities as its prime market for the new, subscription service because with their vast number of students and relationships with nonprofits, "each university is its own ecosystem," says Mulligan.
 
The company is headquartered in Ithaca, NY, where it employs 11, and maintains a four-person office in Dunmore. With a  $35,000 loan from Ben Franklin Partners of Northeastern Pennsylvania  to boost sales and marketing of the new premium service, GiveGab expects to add about three more to its sales team, likely in Pennsylvania.
 
Source: Charlie Mulligan, GiveGab
Writer: Elise Vider

With $3.8M in VC funding, Malvern's Zonoff expects to double staff, make smart homes smarter

Whatever you call it – smart home, connected home, Internet of things or M2M (machine to machine) – Malvern's Zonoff is poised for major growth in this booming market.
 
The company recently announced that it has raised $3.8 million in venture capital to support technical and global sales growth of its software platform, available via apps, on the cloud or in the home via a router or other device. Zonoff's technology allows users at home or away to monitor and control thermostats, light switches, locks, motorized window coverings, security systems and more.
 
Mike Harris, Zonoff's co-founder and CEO, says a major target is the mass-market consumer via a do-it-yourself starter kit sold at big-box retailers. But Zonoff doesn't sell direct to consumers. Instead, it sells its products and services through "channel partners" -- mass-market retailers, hardware manufacturers, electronic device makers and service providers such as cable and telephone companies.
 
"The thing we like about Zonoff is that they are not attempting to build a consumer brand, but rather are empowering big name consumer brands who already have deep and long-lasting consumer relationships," said Lawson DeVries, general partner at Grotech Ventures  which is making the VC investment, along with Valhalla Partners
 
Zonoff also offers its channel partners an ecommerce platform that combines consumer education and merchandising to deliver ongoing revenue streams as consumers expand and upgrade their homes.
 
Zonoff was spun off in 2011 from Bulogics, a designer and developer of  custom wireless automation systems. Zonoff currently employs 18 and Harris anticipates it could as much as double its workforce in the year ahead.
 
Source: Mike Harris, Zonoff
Writer: Elise Vider
 
 
 
 
 
 
 
 
 
 

DreamIt Health nurtures 10 healthcare startups in Philly

Ten startups are getting a healthy boost as part of DreamIt Health, the first, Philadelphia-based healthcare accelerator.

They are:
• AirCare - a mobile application that helps hospitals prevent readmissions and improve patient outcomes through tele-nursing and patient-specific analytics.
Biomeme - a low-cost, mobile molecular diagnostics device to help point-of-care clinicians and epidemiologists quickly diagnose and track infectious diseases in real-time with smartphones.
Fitly - a service that helps health plans tackle childhood obesity by engaging and motivating at-risk families with game dynamics and convenient delivery of healthy ingredients.
Grand Round Table - an application that helps clinicians rapidly zero in on the right diagnosis for complex cases by intelligently matching the patient's electronic record against millions of other cases from around the world.
Medlio - a mobile application that enables physicians to get paid faster and eliminates paper sign-in forms through a virtual health insurance ID card that instantly syncs information among patient, provider and payer at the point-of-care.
MemberRx - a solution to better contain the cost of pharmaceuticals by enabling selection of the best generic or on-formulary branded drug for a specific patient seamlessly within an electronic medical record system.
•OnShift– an instant communications system for clinicians caring for the same patient and analytics to discover and remove obstacles to effective care delivery and transitions-in-care.
Osmosis - a learning management system for clinicians to better retain and apply knowledge via a web and mobile platform that takes advantage of cutting-edge cognitive techniques.
SpeSo Health - an online analytics platform for identifying and accessing top medical expertise in rare and complex diseases. 
Stat - a web and mobile application that helps providers and payers speed patient transport and lower costs by matching and dispatching idle transportation resources.
 
Each startup gets $50,000, four months of mentoring and coaching, and workspace at Venturef0rth in Philadelphia.
 
DreamIt Health is sponsored by Independence Blue Cross  and Penn Medicine.
 
Source: Independence Blue Cross
Writer: Elise Vider

Pittsburgh defies national slump in venture capital with a 54% jump in 2012 deals

More evidence that Pittsburgh has emerged from the Great Recession: Bucking the national trend, Pittsburgh showed significant growth in venture capital in 2012, according to a new report by Ernst & Young and Innovation Works.  
 
Nationally, the number of venture deals dropped 6% and dollars invested fell 10% last year. But the number of deals in the Pittsburgh region was up a staggering 54% from 123 to 190 and the investment dollars rose, too, albeit slightly from $326.9 million to $329.1 million, the report found. 
 
From 2008 through 2012, during the worst of the economic downturn, the region saw $1.3 billion in investments in early-stage technology companies, the report found. "The investment community is recognizing that … Pittsburgh has globally competitive strengths in software, life sciences, robotics and other sectors," said Innovation Works President Rich Lunak in a statement. "If we can maintain the momentum in our pipeline and increase the pool of local investment capital to support the growing number of high-quality startups, Pittsburgh can ascend to being one of the nation's top-tier startup communities."
 
Meanwhile, early-stage companies, university/company collaborations and established companies anywhere in Pennsylvania with projects in advanced electronics or robotics can apply for the latest funding cycle of the Technology Commercialization Initiative (TCI)
 
A total of $800,000 is available, with a $100,000 maximum award per project. Innovation Works will host a webinar at 1pm tomorrow on the submission/review process. Initial proposals are due May 24; final applications are due July 26.
 
Source: Innovation Works
Writer: Elise Vider
 

CMU startup PayTango, dancing as fast as it can

Tired of digging through backpacks and messenger bags for their student IDs and debit cards, four Carnegie Mellon seniors started to investigate ways to consolidate all the cards in their wallets and pay with a swipe of a finger.
 
They knew they were onto something when, recalls Brian Groudan, "we heard gasps" while demonstrating at a University of Pennsylvania hackathon last fall.
 
Groudan, Kelly Lau-Kee, Umang Patel and Christian Reyes are all graduating this spring and are partners in PayTango,  a fingerprint-based identification and payment system.
 
In only a few months, PayTango is dancing as fast as it can. Inc. magazine recently named it among America's coolest college start-ups for 2013. Three of the partners spent the first three months of this year at the Silicon Valley Y Combinator accelerator in Mountain View, California, and PayTango has begun to attract serious investor interest. "We didn't plan for this," muses Groudan. "It just sort of happened."
 
The students developed the technology, which marries biometric and card data, in CMU's inaugural Tech Startup Lab Course last fall, taught by Luis von Ahn, known as one of the pioneers of crowdsourcing.
 
PayTango's registration process takes about 20 seconds. Users place two fingers on the terminal's fingerpad, swipe the card they want to register and type in a phone number. Any card with a magnetic strip can be registered – credit, debit, gift, loyalty or ID. On repeat visits, users simply place their fingers on the fingerpad to make payment. The service is paid for through contracts with merchants, and is free for users.
 
The system is being tested at CMU dining locations and Groudan expects to continue to expand its testing there and at other campuses and local businesses, such as gyms. Investor interest is coming from Silicon Valley, but, he adds, "our first customer is CMU and we have very close ties to Carnegie Mellon."
 
Source: Brian Groudan, PayTango
Writer: Elise Vider
 

Calling all tech entrepreneurs: Apply FAST for free boot camp

Listen up, budding tech-based entrepreneurs. The deadline to apply for the next State College 8-Week Boot Camp  for business startups is COB tomorrow, otherwise known as 5pm Friday, April 12.
 
It's worth the scramble. The boot camp, sponsored by TechCelerator@State College, offers a free chance to hear from successful entrepreneurs, business support professionals, and even private and institutional investors on how to develop a solid, fundable business model.
 
The program requires a time commitment of two hours per week on eight successive Tuesdays beginning April 23, from 3 to 5 p.m.
 
There are other perks, too. Ben Franklin’s Transformation Business Services Network and Penn State’s Small Business Development Center staff will provide weekly one-on-one business mentoring. And participants will compete for $10,000 to help get their business off the ground.
 
Last year’s winners were Lin Wang, CEO, and Dr. Tony Jun Huang, CTO, of Ascent Bio-Nano Technologies LLC and Dr. Kevin Irick of SiliconScapes.  Ascent Bio-Nano has developed a chip that can produce three-dimensional focusing of a stream of cells, making it possible for inexpensive portable devices to rapidly screen cells for diseases such as leukemia or HIV. SiliconScapes is developing SmartView, a smart-camera technology that can be attached to retail displays and advertising and is capable of detecting shopper posture, attention and gaze, as well as interactions with the product.
 
“We had these technologies for quite a few years, but before the TechCelerator program we had never thought that we could start a company ourselves to commercialize the technologies. The TechCelerator program has done a great job in inspiring us, coaching us, and making us believe that we can do it," says Huang.
 

 
Source: Don McCandless, TechCelerator@ State College
Writer: Elise Vider

BFTP invests $315K in eight innovative Northeast companies

Software, social media, sales and storage are some of the sweet spots for eight companies receiving $315,700 in new investments from the Ben Franklin Technology Partners of Northeastern Pennsylvania’s  (BFTP/NEP).  

These five early-stage companies will receive loans:

Bison Analytics
of Lewisburg, $35,000 to complete development of its business intelligence software for small businesses that use QuickBooks™ accounting software. Bison will continue software enhancements, develop a sales strategy for the company’s cloud-based product, and analyze follow-on funding tactics.
 
Cerora Inc., a resident of Ben Franklin TechVentures business incubator in Bethlehem, $50,000 to re-engineer software and hardware, and commercialize the Cerora brainwave sensor, a medical-grade, portable, and affordable electroencephalogram (EEG) that measures and records the electrical activity of the brain.
 
EggZack another TechVentures firm, $48,000 to complete efforts to improve the inbound sales process, which promotes EggZack through informative social media content marketing. EggZack markets a patent-pending software as a service (SaaS) solution aimed at marketing small businesses.
 
Everest Business Services in West Wyoming, $50,000 to establish brand recognition and sales by leveraging partnerships and Internet sales strategies. Everest utilizes proprietary software to provide short-run, digital print products.
 
Dunmore's GiveGab,  $35,000 to implement a sales and marketing strategy to begin commercializing premium features of GiveGab's proprietary web-based software platform that facilitates communications between volunteers and nonprofits networks.
 
BFTP also named three established manufacturers as recipients of 1:1 matching funding for work with a college or university partner on technology-based manufacturing innovation. They are:
 
Consolidated Storage Companies, Inc.,  of Tatamy and Lehigh University’s Enterprise Systems Center, $25,000 to help complete a plant-wide production analysis at this manufacturer of storage systems and tool chests in order to optimize manufacturing processes.
 
EcoTech Marine  of Allentown and Lehigh University’s Enterprise Systems Center, $22,700 to complete implementation of a new Enterprise Resource Planning system with features to accommodate expansion and maintain quality. EcoTech makes pumps and lighting for hobby reef aquariums.
 
Hydro Recovery, Blossburg and Penn State, $50,000 to investigate the economic extraction of useful materials from residual “frac” water, used in the development of natural gas wells.

Source: BFTP/NEP
Writer: Elise Vider
 
 
 

TechVentures and Lehigh Valley angels join forces to nurture start-ups

Much like raising children, it takes a village to nurture business start-ups. So it is that Ben Franklin TechVentures  has announced a new partnership with Lehigh Valley Angel Investors.
 
"It's a natural partnership really," says Wayne Barz, TechVentures' manager of entrepreneurial services. "Ben Franklin Technology Partners often incubates and invests in a company when it is still finalizing products or entering beta customer relationships. Angels tend to wait until the results of those steps are successful. 
 
"We were seeing a lot of our clients get some investment from us and then get selected to make a presentation to LVAI. So having our two groups in a more formal relationship like this makes both logistical and philosophical sense."
 
An official relationship with the angel group is also a draw for prospective TechVentures clients, providing exposure and proximity to potential investors. LVAI members will be also be available to coach TechVentures clients and serve on panels at events such as annual Ben Franklin Venture Idol event.
 
For LVAI, the partnership promises greater visibility, resources, meeting space and hopefully, new members who in turn, might be interested in investing in TechVentures firms.
 
Established in 2010, LVAI has so far invested in Orion Fleet Intelligence, EggZackmdCurrent  and Common Place.
 
"Ben Franklin TechVentures is ideal – a beautiful, modern facility in which entrepreneurship flourishes," said LVAI President Kyle David in a statement. "Our affiliate partnership will lend credibility and permanence to the Lehigh Valley investors group, as well as encourage networking among the investors and the early-stage firms occupying TechVentures."
 
Source: Wayne Barz, Ben Franklin TechVentures
Writer: Elise Vider

New eye test brings venture capital and promise of jobs for Hummelstown’s MacuLogix

Age-related macular degeneration (AMD) is the leading cause of adult blindness, affecting an estimated 13 million in the U.S. and 30 million worldwide. It’s also an insidious disease, asymptomatic for years until it suddenly ravages vision. 
 
Now MacuLogix in Hummelstown has raised $3.6 million in funding to accelerate manufacturing and commercial sales of the first practical diagnostic tool for early detection of AMD. The AdaptDx test can be easily incorporated into a routine eye exam and will enable early treatment to slow or halt the progression of AMD.
 
Greg Jackson developed the technology at the University of Alabama and founded MacuLogix in 2008 after joining the ophthalmology department at Penn State College of Medicine in Hershey. “And as it ends up,” says CEO John Edwards, “Pennsylvania is a great place to launch a small company, especially in the life sciences.” 
 
Edwards says the startup was greeted with enthusiastic support from the Life Sciences Greenhouse of Central Pennsylvania, Ben Franklin Technology Partners of Central and Northern Pennsylvania and the Hershey Center for Applied Research, where it continues to be located. About $1.4 million of the financing is convertible debt from BFTP and Greenhouse investments; the rest is new venture capital. 
 
After three generations of prototypes, AdaptDx is on target for commercial release in June, says Edwards, manufactured in Eagleville by Inteprod, a contract manufacturer. The target market will be optometrists and general ophthalmologists, initially in the Philadelphia region. 
 
MaguLogix currently employs five and Edwards projects another 10 hires over the next 18 months for sales and marketing. MacuLogix R&D is focused on next generations of the test and software that will enable researchers to fully analyze AdaptDx results.
 
Source: John Edwards, MacuLogix
Writer: Elise Vider
 

Pittsburgh's ShowClix to hire 10 during another boffo year at the box office

ShowClix is proud of its in-house cinema, its cereal wall, its pool table, its downtown Pittsburgh location and its extraordinary growth.
 
Founded in 2007 by Joshua Dziabiak and Lynsie Campbell as an online ticketing and live event search engine, ShowClix is today a full-service ticketing platform handling live music, sports, performing arts and other special events for clients including New York's Museum of Modern Art and Pittsburgh's Heinz History Center.  In 2012, ShowClix reported $52 million in gross ticket sales; the 2013 projection is $75 million, says COO Tom Costa.
 
What's more, ShowClix has raised $2.7 million in venture capital, most recently winning a $50,000 investment from Innovation Works
 
Costa attributes the company's growth and ability to attract capital to its strong emphasis on customer support and technological innovation. Building on its software platform, introduced in 2008, ShowClix has regularly added features such as "Incentix," a discount for ticket buyers who post the event on social media, mobile ticket purchase and delivery, web-based box office tools, an Apple ticket scanner app to expedite admission at events and more.
 
The most recent Innovation Works investment is targeted to ramping up sales, marketing and lead generation, Costa says, with a larger national sales team.
 
ShowClix already has clients across the country, Australia and Canada and most recently signed with a cricket promoter in India. The company employs 40 – all but three in Pittsburgh – and expects to add 10 more jobs this year, primarily in sales, marketing and customer support.
 
Source: Tom Costa, ShowClix
Writer: Elise Vider

Student investors VenturePact graduate their first startups

Students can make great entrepreneurs, but VenturePact—founded by Penn students Randy Rayess and Pratham Mittal—is proving they can also be wise investors. The emerging firm is releasing its first class of startups.
 
A few months ago, First Round Capital launched student investors with The Dorm Room Fund (featured in a December issue of Flying Kite), entrusting $500,000 worth of capital to undergrads. VenturePact, on the other hand, didn’t begin with major cash. The group invests technical handiwork -- building out the startup’s product -- in exchange for a fee and partial equity.
 
Development can be outsourced, but it’s tough for non-techies to evaluate quality: A product riddled with bugs can still look great on a screen. VenturePact’s "partnership" model changes the incentives.
 
"Now that we have equity stakes, we want to build the best possible businesses," explains Rayess. "We want to keep them and nurture them."
 
VenturePact received over fifty applications at inception, but accepted only three: Accompliss, an app that helps hotels connect with guests; AirCare, a video-based professional coordination app tailored to the healthcare industry; and Boupp, an app that helps the fashion industry consult with customers on emerging trends.
 
The new platforms will be maintained by Penn students, who will receive school credit through VenturePact’s fellowship program. Rayess expects to eventually offer incubation services to startups, connecting them to mentors, publicists and venture capitalists.
 
VenturePact received a significant publicity boost in September 2012, when First Round Capital CEO Josh Kopelman tweeted about them. They’ve since connected with the venture arms of IBM and General Electric, who expressed interest in sending incubated companies their way.

Source: Randy Rayess, VenturePact
Writer: Dana Henry

Music and technology team for virtual guitar lessons from Pittsburgh's Tunessence

Alex Soto plays trumpet and piano. Matt Bauch plays guitar. With their shared love of music, it’s no surprise that the two recent Carnegie Mellon engineering grads have teamed up to meld music and technology.
 
Tunessence, their Pittsburgh startup, is a virtual guitar teacher, combining advanced audio processing software with instructional video  that, says Soto, "emulates in-person instruction in your web browser."
 
The software uses the student's computer microphone to "listen," provide note-by-note feedback and personalize instruction with a catalog of popular songs.
 
Founded in mid-2012, Tunessence has already attracted significant capital: $50,000 each from Innovation Works  and Carnegie Mellon's Open Field Entrepreneurs Fund and $10,000 from a New York City angel investor.
 
Soto says the funds are being used to immediately hire a web designer, the third full-timer. The company also has four part-time developers and music teachers. The capital is also going to product development and marketing, mostly through online guitar communities and, potentially, in partnership with guitar makers.
 
Tunessence is still testing its product – and is looking for volunteer beta testers – with plans for a commercial launch in mid-March. The company is working out prices, Soto adds, but will function on a monthly or annual subscription basis. A sample, holiday version attracted about 250 users.
 
Looking ahead, Soto anticipates that "within a year, we should be flirting with profitability. That's the goal."
 
And he adds: "Guitar is only our starting point. Our underlying mission is to combine technology with music, to make learning instruments easier and entertaining.  Once we've figured out guitar, we'll be going after other markets aggressively."
 
Source: Alex Soto, Tunessence
Writer: Elise Vider

Pittsburgh's StatEasy has a new game plan

Mike Ressler founded Pittsburth's StatEasy in 2010 with six customers and a business model based on selling subscriptions to coaches for its sports software platform. Today he has 180 customers and is on his way to raising $1 million in capital. But equally significant for a young company, Ressler took a hard look at conditions on the ground and has deftly executed a 180-degree pivot in his strategy. 
 
Last summer, StatEasy decided to become free to high school coaches. The new target customer is a player's parent. Ressler recalls a five-hour meeting at a northwestern Pennsylvania school district at which three hours were devoted to cutting referees to save a grand total of $2,400 for the season. "That's the level of budget issues that they are facing," says Ressler. High school coaches, he concluded, "don't have much money at all" and a subscription service to integrate statistics and video is a luxury they couldn't afford.
 
But for parents and students who need highlight reels and statistics to impress college recruiters, StatEasy is a useful tool and a relative bargain for only $300 for the season – compared to a single, traditional highlight video which can run around $1,000. What’s more, StatEasy has instituted revenue sharing with the participating schools, "a win for the school and for StatEasy," says Ressler.
 
StatEasy is doing a soft launch of its new model this week with the Western PA Quad A basketball league – 60 teams at 34 schools. Ressler has won a total of $300,000 in funding from Innovation Works, $50,000 from Carnegie Mellon's Open Field Entrepreneurs Fund and is in talks with angel investors as far away as Texas and California. 
 
Source: Mike Ressler, StatEasy
Writer: Elise Vider
 

Innovation Works invests in nine companies, three commercialization projects in Pittsburgh for $1.1M

Nine companies received a combined $975,000 in funding in November and December of 2012, and three promising commercialization projects at nearby universities received a combined $125,000 in funding from Innovation Works, the Ben Franklin Technology Partners office in Southwestern Pennsylvania. 
 
The investments are as follows:
 
RessQ Technologies Inc. (StatEasy), Pittsburgh (East Liberty): $100,000
StatEasy is the next generation sports media company based on a software platform that helps teams integrate their stats and video and generate media products.
 
ActivAided Orthotics LLC, West Mifflin: $75,000
ActivAided Orthotics has developed a line of Postural Training Apparel to eliminate back pain by training self-corrective habits. ActivAided's first product, RecoveryAid, was found to decrease back pain in 90% of users, helping them return to their desired active lifestyles.
 
ShowClix, Inc., Downtown Pittsburgh: $50,000
ShowClix delivers full-service ticketing solutions for arts venues, live performances and special events. Event producers can also take advantage of unique event promotion tools on social media and a scalable ticket scanner app.
 
Tunessence Inc., Pittsburgh (Southside): $50,000
Tunessence offers a virtual guitar teacher in your web browser. The entertaining and easy-to-use platform creates a new way to learn and teach music online. The software listens to the student as they play and provides note-by-note feedback, guiding students through favorite songs. 
 
XACTIX, Inc., Pittsburgh (Southside): $200,000
XACTIX manufactures etching equipment which uses xenon difluoride gas to etch silicon and other materials. Its largest market is manufacturers of MEMS (Microelectromechanical systems) devices, but XACTIX equipment is also used for other applications in the semiconductor and medical device markets
 
AutoRef, Inc., Pittsburgh (Oakland): $100,000 
AutoRef lets consumers compare guaranteed offers from dealerships without visiting a lot. These offers are guaranteed for 72 hours and include financing, accessories and dealer incentives. All of the negotiation is done online in an open forum with dealerships.
 
FutureDerm, Inc., Pittsburgh (Southside): $50,000 
FutureDerm approaches beauty from a scientific perspective, offering a line of beauty products containing innovative formulations with extensive laboratory testing and physician approval. 
 
Kextil, LLC, O'Hara Twp.: $150,000 
Kextil software utilizes industrial strength speech recognition and bluetooth to wirelessly connect a field technician with his mobile device. 
 
SenSevere LLC, Pittsburgh (Southside): $200,000 
SenSevere has developed and is commercializing a hydrogen sensor for chemically and thermally severe environments that provides real-time safety and compliance monitoring solutions in the power generation, environmental, and chemicals manufacturing industries.  

Birchmere Labs poised to fund two new Pittsburgh digital media startups

Birchmere Labs, the $10 million studio seed fund created by Birchmere Ventures to support digital media startups, plans to fund two Pittsburgh-based companies in the near future.
 
While the announcement is not yet official, Birchmere Partner Sean Sebastian confirmed that two local startups will be among the first to receive studio funding. 
 
One of the companies is a digital media technology developed by a professor at Carnegie Mellon. Sebastian declined to provide details on the second, but said both companies would be developed in house initially through Birchmere Lab.
 
“A CMU professor came to us with an interesting idea that has never been done, but he didn’t want to run the company,” says Sebastian. “We struck an agreement and plan to build a company from scratch around the idea.”
 
Birchmere Labs operates as a seed studio fund, a novel approach that allows Birchmere to fund established startups through seed monies and support and build new companies through the studio funding. 
 
“We saw all the internet, media and web 2.0 activity coming, which really didn’t fit into Birchmere IV,” says Sebastian. “It was like putting a square peg into a round hole.”
 
Birchmere Lab was formed with the help of Sean Ammirati, who joined as a principal partner last August. Ammirati has a national reputation in digital media and mobile technologies. He was formerly the COO of tech blog ReadWriteWeb (now ReadWrite) and CEO of mSpoke, which sold to LinkedIn in 2010.
 
Last August Birchmere announced a $40 million venture capital fund, Birchmere IV. The fund has invested in eight companies so far, two local companies among them. Uptown-based NoWait received $2 million and Ross Township-based The Resumator received $2.1 million. Both were Innovation Works’ Alpha Lab companies.
 
While Birchmere continues to invest in the best companies it can find, regardless of geographic location, the recent activity does suggest that local startups might have an advantage.
 
“While there’s no official edict, the closer we are to an earlier stage company, the less heavy lifting is required,” says Sebastian.
 
Source: Sean Sebastian, Birchmere Ventures 
Writer: Debra Smit

Three Lehigh Valley startups compete tonight for Ben Franklin Venture Idol

Kelly Clarkson, Ruben Studdard, Carrie Underwood, ArioTech,  LifeAire Systems or Virtual Celebration
 
One of these three Lehigh Valley startups will be the next Ben Franklin Venture Idol  after pitching tonight to a panel of judges and a live audience. No record contract is in the offing. Instead the new Idol will win a $5,000 investment.
 
"The criteria will be the strength of the management team, defined market need, viability of the product or service, development of distribution and channel strategy, financial projections and overall presentation by the principal, among others," explains Laura Eppler of Ben Franklin Technology Partners.
 
Instead of Mariah Carey and Randy Jackson, this Idol will be judged by experienced venture capitalists: Denny Boyle works with Mid-Atlantic companies for Silicon Valley Bank; David Drahms of Osage Partners is involved in several venture organizations; Stephanie Olexa is founder and president of the Lehigh Valley Angel Investors; and Doug Petillo of Navigant Ventures is a seasoned director, investor, and serial entrepreneur.
 
To thank them, BFTP is giving each an iPad dock designed by a budding Saucon Valley entrepreneur, 11-year-old Dino Zaharakis. Dino developed the product idea and, with his dad’s help, worked with Northampton Community College’s Fab Lab to create 3D solid models. Hill Metal Company, Bracalente Manufacturing and Electrospace Fabricators helped produce the final product. 
 
Idol fans will also hear a solo from keynote speaker Paul Martino, managing director of Bullpen Capital, which focuses on the social-mobile web sector and makes follow-on investments in startups funded by super-angels.
 
Tickets to tonight's event are still available at the door at the Innovation Institute at Ben Franklin TechVentures
 
Source: Laura Eppler, Ben Franklin Technology Partners of Northeastern Pennsylvania
Writer: Elise Vider
 

Election season drives membership, hiring and investment growth for Philadelphia's ElectNext

Philadelphia's ElectNext has grown membership by 1,000 percent for four straight months. Having partnered with 40 media sites and secured more than $750,000 in investments, the civic-engagement startup is moving fast to keep up with upcoming federal elections and their own ambitions. They are hiring data scientists and engineers.
 
According to Dave Zega, National Director and CMO of ElectNext, political campaigns operate like a corporate marketing agenda: They purchase personal information, available via internet, and deliver highly tailored messages to individual voters. So how do you know who you’re really voting for? ElectNext turns the tables by collecting data on the politicians from multiple sources, including interest group ratings, campaign finance records, and politicians’ websites, to reveal candidates’ true stance on various issues. Members sign in, answer a series of issue-related questions, and receive their best voting ‘match.’
 
“What do we know about our politicians?” Zega asks. “Most of us can’t even name them and that is a huge data divide. That is why we are building the big dataset on your politicians and putting it together with a recommendation engine, so that anyone, anywhere can use our data and technology to engage on their most important political issues, every day.”
 
As elections approach, voters seek the company’s partner news sites, which include national and local outlets, driving traffic to ElectNext. Upon discovering their match, new members can publicize their results on social media platforms, sparking political conversations and civic activity while creating more potential members.
 
Collectively, the answers members provide illustrate the policy positions of the voting public. ElectNext generates profit by leasing access to this aggregated data to broadcast media, search engines, and educational nonprofits, without revealing anyone’s personal information.
 
So far, the “big dataset” accounts for federal elections, but ElectNext expects to build state and local elections into their platform in 2013.
 
“Some of our most important issues happen on a daily basis in our communities,” Zega says. “Think community centers and public parks, property taxes and the neighborhood school. So that is where we most want to help you engage.”
 
Co-founder Keya Dannenbaum, worked on several campaigns before entering Wharton’s demanding MBA program and losing all civic awareness—it’s difficult to balance political research with real life. ElectNext aims to better connect estranged voters with authentic politics. They’re continued success could help make super-packs and fact-checking frenzies a thing of the past.  

Source: Dave Zega, ElectNext
Writer: Dana Henry

For more of Greater Philadelphia's latest and greatest, sign up here to receieve Flying Kite in your inbox for free every week.

University City Science Center receives Venture Impact Award from Early Stage East

University City Science Center received the Sal Buccieri Memorial Venture Impact Award during the 15th annual Early Stage East, venture capital conference, on Thursday (Oct. 4). Previously, this award, which honors individuals and organizations that help early stage companies flourish in Philadelphia, was largely given to venture capitalists.

“[The University City Science Center] has created a true center of innovation,” David Freschman, Founder of ESE, says.  “It offers counsel, resources, facility and thought-leadership which has been the impetus for the launch and growth of many companies in our region that currently employ thousands of employees.”

“This award is especially meaningful as we embark on our 50th anniversary year,” Stephen Tang, President & CEO of UCSC, says of the acceptance.  “I did not have the honor of knowing Sal Buccieri, but from what I've heard about him, he exemplified the pay-it-forward mentality we need to nurture a thriving culture of entrepreneurship and innovation.”

During the conference, 25 technology startups from Club Pitch presented to venture capitalists and angle investors. Freschman says many participating companies gain their first-round investment from contacts made at ESE. Innovation Capital Advisors, where Freschman serves as Managing Principal, invests up to 70 percent of their capital in companies that participated in Club Pitch. Among the 16 presenters from the Philadelphia region, Freschman cites Snip SnapLocaltyPeople Linx and Cloud Confidence as companies to look out for.

“Philadelphia is very much a city driven by ‘substantive’ enterprise,” Freschman says. “These are businesses that will grow because of customer acquisition and sales growth versus publicity and marketing presence. Maybe they aren’t as sexy as what you read in INC magazine, but [Philly companies] are really productive.”

Freschman believes the greater Philadelphia public, however, needs to look beyond banking and insurance to find the real success story of our local enterprise community.

“We need to really praise and recognize these emerging companies” he says.

Source: David Freschman, Early Stage East
Writer: Dana Henry

For more of Greater Philadelphia's latest and greatest, sign up here to receive Flying Kite for free in your inbox every week.

Four Central/Northern PA tech startups get a jumpstart from Ben Franklin Technology Partners

Technology is the common denominator among four startups that received a total of $370,000 in investments from the Ben Franklin Technology Partners of Central & Northern PA earlier this month.
 
"The goal is to create and retain jobs, assist in the development of new technologies, and support emerging tech companies as they grow and increase sales," BFT/CNP says in a news release.
 
Erie-based CE Convergence offers a convenient, easy-to-use continuing education management tool and online marketplace for professionals with licensing requirements. The software is initially focused on the accounting profession, but can be easily adapted to healthcare, law, teaching, real estate, and insurance. 
 
Founded in State College, Ascent Bio-Nano provides high-performance, low cost, miniature flow cytometry devices used for biological studies, therapeutics, and even the medical diagnosis of HIV and cancer. The company has filed for seven U.S. patents and invention disclosures for this device through Penn State University. 
 
Lasers for Innovative Solutions (L4IS) is a State-College based manufacturer of electronic inspection and monitoring devices with technology capable of decomposing physical objects and digitally reconstructing them as an interactive 3D model.  This is important as many large companies are seeking new methods to inspect high value assets such as genetically modified crops and gas well core samples.  
 
Located in Cumberland County, CrimeWatch US  has developed a software platform designed to operate on web and mobile technologies that allows more than 33,000 domestic law enforcement agencies to manage and control fugitive/offender updates.  The public can easily access information across social media networks and other forms of electronic communication.  
 
Source: Ben Franklin Technology Partners of Central & Northern PA
Writer: Elise Vider             

Lancaster startup takes aim at key-access technology, hiring up to four

For everyone who has ever fumbled to unlock the front door or garage or to disable the alarm -- you know who you are -- a Lancaster startup is offering its patented technology to come to your rescue.

ECKey turns any Bluetooth-enabled cellphone into a secure device to unlock the car, house, garage door, gate, office, alarm system, or access control system without the need for keys, fobs, cards or remote controls. 

Nick Willis, an inventor in New Zealand, founded the company there in 2005, and has sold about 2,000 units. The company moved to Pennsylvania last year and is now ramping up to begin domestic production and distribution this fall, says President and CEO Paul Bodell. 

There will be two products for starters. One is a complete stand-alone system in which the phone becomes the keypad and proximity reader. The other is an enterprise-wide system that can be used to retrofit large systems like those found in universities and office campuses.

ECKey is on track to raise about $1 million, including a $150,000 investment from Ben Franklin Technology Partners of Central and Northern Pennsylvania, says Bodell. He's working on building a distribution and dealer network and is assembling a small staff  for sales, marketing, customer and technical support, says Bodell. Within a year, he expects to have about five on the payroll altogether.

Source: Paul Bodell, ECKey
Writer: Elise Vider



Drexel-rooted, Glenside-based Drakontas earns $500K in funding for police, rescue mobile solution

It's like the movies. Drakontas recently garnered a $250,000 investment by Ben Franklin Technology Partners of Southeastern Pennsylvania for its futuristic mobile solution DragonForce, designed to assist police, combat and rescue operations.
 
The Ben Franklin investment is matched by private contributions, adding up to about a half million dollars total for the funding round, according to James Sim, President and COO. 
 
Drawing on the power of smartphones and other mobile platofrms, DragonForce provides a variety of real-time mission critical data to help locate targets, victims, and team members, including geo-tracking, a whiteboard, shared media and files, and secure text messaging. 
 
Looking at police and rescue missions, Alan Kaplan, CTO, says, "Traditionally, radios have been the primary way to communicate. Police vehicles have laptops, known as Mobile Data Computers, but one of the problems has been that when they leave their trucks or cars they don't have information with them. One of the benefits with DragonForce is that we are able to push and capture information, and users can share information no matter where they are." When the operation is over, DragonForce makes reporting a snap, with all collected data at the ready.
 
James Sim says, "Our software was actually developed by living with the customer. Every member of our staff suits up and embeds with hazmat and SWAT teams." Drakontas employees also carry weapons as part of the experience. 

So far, says Sim, DragonForce has two countywide deployments: York County's quick response team, and Gloucester County NJ's Department of Emergency Management. Drakontas also provides a white label product to other resellers.
 
Drakontas employs a total of nine, with Drexel University co-op students in addition. The technology originated at Drexel University, where the school mascot is a dragon. Sim says Drakontas, located in Glenside, will use the recent funding round for product development and marketing.

Source: James Sim, Alan Kaplan, Drakontas
Writer: Sue Spolan

For more of Greater Philadelphia's latest and greatest, sign up here to receive Flying Kite in your inbox for free every week.

Made in Bellefonte, TubeClear medical device clears FDA, likely meaning new jobs

Four years in development, and 10 months before the Food and Drug Administration, TubeClear, a new medical device developed and manufactured in Bellefonte has won FDA clearance for U.S. sales.
 
Maureen Mulvihill, president of Actuated Medical, says the product is the first that the company has brought to market.
 
TubeClear removes clogs in medical feeding and decompression tubes using reusable control boxes and single-use cleaning stems that mechanically clear clogs without the need to remove and replace the tube and with minimal disruption in the  delivery of nutrition and medication.
 
With FDA approval, a domestic distribution deal in the works and a distribution agreement in place for Europe, the Middle East and North Africa, Actuated has added four new positions to produce TubeClear. The company now has 17 employees total, Mulvihill says, including its research and development team, which has more products in the pipeline, including surgical devices.
 
Actuated was founded in 2006 as Piezo Resonance Innovations, drawing on a physics term. Last year, the company became Actuated Medical, which means motion in medicine. "We wanted a name that describes what we do," says Mulvihill.
 
Having cleared its first commercialization hurdle and attracting capital from private investors, "it all looks positive" for Actuated, says Mulvihill, who expects to add jobs as the company grows. But she worries about drastic cutbacks in federal research grants to small business, which were critical in getting Actuated to this point. "If this had happened four years ago to us, we wouldn't be in this situation," she adds.
 
Source: Maureen Mulvihill, Actuated Medical

Writer: Elise Vider

Entrepreneurs across PA get a jumpstart from Ben Franklin Technology Partners

An array of firms across the commonwealth, mostly startups, are beneficiaries of investments made in the last week by The Ben Franklin Technology Partners, Pennsylvania's venerable technology-based economic development programs.
 
BFTP of Central and Northern PA (BFTP/CNP) announced investments totaling $1.8 million in 11 firms. In Northeastern Pennsylvania, BFTP/NEP announced nearly $560,000 in investments in six early-stage companies and six established firms working with academic partners on technology-based manufacturing innovation. And BFTP of Southeastern PA is making $1.375 in new investments.
 
The companies funded by BFTP/CNP are:
  • AgIntegrated Inc.,  State College, a tech consultant to the agriculture industry;
  • BRL Solutions, Kane, for a new lubricant for use on boats;
  • Conduit Marketing, Girard, software for purchase of in-home medical equipment;
  • Dataforma Inc.,  York, web-based business management software;
  • ECKey, Lancaster, turning Bluetooth-enabled cellphones into access keys;
  • Eduplanet21,  Mechanicsburg, a social learning platform;
  • Flashpoint Informatics, Bellefonte, cloud-based computing services;
  • Lewis Designs LLC, Waterford, innovative brake designs;
  • Strategic Polymer Sciences,  State College, animation for mobile devices and smart phones;
  • TM Filtration,  Erie, systems to serve the shale gas industry;
  • USIC LLC,  York, a web-based marketplace for artists/entrepreneurs.
The early-stage companies funded by BFTP/NEP are:
  • A Sound Strategy,  East Stroudsburg ($30,000), to roll out a national sales effort on software-as-a-service products;
  • Cernostics, Danville ($100,000) to validate tests for risk of esophageal cancer in certain patients;
  • Micro Interventional Devices, Bethlehem ($100,000) to develop a new, minimally invasive heart repair product;
  • OPTiMO Information Technology,  Bloomsburg ($25,000) for sales and marketing of IT products and services;
  • Pivitec, Bethlehem ($70,000) design and commercialization of hardware and software products for audio streaming;
  • Walton Motivation,  Allentown, ($20,000) sales and marketing of cloud-based employee recognition system.
BFT/NEP is also investing in these established manufacturer/academic partnerships:
In Southeastern PA, the recipients are:
 
ARB Geowell, West Conshohocken ($125,000): The company uses a unique design to promote heat transfer for its geothermal heating/cooling platform, which offers higher energy efficiency and eliminates significant construction costs for commercial buildings, schools and developments.
 
Brad’s Raw Chips, Pipersville ($100,000): Founder Brad Gruno wants others to discover the benefits of eating raw food like he did. He uses an advanced dehydration system to keep raw chips crunchy and tasty.
 
Drakontas, Glenside ($250,000): The company provides mobile collaboration software solutions for police, military, fire, emergency response and public service teams. Its flagship DragonFroce product utilizes geo-tracking and shared media and files to help those teams act faster and enhance public safety.
 
Kerathin, Chester ($200,000): The company previously received $150,000 from Ben Franklin for its PodiaPro nail debridement system for the diabetic population.
 
OneTwoSee, Devon ($150,000): Formerly Mobile Reactor, the company targets television broadcasters and producers to help them deliver interactive TV experiences through connected devices.
 
S4 Worldwide, Doylestown ($250,000): The company provides a variety of safety, security and regulatory solutions for drilling companies working in the Marcellus Shale.
 
Tangent Energy Solutions, Kennett Square ($300,000): Commercial and industrial companies can save up to 20 percent on energy costs thanks to Tangent’s grid optimization technologies.

Source: Ben Franklin Technology Partners
Writer: Elise Vider

Erie firm wins Ben Franklin BIG IDEA $$$ to revolutionize the auto insurance industry

For decades, auto insurance rates have been based on standard underwriting criteria: the driver's age and education level, and the make and model of the car.
 
Now a young Erie firm is developing a sophisticated, high-tech approach that analyzes actual driver behavior – fast acceleration, cornering, swerving, hard braking – to define risk and set rates.
 
This week, Advanced Insurance Products & Services got a big boost in its work to further develop an advanced predictive model using its proprietary technology platform as winner of the $50,000 BIG IDEA Business Plan Contest, sponsored by the Ben Franklin Venture Investment Forum and Ben Franklin Technology Partners of Central and Northern PA
 
Jeff Stempora, Advanced's CEO, explains usage based insurance (UBI) like this: a piece of computer hardware – a sort of automotive black box – monitors driver behavior for around 60 days. From that data, Advanced is building mathematical models that define that driver's risk by creating a risk score – similar to a credit score -- and is creating software that allows the insurance companies to accurately price their coverage.
 
Stempora started a UBI-related business on the hardware side in Arizona several years ago before launching Advanced last year. "It became very clear that the future was the information," he says.  "Very few insurance companies know how to [use] that information from those little black boxes."
 
With only about one million American vehicles currently insured using UBI, the market potential is huge for UBI to replace traditional methods of risk assessment. UBI, says Stempora, "has created an arms race in the [auto insurance] industry."
 
Source: Jeff Stempora, Advanced Insurance Products & Services
Writer: Elise Vider

Need funding? Challenge a billionaire to a chess match for $1M in Series A funding like this guy did

How to get the attention of a billionaire? Challenge him to a game of chess. AJ Steigman came up with the idea to play a high stakes chess match with Peter Thiel, co-founder of PayPal, venture capitalist, and top ranked player. 
 
Steigman, who recently relocated his company Soletron to Philadelphia, is looking to win a million dollars in series A funding if he can checkmate Thiel.
 
"Peter and I have very similar backgrounds in chess," says Steigman, who is ranked 2,274 internationally and 2,283 in the US, compared to Thiel, who ranks 2,199 internationally and 2,287 in the US. "In today's economic climate, a lot of people don't have the resources to go after their dreams. This match would signal something to the market, and to entrepreneurs, that unconventional tactics pay off."
 
Steigman, a chess prodigy who's been getting media coverage for his game since age 5, is no stranger to the big leagues. After co-founding Soletron in 2010 with Shane Robinson, he has already created strategic partnerships with top names: Bruce Chizen, former CEO of Adobe and Oracle board member; AND1's Tom Austin; Super Bowl MVP Santonio Holmes; and VCs John Friedman, founder of Easton Capital, and Bob Rice from Tangent Capital. Soletron's legal counsel is Baer Crossey, located here in Philadelphia.

Steigman describes Soletron as Etsy for street wear, and Spotify for retail. "Soletron is a social networking e-commerce platform in lifestyle retail verticals." Holding no inventory of its own, Soletron provides a platform for up and coming designers in Brooklyn, Atlanta, Los Angeles and Philly.
 
The social aspect of Soletron is blowing up, with enormous growth, from 1,000 followers in February to 82,000 today. The company blog boasts 5,000 articles, and Steigman says a patent-pending social networking technology is the driving force moving forward.
 
Steigman is currently participating in a summer internship program at Wharton, and plans to make Philadelphia his permanent home, after living in over seven cities in the past year. "I really want to relocate and centralize," says the South Florida native.
 
The chess match concept appeals to an international audience, and is beginning to get worldwide press. Steigman awaits Thiel's response. "I don't know any sport or activity where someone has challenged someone else for an investment."

Source: AJ Steigman, Soletron
Writer: Sue Spolan

For the rest of Greater Philadelphia's latest and greatest, sign up here to receive Flying Kite in your inbox for free every week.

Have a commercial idea in electronics or robotics? Innovation Works wants to hear from you

Bossa Nova Robotics in Pittsburgh  did it, turning its technology into a line of children's toys. Pittsburgh's Red Zone Robotics did it, too, creating a marketable, high-tech solution to sewer inspections.

Steel City Optronics in Sarver hopes to do it by building a compact airborne mapping system. And Wilkes-Barre's Data Makes the Difference is hoping to do it too, developing software and a web interface to monitor autistic behavior.

Now, maybe you can do it:  that is turn an innovative idea in electronics or robotics into a commercial product or service.

Innovation Works  will award up to $800,000 in technology commercialization funding to universities, early-stage and established companies anywhere in Pennsylvania. Individual projects are eligible for up to $100,000.

"The Technology Commercialization Initiative (TCI) aims to establish and grow a leading industry presence in Pennsylvania focused on market segments in digital multimedia, digital networking and robotics applications," says Chuck Brandt, vice president, technology programs for Innovation Works.

TCI, now under the auspices of the Ben Franklin Technology Partners of Southwestern PA, has funded over 180 technology commercialization projects totaling $27.8 million in awards since its inception in 1999.

The current round of funding will be awarded through a competitive selection process for projects that address key engineering design challenges, show a high degree of innovation, and, most importantly, identify a clear path to commercialization with the potential to significantly impact digital and/or robotics-related companies in Pennsylvania.

Still want to do it? Draft proposal submissions for the current funding round are due Aug. 3, with final proposal submissions due Sept. 7.

Source: Chuck Brandt, Innovation Works
Writer: Elise Vider

New Castle's Epiphany towards a solar solution to fracking waste

One environmental challenge of extracting natural gas from the Marcellus Shale has been treatment of the "flowback water" that rises to the surface during the fracking process.
 
Now CONSOL Energy,  based in Pittsburgh, has made an initial $500,000 investment to acquire a minority stake in Epiphany Solar Water Systems, a small company in New Castle. CONSOL will also provide one of its Marcellus gas well locations in Greene County to test Epiphany's proprietary, solar-powered, water purification system. Epiphany has doubled its staff to 10 to accommodate the project.
 
"During this pilot test," says Tom Joseph, Epiphany's founder and CEO, "Epiphany will work to determine the potential of our technology to lower the cost of energy needed to process wastewater by using alternative energy, reduce the risk of waste disposal by processing water on-site and recovering the resultant water, salt, minerals and disposable waste materials, minimize the volume of materials that must be transported off-site for safe disposal, and reduce the amount of truck traffic associated with this aspect of development."
 
"This is the tip of the iceberg," says Epiphany's Jaclene Joseph. "Although huge in terms of specific industry potential, Epiphany's technology is applicable to virtually all facets of water supply regardless of industry."
 
Founded in 2009, Epiphany's goal is to make solar cost-competitive with conventionally powered water purification systems. Epiphany also runs Project Eviive, a non-profit whose mission is to provide water desalination/purification systems throughout the developing world.
 
"Growth in the commercial sector," says Joseph, "will allow funding of units for deployment to underserved, underdeveloped nations."
 
Source: Jaclene Joseph, Epiphany Solar Water Systems
Writer: Elise Vider
 
 

Pittsburgh hiring and funding: Invivodata adds jobs, Cohera Medical raises $8.4M

South Side Pittsburgh-based Invivodata is expanding, adding 28,000 square-feet of space to its office in the Commerce Court building in Station Square. Hiring is underway.

The rapidly growing tech company delivers scientific consulting and direct-from-the-patient data collection services to the global pharmaceutical and medical device industry. 

In other regional job and venture capital news:

*Cohera Medical has raised $8.4 million from private investors in a series D round to support clinical trials for its TissueGlu product in the U.S. as well as the development of several new products in the pipeline.

Net Health Systems in the Strip, a provider of clinical information systems for the rapidly growing field of wound care, is hiring following the news of a significant investment from Spectrum Equity. Net Health declined to offer specifics on the round of funding.

Aquion Energy’s plans to establish a state-of-the-art manufacturing center in Pittsburgh advanced this month with the help of $15 million in venture funding from Horizon Technology Finance Corp. and Silicon Valley Bank. 

Lucas System, Inc., a provider of voice-directed logistics solution assisting retailers, wholesale distributors and manufacturers is hiring software support engineers, project managers, customer support managers and software engineers.

Since 2008, its revenues have grown more than 50 percent as it has added new marquee customers, created partnerships with leading supply chain and warehouse management system providers, and established an international presence in Europe and the Pacific Rim.

Hormann Flexon, LLC, German-based manufacturer of high-performance, industrial doors, is building a 68,000 square-foot facility in Washington County in the Starpoint Business Park near Burgettstown. Construction is expected to begin in late summer 2013. The company will hire about 100 people to start. 

The facility has room to eventually expand to 220,000 square feet. Hormann Group employs more than 6,000 employees worldwide and had sales of more than $1.2 billion last year.

* Audio-visual company Mendtronix Inc. and its subsidiary, Projector Doctor, announced it would open a facility in Latrobe that would employ at least 25 workers. The 15,000-square-foot facility would have a warehouse and repair shop for digital signs, projectors and kiosks serving the New York, Chicago and St. Louis markets. Mendtronix has offices in Atlanta and San Diego.

Newton Consulting, a provider of information technology and human resources management consulting services, has hired five new employees. The company has grown from 25 to 61 people in the last few years. 

* Smart grid technology company BPL Global has opened an office in India as part of the company's on-going efforts to serve the global smart grid market.

Source: Invivodata, Aquion Energy, Hormann Flexon, Mendtronix, Lucas Systems and BPL Global
Writer: Deb Smit

For more of Pittsburgh's latest and greatest, sign up here to receive Pop City in your inbox for free every week.

Allentown’s SunStream Earth builds rainy-day generators

It may not always be sunny in Allentown, but SunStream Earth  is working to see that it doesn’t matter.

The company, launched in 2010, is about to produce a first, small-scale prototype to prove its concept of a solar electrical generator based on a new technology. The product would be smaller and more efficient than conventional solar photovoltaic generators and “would operate whether its cloudy, night or day, without regard to the sun’s rays,” says president Martin Borakove.

SunStream Earth got a significant boost earlier this month with a $110,000 investment from the Ben Franklin Technology Partners of Northeastern Pennsylvania. The funds, says Borakove, will enable the young company to build five additional prototypes over the next year, and to test them at Northampton Community College’s Emerging Technology Applications Center (ETAC) in conjunction with Lehigh University’s Energy and Environmental Research Initiative.

SunStream Earth’s technology uses a proprietary gas that will boil at temperatures below freezing, generating electricity from ambient solar heat – a solar-thermal technology instead of the conventional solar photovoltaic. SunStream Earth’s generator can deliver about 100,000 kilowatt hours yearly on-site, says Borakove, several times more electricity compared to traditional photovoltaic panels of comparable size and at a significantly lower capital cost per kilowatt hour.   
 
The company sees commercial and military applications as its initial prospective markets. Smaller-scale devices for residential applications, storage capacity and even solar farms could be in the future.
 
Source: Martin Borakove, SunSteam Earth
Writer: Elise Vider
 


Promising early-stage firms get capital from Ben Franklin Technology Partners in NEPA

Last week, we reported that the Ben Franklin Technology Partners of Northeastern Pennsylvania had invested more than $340,000 in seven firms at various stages of maturity. This week, we learn that BFT has also opened its coffers to several more early-stage firms that show promise.

The biggest investment, $60,000, went to the cleverly named Taylored Building Solutions in Taylor, Lackawanna County, to complete a computer program to manage the financial function for this manufacturer of high-end modular homes and components for traditional stick-built homes. With this investment, the company will also implement novel marketing and sales strategies.

Cernostics in Danville, received $55,000 to validate a diagnostic and prognostic test that predicts the risk of developing esophageal cancer in patients with Barrett’s Esophagus.

EggZack  in Bethlehem was awarded $30,000 to refine a strategy for assembling a strategic partner network to help EggZack market and sell its software as a service (SaaS) solution to a much larger base of customers.

Viddler, Inc. in  Bethlehem was awarded $33,00 to continue enhancing its selling and marketing activities to extend its positioning as the leading small- to mid-sized business on-line video solutions provider worldwide. 

XiGo Nanotools  in Bethlehem got $50,000 to organize manufacturing policies and procedures to prepare for expanded sales of a patented, shoebox-size device that rapidly measures the wetted surface area of nano-particles using magnetic resonance imaging technology.

Source: Ben Franklin Technology Partners
Writer: Elise Vider

$340K in grants boosts innovation at seven Northeast PA firms

Ben Franklin Technology Partners of Northeastern Pennsylvania has granted $110,000 to Sunstream Earth  to complete construction and testing of a prototype of a new type of solar-powered thermal generator for electricity production. This new technology will allow electricity to be produced on-site utilizing only ambient solar heat, without the need for connection to the power grid. The generator requires a much smaller footprint and is more efficient than conventional solar-generation technologies.

The Allentown early-stage firm is one of seven receiving funds “to help lead northeastern Pennsylvania to a better economic future by building partnerships that develop and apply technology for competitive advantage," according to a news release issued this week.

The other BFTP/NEP investments are:

Alpha Packaging, Bethlehem, $48,000 to implement practices and install equipment to reduce energy consumption by 20% at this manufacturer of plastic bottles and jars.

ArioTech, Bethlehem, $50,000 to customize and deploy a new type of information-sharing platform for hospital-discharged chronically ill patients and their care providers, and pilot the technology in three major northeastern U.S. hospitals.

BioSample Solutions LLC, Bethlehem, $70,000 to complete development and begin commercialization of a proprietary sample preparation technique for application in DNA and RNA extraction technology. 

EcoTech Marine LLC, Bethlehem, $25,000 to improve supply chain processes and plan for expansion into a larger space.

Highwood USA, LLC, Tamaqua, $14,547 to improve heat resistance and impact strength of styrenic plastic, a material used in the production of synthetic wood. 

Vigon International, East Stroudsburg, $25,000 to automate the batch record management system and the work order information system at this manufacturer and supplier of high-quality flavor and fragrance ingredients.

Source: BFTP/NEP
Writer: Elise Vider
 
 

ModCloth raises $25 million, hiring 84 in Pittsburgh

Vintage online retailer ModCloth has closed a $25 million round of funding that will support company expansion and major hiring at Modcloth's three locations in Pittsburgh, Los Angeles and San Francisco. 
 
The Pittsburgh location will hire 84 people alone this year. 
 
"In practical terms, the round is going to translate into large investments in inventory, infrastructure, and the team," reports Eric Kroger who cofounded the company with his now wife, Susan, when they were high school sweethearts living in Pittsburgh. The couple moved to San Francisco when they expanded the company to the West Coast the summer of 2010.
 
"In Pittsburgh, that pretty directly translates into roughly two dozen new technology and merchandising team hires, as well as over 60 new customer care and fulfillment team hires we hope to make this year," he adds. 
 
The funding round was led by Palo-Alto, Calif.-based Norwest Venture Partners.  Existing investors, led by Accel Partners, also participated in the round.  In addition, Josh Goldman of NVP will join the board with members Theresia Gouw Ranzetta of Accel, Josh Kopelman of First Round Capital, Ann Miura-Ko of Floodgate, and co-founders Eric Koger and Susan Gregg Koger.
 
The Krogers launched the company the summer before they attended CMU in 2002. Modcloth has since gained national attention for their success in empowering their community of shoppers through a social commerce platform that generates customer feedback and sales. 
 
The company was named "America's Fastest Growing Retailer" in 2010 by Inc Magazine. Since then, ModCloth has  grown to nearly 300 employees across its three locations. Last year, ModCloth consolidated its fulfillment center and office in Pittsburgh to a 146,000 square foot space in Crafton, Pennsylvania.
 
The online retailer also plans to grow its team in its San Francisco headquarters and Los Angeles locations. 
 
Source: Eric Kroger, ModCloth
Writer: Deb Smit

For more of Pittsburgh's latest, sign up here to receive Pop City in your inbox for free every week.


iPipeline of Exton scores eighth-largest first-quarter VC deal in U.S.

At more than $71 million, a Pennsylvania firm racked up the eighth largest venture capital investment in the country for the first quarter of 2012.

iPipeline, a provider of software services to the insurance and financial services markets, is based in Exton. The investors – whose individual investments were not disclosed – are NewSpring Capital, based in Radnor, Technology Crossover Ventures of Palo Alto and Volition Capital in Boston. 

TCV is the biggest player, with $7.7 billion in capital under management. iPipeline is in heady company here, joining a portfolio that includes  eHarmony, Expedia, Facebook, Groupon, Netflix and Zillow, among others. 

"Our goal is to assume a similar leadership position for the international insurance industry," Tim Wallace, iPipeline's CEO, said in a statement. "Our ability to aggressively invest in customer support, product development and the expansion of our sales and marketing resources will enable us to better support the needs and success of our customers. The acquisition of companies in the U.S. and abroad and organic growth remain key components of our growth strategy."

TCV said it planned to "help the company continue its impressive growth in North America and expand into new markets around the world."

NewSpring is a leading provider of private equity capital to the Mid-Atlantic region and Volition Capital invests in high potential, founder-owned companies across different technology sectors, including software, Internet, information services and tech-enabled services. 

All three companies are represented on iPipeline's board of directors.

Source: PriceWaterhouseCoopers/National Venture Capital Association Money Tree Report; iPipeline
Writer: Elise Vider

SnipSnap's hot streak continues, among six funded by Ben Franklin Technology Partners-Southeast PA

Thirty thousand downloads can't be wrong. SnipSnap was one of six companies to receive a combined $675,000 in funding from Ben Franklin Technology Partners of Southeastern Pennsylvania, announced on Monday.
 
SnipSnap, which won Switch Philly during Philly Tech Week last month, has deveoped technology to allow users to more effectively organize coupons.
 
Also receiving funding were:
 
Zonoff Inc. of Malvern pulled in $200,000 for its suite of home energy automation hardware and software products, the Diplomat Home Control Platform. Zonoff is a spinoff of another Ben Franklin portfolio company, BuLogics.
 
GroupAppz Inc. of Fort Washington earned $150,000 for its development of mobile and web-based apps that improve group-oriented activity like business collaboration and member engagement.
 
PeopleLinx of Philadelphia also earned $150,000 for its business software that shapes and directs employees' use of social media tools.
 
Cross X Platform of Audobon received $100,000 for its shared services solution that includes cloud-based collaborative sales and recruiting engines, efficient back-office support, leadership and capital to increase speed and operational agility.
 
Syandus of Exton took in $25,000 for its digital medical education programs that use learning simulations to help doctors better learn to diagnose and manage diseases. Ben Franklin previously invested $150,000 in the company.
 
Source: Jaron Rhodes, Ben Franklin Technology Partners of Southeastern Pennsylvania
Writer: Joe Petrucci

For more of Greater Philadelphia's latest and greatest, sign up here to receive Flying Kite in your inbox for free every week.

Expansion for Knopp Biosciences, Carnegie Speech and overall Pittsburgh job growth

Growth spurts at two Pittsburgh-based companies are driving hiring at Knopp Biosciences and Carnegie Speech.
 
Drug discovery and development company Knopp Biosciences, working on a breakthrough drug for Lou Gehrig's disease, recently announced executive hires and a company expansion.  Knopp has doubled its research and development lab space to 20,000 feet, now occupying almost two floors at 2100 Wharton Street.  
 
The company grew from 15 to 27 in 2010 and now employs 33, having hired mostly Ph.D.-level biologists and medicinal chemists who have relocated to Pittsburgh.
 
Joining the team is Steven Boyd, Ph.D., formerly of Array BioPharma and Abbot Laboratories, who will lead the newly launched chemistry effort. Ian Reynolds, Ph. D., formerly of Merck & Co. and the University of Pittsburgh, is leading the expanded biological research effort.
 
In other expansion news, Carnegie Speech has appointed Paul Musselman as its new CEO and moved to a larger, new space on Liberty Avenue. The firm has also closed on a $3.4 million series B round of financing, led by Golden Seeds, contributions from New York Angels and returning investor group Osage Venture Partners. 
.  
Musselman joins Carnegie Speech with more than 15 years of executive management and global experience at major technology firms including Intel Capital, IBM, Net Perceptions, Misys and Amdocs. 
 
The companies growth comes at a time of good news for jobs in Pittsburgh. Pittsburgh job growth in March was the strongest of any city in the U.S. outside of Texas. The Bureau of Labor Statistics employment and unemployment figures for March 2012 reveal a bright job growth picture for the region and the lowest unemployment rate in three years. 
 
The seasonally adjusted unemployment rate for March 2012 was 6.7 percent, the lowest rate since February 2009's rate of 6.5 percent. Only three benchmark regions - Minneapolis, Boston, and Richmond - had lower unemployment rates in March, according to PittsburghToday.
 
Source: Knopp Biosciences; Carnegie Speech
Writer: Deb Smit
 
For more of Pittsburgh's latest and greatest, sign up here to receive Pop City in your inbox for free every week.

Pittsburgh companies raise $34.6M first quarter 2012

Pittsburgh companies raised $34.65 million in the first quarter 2012 spread among 22 companies, a strong showing for the region. 
 
By comparison, local companies raised more than $25 million during the first quarter of 2011 and 28.69 million in the first quarter of 2010. The last time more than 22 local companies received funding was 2Q 2009 when 24 companies received $24.85 million.
 
Deals were spread across several industries. Eight medical device and equipment companies received funding, followed by software and IT with eight. The remaining deals were spread evenly among life sciences, media, electronics, robotics and financial service companies.
 
The top deal of the first quarter was $8.5 million raised by Redzone Robotics, funded by Smith Equity Associates, FourWinds Capital Management.
 
Other deals included:
 
Cereve Inc., $7 million, a Pitt spinoff that is developing a cerebral thermal therapy for potential use for insomnia and sleep disorders.
 
Certes Networks Inc., $5.54 million, funded by Adams Capital Management Inc. and NextStage Capital. Formerly Cipher Optics, Certes Networks specializes in network encryption technology. 
 
Carnegie Speech, $2.73 million, developers of spoken language assessment and training software.
 
BodyMedia, $2.73 million to advance its health and wellness armband monitor system.
 
Voci Technologies, $2.41 million through BlueTree Allied Angels, Capital Advisors Elmhurst Group. Voci develops speech-to-text solutions for enterprise applications.
 
Metis Secure Solutions, $1.58 million. Metis designs in-building security notification systems.
 
ALung Technologies, $1.19 million, maker of advanced respiratory products. ALung was funded by Birchmere Ventures and Eagle Ventures. 
 
Applied Isotope Technologies, $1.1 million, creators of tools, products and services for environmental, biological and industrial analyses.
 
Innovation Works funded six companies for a total of $180,000 in the first quarter: Hub19, InsuranceZebra, RoommateFit, WonDay, Accel Diagnositics, ActivAided Orthotics and Headright Games.
 
Cognition Therapeutics, on the forefront of Alzheimer's Research, raised $30,000 from PLSG.
 
Pop City uses figures provided quarterly by the MoneyTree Report by PricewaterhouseCoopers and the National Venture Capital Association, based on data supplied by Thomson Reuters.
 
Source: NVCA
Writer: Deb Smit
 


Calif. investment firm takes over Delaware County's Alarm Capital Alliance, 12-15 hires expected

A large California backer has made an alarming investment in Pennsylvania. Norwest Venture Partners, a $3.7 billion investment firm in Palo Alto, is now majority owner of Alarm Capital Alliance (ACA), providing resources that "will help us pursue multiple strategic growth initiatives," says ACA's CEO Amy Kothari.

Based in Media, ACA is a fast-growing, nationwide security alarm company. The industry measures revenue as "RMR" or recurring monthly revenue. In 2002, when Kothari joined ACA as chief financial officer, RMR was just over $302,000; today it has grown to $3.7 million. 

ACA has an unusual business model, Kothari explains: "The contract you have with your home alarm company is a commodity. Those contracts are bought, sold and traded all the time." ACA acquires accounts held by small, independent alarm companies. Most of these small companies become, in essence, subcontractors, although in some cases, ACA acquires the smaller company outright. Altogether, ACA has more than 160 companies in its portfolio.

Now, with its new (though undisclosed) capital, ACA is pursuing several growth strategies, including a move into direct-to-consumer alarm services, first in Seattle and now expanding into the Philadelphia tri-state region. ACA also sees opportunity in "smart home" technology, allowing for remote control of alarm systems, lights, thermostats, security cameras and more. Most of ACA's 115,000 existing customers have straight burglar and fire alarms so smart home technology has huge potential, Kothari says.

ACA currently employs about 125; Kothari expects to hire 12 to 15 new employees a year and to triple the size of the business in five years. 

Source: Amy Kothari, Alarm Capital Alliance
Writer: Elise Vider
 

State loans $3M to venture capital firm for investments in central, northern PA

New and expanding businesses in the central and northern parts of the state now have more of a shot at getting the money they need to reach their goals.

The Commonwealth Financing Authority recently approved a $3 million loan to Penn Venture Partners, a Harrisburg venture capital firm that invests in companies in the Northern Tier, along with the central and south-central parts of the state. Steven Fishman, venture capital investment advisor with the state, says this loan made sense because the portions of the state outside of the Pittsburgh and Philadelphia areas – affectionately known as the T – often don't get as much attention from traditional investors. "There's a unique need for venture capital in the T," Fishman says.

The $3 million is expected to fund investments in between three and six companies. Plans call for each investment to be between $500,000 and $1 million.

The companies that receive venture capital contributions will be chosen in part on their expectations to create jobs, Fishman says. The money is targeted at new and expanding businesses in sectors including education, software, energy and manufacturing.

The funders are expected to start examining investment opportunities in the coming months and could make their decisions in the next year or so, Fishman says.

Source: Steven Fishman, Department of Community and Economic Development
Writer: Rebecca VanderMeulen

Pittsburgh's Birchmere Labs launches community driven venture fund

A new venture capital fund arrives with Birchmere Labs, a “community driven” approach led by Sean Ammirati, formerly the CEO of mSpoke and COO of ReadWriteWeb.
 
The rapid evolution of software and mobile platforms, coupled with the “always on” of the mobile economy, has given rise to new investment opportunities, explains Ammirati, who has long envisioned bringing the new venture model to the region. 
 
It’s both a seed and a studio fund, he says. The seed fund will invest $100,000 to $200,000 in promising companies. The studio is a growing trend he sees working in other cities, working with companies in a lab setting using an “agile and lean” startup approach. The focus is on viral growth and commerce with  a transaction-based revenue model. 
 
“It’s not like Alpha Lab, despite the name,” he adds. “It’s totally unique. It’s much easier than ever to create a startup in the mobile space today. The capital cost is really different. You can stand on the giants and use their mobile platforms to accelerate the speed with which you develop these companies.”
 
Ammirati joins the investment team of Pittsburgh-based Birchmere Ventures as the lead partner for Birchmere Labs. He will continue to remain active in the local entrepreneurial community, advising Alpha Lab companies on the South Side and organizing Innovations Happens for Innovation Works. 
 
He is also an adjunct professor of entrepreneurship at the Tepper School of Business at Carnegie Mellon University.
 
While Birchmere Labs will be looking to fund deals nationally, Pittsburgh companies will also be in the running, a win for the region says Rich Lunak of Innovation Works. 
 
“I think having an innovative fund like Birchmere Labs located in Pittsburgh continues to reinforce our strengths in these technology sectors,” says Lunak. “And, it creates another funding source to potentially help fuel the region’s high-potential startups.”
 
Source: Sean Ammirati, Birchmere Labs
Writer: Deb Smit
 
For more on Pittsburgh's latest and greatest, sign up here to receive Pop City in your inbox for free every week. 
 

Reading-area company focuses on market research for new and small businesses

Any company planning to launch a new product or service would benefit from conducting research on how potential customers will receive it. But this is out of reach for most startups and small businesses, which tend not to have enough money for market research in their budgets.

That doesn't make sense since most American businesses are small, says the owner of Paradigm2, which recently moved from Ohio to West Reading. The research company founded by Wil Readinger, a native of the Reading area, focuses on startups and small businesses, like technology firms, doctors' offices and small retailers.

Kevin Gabbard, lead research analyst at Paradigm2, says his company is different from others because it studies how people choose different products or services rather than just figuring out which ones they prefer. This is more cost-effective because clients don't have to go through the research process every time their product or service changes, he says.

Paradigm2's process starts with an initial study of a company's competitors and how many others are in the same niche. Then it conducts in-depth interviews with possible customers about how they choose which products they use and how they expect to use them. The company's studies also include research on how potential customers feel about paying certain prices for a product or service and how to reach the marketplace most effectively.

Gabbard says his business worked with a venture capital group and its portfolio companies in Ohio and hopes to do the same in its new home. "They're the innovators, and they're the people who are in this critical period," he says.

Source: Kevin Gabbard, Paradigm2
Writer: Rebecca VanderMeulen

Vascular Magnetics' $7M Series A round shows impact of Science Center's QED program, company's team

Fresh off a $7 million round of Series A financing, Richard Woodward says without hesitation that the company he co-founded, Vascular Magnetics, would not exist without the first-of-its-kind QED Proof of Concept Funding Program at the University City Science Center.

A veteran executive from the biotech sector with extensive startup and early stage experience, Woodward was semi-retired and consulting in 2009 when he learned about the QED program, which assesses white papers on promising technologies and links the best with a business advisor and the possibility of funding. In the case of Vascular Magnetics, Woodward was paired with Dr. Robert J. Levy of The Children’s Hospital of Philadelphia and they were awarded $200,000 by the QED program in 2010.  The result was CHOP’s first spin-out company, focused on developing its proprietary, magnetically targeted drug delivery system for the treatment of peripheral artery disease (PAD).

“I was joking with my wife that this would have been a whole lot easier when I was 40,” Woodward says. “She said that when I was 40, I wouldn’t have had any idea what to do.”

In one respect, Woodward has come full circle with CHOP. His daughter had a medical condition that incapacitated her for her a couple years and a physician from CHOP helped contain the ailment, allowing Woodward’s daughter to pursue a career working for another children’s hospital.

“Dr. Levy, I have so much respect for that man,” says Woodward, the COO, of the company’s founding scientist. “He’s brilliant and a very prolific inventor, with something on the order of 31 issued patents. He probably has another 30 in various stages of the application process.

“It’s fairly rare to find an academic like that.”

The entire Series A round was funded by Wayne-based Devon Park Bioventures, whose general partners Christopher Moller and Marc Ostro will join the Vascular Magnetics board and rounds out a compelling case study of the potential of Greater Philadelphia's entrepreneurial ecosystem. Funds will allow the company to complete clinical trials, which are expected to begin in 2014. While the company will stay “aggressively virtual,” according to Woodward, there’s a good chance it will hire up to two more individuals. Also, the company is planning on maintaining workspace in the Science Center’s Port Business Incubator.

PAD effects about 30 million in Europe and North America, including 10 million in the U.S. Vascular Magnetics’ system aims to provide a more durable and effective treatment than angioplasty, grafts and drug eluting stents. It does this by combining biodegradeable, magnetic drug-loaded particles, a magnetic targeting catheter and an external device for creating a uniform magnetic field.

Woodward says some of Levy’s team at CHOP will be involved as consultants.

“These are some of the people that have developed the whole system. It’s important to have them around.”

Writer: Joe Petrucci
Source: Richard Woodward, Vascular Magnetics

Photos courtesy of Vascular Magnetics
Richard Woodward
Dr. Robert Levy

SeedPhilly aims to connect startups with investors: "Don't find us, we'll find you"

Brad Denenberg knows how to generate buzz, and the local entrepreneur has been cultivating a high level of interest for months before SeedPhilly officially opens at 1650 Arch St. in Center City.

Part tech incubator, part shared workspace, and part online resource, Denenberg sees SeedPhilly at its most basic level as a place for entrepreneurs to connect with investors. 
 
Back in August of 2011, Denenberg met with me at the newly opened Milkboy Philly to talk about SeedPhilly, but more important, to talk about how I was not allowed to write about it yet. In the middle of our conversation, the entire place started to rumble, and then slowly undulate. Some kind of mover and shaker. Philadelphia's great earthquake of 2011 rolled straight through that first meeting.
 
Now, finally, the story can be told. In the process of meeting dozens of area entrepreneurs, investors and members of the press, Denenberg managed to make an indelible impression and create a hunger for the moment when the story was allowed to go public.
 
Denenberg, working with Yuriy Porytko, who is doing community outreach, has taken over space vacated by the defunct law firm Wolf Block, and is now in the process of outfitting the expanse with room for up to 50 people, half in an open area, and half in window offices flanking the bullpen.
 
SeedPhilly, which has applied for non-profit status, differentiates itself from other incubators and co-working spaces because, says Denenberg, the companies will be curated. "I co-founded Philly Startup Leaders," says Denenberg of the local group that runs a very popular listserv. "The same questions were being asked over and over."

It was the need for a central database of local information that planted the seed for the SeedPhilly database, which is one of the three components of Denenberg's plan, along with the coworking space and a plan to bring investors and entrepreneurs together. 
 
"Entrepreneurs were saying, find them an investor, and investors were saying, find them an entrepreneur," recalls Denenberg, who feels that while there is no shortage of either startups or seed money in the Delaware Valley, until now, there's been no centralized spot for meeting up.
 
Denenberg, using personal funds to outfit and run the SeedPhilly office, will soon be bringing on participants, who will be expected to remain for no more than 18 months. SeedPhilly will not take an equity share; rather, it will generate revenue by charging a monthly fee of $325 per desk and $700-1,200 per office, which can fit up to four people.
 
SeedPhilly plans to hold regular classes, the first of which is a four week Microsoft Windows Phone development course. And he plans to schedule a steady stream of investors who will give talks, take meetings, or just drop in for a casual cup of coffee and a chat.
 
As far as the application process? Denenberg replies, "Don't find us. We'll find you."

Source: Brad Denenberg, SeedPhilly
Writer: Sue Spolan

For more of Greater Philadelphia's latest and greatest, sign up here to receive Flying Kite in your inbox for free every week.
 

Conshohocken's PackLate doubling staff, making global moves

You can PackLate if you want to. Steve Barsh, CEO of the Conshohocken based vacation rental company, reports explosive growth in recent months following a deal with Travel Holdings Inc., and its better known subsidiary Tourico Holidays, a worldwide distributor of vacation property rentals via massive travel sites. "If you go on the American Airlines website and book a vacation home, it’s a PackLate property," explains Barsh, as one example.  While PackLate's involvement  on these larger sites is unbranded, according to Barsh, PackLate still reaps the benefits, receiving a commission for each rental.

After raising $1 million in seed funding from colleagues in the VC world, PackLate is poised to double staff this year. With six employees now, Barsh is actively seeking developers to expand the business. He is also looking for office space in Center City, and has a very specific picture in his head: a century old, well-varnished hardwood floors, lots of light and exposed brick. PackLate, reports Barsh, is also about to enter a series A round of fundraising.

The company started for fairly personal reasons. Barsh, an entrepreneur and venture capitalist who was a partner in DreamIt Ventures, owns vacation rental properties in Park City, Utah. While trying to rent the properties through popular sites like VRBO, he and his wife realized that there was a lot lacking, like real time functionality. Typically, a renter locates an owner's listing, inquires via email or phone, sends a check and waits for confirmation. The whole process from discovery to confirmation can take days.

By contrast, PackLate provides instant payment and instant confirmation. The other big difference bedsides timeliness, says Barsh, is that PackLate works solely with property managers, not individual owners, and that’s how it is able to offer real time booking capability. It’s a different psychographic from AirBnB customers, says Barsh. PackLate started as a B to C company, and Barsh describes the recent partnership with Travel Holdings as a 90 degree pivot, repositioning as a B to B company and solving a distribution problem. It is still possible, additionally, for individuals to book properties on the site directly.

The great majority of PackLate bookings are inbound US travelers, with Florida at the top of the itinerary. He notes that Orlando is the number 2 travel destination in the world, bested only by Paris. Vacation homes are hot right now, says Barsh. People the world over crave an authentic travel experience, as opposed to a hotel stay.

If you are interested in joining the PackLate team, the top job requirement is a positive attitude, says Barsh, who offers unlimited vacation time and lots of travel for interested developers.

Source: Steve Barsh, PackLate
Writer: Sue Spolan

Ben Franklin business plan contest to award $50,000 to a promising startup in Central, Northern PA

The Ben Franklin Technology Partners, an organization that provides money and support services to tech businesses, is sponsoring another business plan contest similar to competitions it has put on over the last decade.

The Big Idea Business Plan Contest, open to entrepreneurs that are already based in a 32-county area or are planning to move there by June, comes with a $50,000 prize for the winner. Judges are looking for promising business ideas in areas like alternative energy, medical devices and nanotechnology. Entrants cannot have received Ben Franklin funding before and must have 50 employees or fewer. The eligible geographic area includes most of the state's central, northern and western regions.

"It's really for young, fledgling companies, to give them an opportunity to a) win $50,000 and b) get into the network of economic development service providers," says Jill Edwards, executive director of the Ben Franklin Venture Investment Forum and Innovation Transfer Network. "We recognize that this region of Pennsylvania has strengths in a whole array of different areas."

She adds that any company that enters the contest will become known to the Ben Franklin investment network, which opens up other opportunities for funding for help with the process of growing a business.

The contest deadline is Feb. 29 and final judging is expected in June.
 
Source: Jill Edwards, Ben Franklin Venture Investment Forum /Innovation Transfer Network
Writer: Rebecca VanderMeulen

Five cool websites launched in Pennsylvania in 2011

Your new favorite website just might have been started right here in the Keystone State. Check out these sites we found in 2011:

1. ElectNext: Before you step in the voting booth, answer a questionnaire about your political views and learn which candidate best reflects how you think. Part of DreamIt Ventures' accelerator program in Philadelphia.

2. AreYouCatholic.com: Catholics from more than 120 parishes across the globe post prayer requests and share good deeds they've accomplished. Launched by Brian Pedone, a serial entrepreneur from the Poconos.

3. Bookzingo: Buy textbooks from students on your campus or sell to fellow students. Started by a senior at the University of Pittsburgh.

4. CliqSearch: Crawls social media for what your friends (and their friends) think of businesses like restaurants and hair salons. Based in Philadelphia.

5. Nearbid: Auction your professional services to locals or find a nearby contractor for a job you need done. Run by two brothers from Scranton.

Writer: Rebecca VanderMeulen

Device from Bethlehem startup would make new heart valves available to more patients

Surgeons have two main methods for replacing heart valves, which regulate the flow of blood within the heart. One method involves traditional heart surgery and a newer method involves flexible tubes called catheters. But some patients who would benefit from new valves can't have surgery now because the risk is deemed too high.

Micro Interventional Devices, a Bethlehem startup employing six people, is working to change that. The company is developing a new device called Permaseal, which eliminates the need for surgeons to stitch tissues back together during surgery. The company's VP of scientific affairs, Bill Hennemann, explains that Permaseal is designed to be inserted before the catheter. The type of surgery that would be best for the device essentially requires inserting the catheter though a certain part of the heart's lower left chamber. Permaseal puts soft tissue in that area to work so stitches aren't necessary.

"Our goal is not to change the procedure, but to make it better," Hennemann says. The company's aim is to increase the number of high-risk patients who can receive surgery.

Micro Interventional Devices is receiving $100,000 from the Ben Franklin Technology Partners of Northeastern Pennsylvania to refine and market its device. The company expects to start clinical trials next year and put Permaseal on the market later in 2012.

Source: Bill Hennemann, Micro Interventional Devices
Writer: Rebecca VanderMeulen

Lots of activity on DreamIt's Demo Day in Philly as 14 companies move on

When shots of Jameson's are poured, stacked three deep and consumed with great aplomb, it must be DreamIt Ventures demo day. But that's getting ahead of the story, because the libations came only after the presentations were given, after the business cards were handed out, and after 12 intense weeks of entrepreneurial incubation.

"Demo Day was a great success. All 14 companies had strong presentations and we had a full house of investors. The companies' booths were packed with interest until we had to exit the building! It’s one of the strongest classes that we’ve had at DreamIt," remarks Kerry Rupp, DreamIt managing partner.


The 2011 Philadelphia DreamIt Ventures class wrapped up last Wednesday in University City at World Cafe Live. Just a few blocks from DreamIt offices at 34th and Market, fourteen startups presented polished seven minute pitches. There were clear front runners; three have been selected for a brand new 6 month Philadelphia entrepreneurial program, details of which cannot yet be divulged.

ElectNext, Cloudmine and SnipSnap are all slated to move on to the program, which has not yet been publicly announced. While the companies planned to announce their acceptance into the project at Demo day, last minute alterations to slide decks were necessary to excise all references. ElectNext also got a same-day bump with a Fast Company article featuring founder Keya Dannenbaum.

One company, UXFlip, started life at DreamIt as FeedbackTrail, but 8 weeks into the program, founder and CEO Michael Raber says he had to drop and turn on a dime when it became clear that FeedbackTrail was not going to be a long term revenue generator. With three weeks left in the DreamIt program, Raber created UXFlip, which will allow mobile app developers to make changes without forcing a user-end update.

Spling, a social media content sharing platform, is the standout for raising a $400,000 Series A round of funding during DreamIt.

"The companies represent the best and brightest entrepreneurial talent in the Internet & mobile space. They include PhD’s and JDs from top academic institutions like Yale, Stanford and UT, as well as dropouts from top academic institutions like Duke, Georgetown and the Wharton School at Penn," adds Rupp, who notes that one company's founders are still in their teens.

"Five of the companies were selected in partnership with Comcast Ventures, as part of the Minority Entrepreneur Accelerator Program (MEAP)," says Rupp. "ElectNext, Kwelia, MetaLayer, ThaTrunk and Qwite include owners who are African American, Asian, Hispanic and Indian."

The afterparty, and the shots, went down at National Mechanics, the go-to bar for the local tech community. It got loud, but you've got to forgive the crowd. It was the last time they'd all be together in one room. The companies have a week to pack up and move on. None received checks or solid offers at Demo Day, but a lot of cards were exchanged and some promises made. At happy hour, companies compared the size of their spikes -- on Google Analytics.

Up next, according to Noelle McHugh, DreamIt's office manager and MacGyver, the team goes north to New York City for DreamIt 2012, which begins in March. Applications for the NYC DreamIt class open on December 26th, with a March 16 deadline for companies, and an April 6 2012 deadline for individuals. The New York class begins in mid-May of next year, and at the same time, applications for the 2012 Philadelphia program open.

Source: Kerry Rupp, Noelle McHugh, DreamIt Ventures
Writer: Sue Spolan

For more of Greater Philadelphia's latest and greatest, sign up here to receive Flying Kite in your inbox for free every week.

Southwest PA picks up $15M-plus in year-end venture deals; hiring and other news

More than $15 million settled in the region during final quarter 2011 activity, including venture capital dollars and grant funding, some promising to bring company hiring. 
 
ALung Technologies Inc. closed on $9 million of a $10 million capital raise from previous investors, mostly high-net-worth individuals. Birchmere Ventures led the Series B with a $2 million investment. The money will fund operations and commercialization of its artificial lung, the Hemolung System. ALung expects to hire three to five people, mostly technicians, in Pittsburgh (and three to five in Europe) as manufacturing ramps up. 
 
Life Sciences company Flexuspine raised $2.1 million from existing investors to further the development of a Functional Spinal Unit, an implant that replaces the entire lumbar segment in the spine giving patients a fuller range of motion than possible through existing surgery. The money will be used for further pilot studies and to launch the product in Europe upon its approval there.
 
Pitt’s Institute for Entrepreneurial Excellence, the Hill House Association, and the Pittsburgh Central Keystone Innovation Zone (PCKIZ) have been awarded a $1.95 million grant from the multi-agency Jobs and Innovation Accelerator Challenge. The funds will be used to fuel the creation of jobs in the energy and medical industries in several Pittsburgh communities: the Hill District, East Liberty, Garfield, Larimer, Lincoln, and Homewood.
 
HealthpointCapital purchased East Liberty-based Blue Belt Technologies, a Carnegie Mellon spinoff that has been developing "smart" surgical instruments for orthopedic and other specialties. BlueBelt will remain in Pittsburgh and add as many 30 employees as the result of the acquisition.  Manufacturing will remain in Pittsburgh for now, but may move in the coming year. The first tool, the Navio PFS, will be available to surgeons by late next year. 
 
South Side medical device company Thermal Therapeutics Systems is going global, named a new president and CEO and made a $2 million private offering to its investors. Approvals are expected soon for the product's release on the European market, says CEO Gardiner F.H. Smith. The firm's co-founder and previous CEO, Raymond F. Vennare, will serve as executive vice president for strategic planning.
 
The firm's device, the VeraTherm, is a portable, heated pump used physicians in the treatment of abdominal cancer surgeries to kill cancer cells more effectively. The firm is considering expanding into Canada and China.
 
The Resumator, creators of an online resume and hiring management tool, is looking for room to grow. The firm is also hiring for 10 positions on its Facebook page.  CEO Don Chartlton hopes to reach 30 people in the coming year.
 
TrueFit, a firm that assists startups and larger enterprises in bringing new product ideas to market, has added seven members to its team as a result of company growth. The firm plans to add additional staff in mobile applications and web development in the coming year.
 
And a final note, independent filmmaker and journalist Kirsi Jansa received $50,000 from The Heinz Endowments for her project, "Gas Rush Stories," a series of short documentaries on the impact of gas drilling in southwestern PA
 
Source: The Pittsburgh Technology Council, Innovation Works and the
companies
Writer: Deb Smit
 

For more of Pittsburgh's latest and greatest, sign up here to receive Pop City in your inbox for free every week.

Venture Idol: Bethlehem company's appliance backup to be sold on national TV

Next time you tune into the TV shopping channel QVC, you might see a product, direct from Bethlehem, that might salvage your sanity during the next power outage.

The Illumagard, manufactured by a startup called Electrikus and sold for a suggested price of $49.99, charges lamps and turns them on automatically when the electricity goes out. All you have to do is plug your table or floor lamp into the device.

"If there's a power outage it will keep your lamp burning brightly for 10 hours," explains Jeff Shakespeare, chief technology officer. His house had no electricity for five days after this year's Halloween weekend snowstorm, but he had plenty of light thanks to strategically placed Illumagards.

"I could read a book," Shakespeare says. "I could play a board game."

Perhaps memories of that storm, and of the havoc Hurricane Irene wreaked in late August, helped Electrikus win last month's Ben Franklin Venture Idol, hosted by the Ben Franklin Technology Partners of Northeastern Pennsylvania. An audience that included professional investors chose the company as the most promising out of three that presented their products and services. The prize was a $5,000 investment from Ben Franklin.

Next Electrikus plans to sell a backup for refrigerator and freezer units, with a prototype expected in the next few weeks. The goal is for the device to keep a refrigerator running for up to four days. Plus, owners will be able to program the unit to draw power from the grid during off-peak hours.

Source: Jeff Shakespeare, Electrikus
Writer: Rebecca VanderMeulen

BlueTree Allied Angels launches new chapter in Erie

Erie is a promising place for entrepreneurs seeking their fortunes in new technologies and products. That's clear by examining area startups and the impact of institutions like Penn State Erie and the Erie Technology Incubator at Gannon University.

After being alerted to this fact the BlueTree Allied Angels, an angel-investor group based in the Pittsburgh suburb of Wexford, explored the idea of starting an Erie chapter. That chapter launched in February and now counts 14 investors as members. The group would love to add more. "There is a critical mass of credible investors in the area," says Catherine Mott, CEO of BlueTree's sister company, BlueTree Capital Group. "What makes an angel group strong is not just aggregating your money, but aggregating your knowledge."

The Erie chapter hasn't invested in any companies yet. Mott foresees its portfolio including sectors that already have a presence in the region, such as online security, medical devices and information technology.

She hopes this relationship between investors in the two major cities in western PA will evolve into a partnership among the wider region. Mott would love to see investors in the Sharon and Hermitage areas join BlueTree as well. "I would like to see the whole western PA corridor connected together," she says.

Source: Catherine Mott, BlueTree Capital Group
Writer: Rebecca VanderMeulen

Search challenger DuckDuckGo expands to new office in Paoli, hiring

How much smaller is the bubble going to get? If Google and Facebook have anything to say about it, predictive search will narrow your results to the size of bath bubbles, one cell of information at a time.

Enter DuckDuckGo, a search engine challenger to the big guys that aims to burst the bubble, offering a disruptive paradigm worth $3 million in recently raised first round VC funding, which also allows for DuckDuckGo's physical expansion, from self-funded, home-based business to offices in Paoli, Chester County, by next month. The company now has two full time employees and four contractors, with plans to double staff by the end of 2012.

MIT-educated Gabriel Weinberg is the mind behind the engine. He launched his company in 2008, garnering national press. "I was well aware of Google's domination but it didn't phase me," says Weinberg. "It's not my goal to make a dent. One of my reasons for starting DuckDuckGo was the feeling that Google was too cluttered with ads and commercial results." 

Ad clutter's not the only thing DuckDuckGoes after. Another feature is Zero Click, aka goodies, which are all free and open source. Type your query into the search box to get instant results for complex calculations, recipes, and statistics, rather than just links to web pages with answers. Weinberg and team are adding new features constantly, with growing contributions via open source channels.

To get the eye of the tech elite, DuckDuckGo rented a high traffic billboard in the SF Bay area at a cost of $7000 for two weeks. Weinberg, who grew up in Atlanta and went to school in Boston, strategically chose the Philadelphia area, and specifically Valley Forge, to raise a family and grow the business.

Weinberg attributes the surge of interest in DuckDuckGo as "a bunch of threads coming together," citing an increase in people looking for alternatives and growing concern about spam and privacy.

On privacy, and its increasing lack thereof, Weinberg says, "A large percentage of people would like their privacy reasonably protected if they had real choices and were educated on the issues."

Source: Gabriel Weinberg, DuckDuckGo
Writer: Sue Spolan

For more of Greater Philadelphia's latest and greatest, sign up here to receive Flying Kite in your inbox for free every week.

New state fund to provide money for college energy-saving projects

Pennsylvania colleges that are looking for ways to use less energy could get financial help from a new pot of money just for that purpose.

Earlier this month the state treasury and Blue Hill Partners, a Philadelphia investment firm that focuses on green technology, announced their partnership on the Campus Energy Efficiency Fund. The fund is expected to give up to $45 million, with up to $10 million of that coming from the state, to between 10 and 12 schools. In turn, estimates say that over the next two decades, the funded projects will save $150 million in energy costs. Public and private colleges all over the state are eligible for money for projects like upgrades to lights and heating and cooling systems. Drexel University is the first college to participate as part of energy-saving upgrades to six buildings on its Philadelphia campus.

Blue Hill already works for the treasury, managing a state venture fund. Joyce Ferris, managing partner for Blue Hill, said the state asked it to manage the Campus Energy Efficiency Fund. It was a natural fit, since Ferris says cost is one obstacle she's seen to energy-saving technologies taking off. "Building owners didn't have the money, especially for retrofits," she says.

Colleges that take part in the program will receive assistance from experts who will help them design specific energy-saving projects. Those professionals will be paid through the fund. "We think that this is really going to prove to be a national model," Ferris says.

Source: Joyce Ferris, Blue Hill Partners
Writer: Rebecca VanderMeulen

Conshohocken software startup VCopious receives funding, expects to double staff by end of 2012

VCopious is expanding rapidly. The nine month-old, Conshohocken-based software company just announced it has received funding of an undisclosed amount from a consortium of four funders, including Ben Franklin Technology Partners of Southeastern PA, Emerald Stage2 Ventures, MAG and Silicon Valley Bank.

CEO Ken Hayward says VCopious is now "into a stage of development geared toward market facing activity," and capital raised in this round of funding will go toward global expansion. VCopious also announced that Siemens Corporation has signed a multi-year agreement to use the VC2 platform, billed as the "world's first virtual spaces application server appliance." The firewalled networking, socializing and tracking tool allows people to meet in cyberspace, regardless of physical location.

VCopious already has a strong relationship with SAP, which it counted as one of its first customers. "It's a proven model," says Hayward of the technology that was built with no original outside financing. "Unlike other tech startups that are trying to raise money to build the technology, we've been out raising money to expand market activities."

The next step for VCopious is to build out a sales organization that's focused on high level direct sales to enterprise, and then find distribution partners that will move the product beyond the reach of its own direct sales force, according to Hayward. "One of the most sought-after destinations is around collaboration, ecommerce and social media. Between those, the VCopious platform is an aggregation tool for all those capabilities."

While Hayward will not talk about revenue or company growth in concrete terms, he projects that the company's staff will double by the end of 2012, from 25 to 50 employees, which is impressive for a company that only launched in early 2010.

Source: Ken Hayward, VCopious
Writer: Sue Spolan

For more of Greater Philadelphia's latest and greatest, sign up here to receive Pop City in your inbox for free every week.
 

Pittsburgh raises almost $35M in third-quarter venture capital; Thorley Industries hiring 20-plus

Pittsburgh venture capital deals topped $34 million in the third quarter of 2011, according to the National Venture Capital Association.
 
In addition, Thorley Industries is working on a $5 million funding round and plans to expand its headquarters and double the size of its workforce. A maker of products for children and families, Thorley's growth is being spurred by the anticipated launch of its roboticized stroller, the Origami, which power folds with a touch of a button and comes with several custom options.
 
Thorley has a workforce of 24 and hopes to double in size to 43 people by the end of March, 2012, says CEO Rob Daley. (Click here for jobs.) The company projects 2011 sales of $7.4 million, up from $3.2 million last year. The additional funds will assist with expansion plans and R&D.
 
In terms of venture funding, Acquion Energy, makers of a revolutionary battery, topped the list with $30 million. Other companies receiving funding included: Bridge Semiconductor Corp., $1.65 million; Lama Lab, $1.18 million; Medallion Analytics Software Corp, $1.10 million and ReGear Life Sciences, $500,000.
 
Startups receiving funds were ShoeFitr ($100,000); Flashgroup ($100,000), PHRQL ($30,000), VitaClip ($30,000) and Zenith (n/a).
 
The Pa. Energy Development Authority is splitting $3.7 million among 13 clean energy projects across the city, Pittsburgh among them. The City of Pittsburgh is receiving funding to replace four diesel-powered waste trucks with vehicles that run on natural gas vehicles. EQT Corp. is a partner on the deal.  
 
BlueTree Allied Angels has joined with four other high-net-worth investors from outside of the region to form the Life Science Angel Network. This will allow the Wexford-based angel firm to jointly invest in life science startups and bring more money into the region.
 
Source: NVCA; Rob Daley, Thorley; Catherine Mott, BlueTree Allied Angels
Writer: Deb Smit
 
 

Early stage ulcer detector among stars of 3 Rivers Venture Fair

What do you get when you put 34 startups together with more than 600 investors, business leaders and other entrepreneurs, and toss in 14 featured inventors from Pittsburgh universities? 
 
Creative sparks, cutting-edge technologies and, hopefully, lots of venture capital, says Kelly Szekjo, president of Pittsburgh Venture Capital Association, the organization that staged the 3 Rivers Venture Fair that was held last week at the Lexus Club at PNC Park.
 
While it's too soon to tell how successful this year's event was in terms of dollars raised, many expressed excitement for the technology showcase, a first this year, which featured innovative life science and technology inventions by Pitt and CMU students who gave 3-minute pitches. Among the inventions was Classroom Salon, which turns online reading by students into a communal classroom experience, to Nano-pathology, an optical cancer detection technology.
 
The big winner of the American Idol-like competition was Sanna Gaspard, a Ph.D. in biomedical engineering from CMU, who is developing a patent-pending, low-cost, non-invasive device, the Rubitect, capable of detecting early stage pressure ulcers. Gaspard took first place, including $2,500, and generated a buzz for the device, which would save hospitals $120,000 a year with a minimal seed investment of $500,000. 
 
"While they were very early stage, the 14 spin-out technologies developed from the University of Pittsburgh and Carnegie Mellon University that we showcased were well received," says Szekjo. "Investors were quite enthusiastic about a number of the 34 presenting companies so I am eager to see how this excitement translates into actual dollars invested."  
 
Since 2002, the 3RVF has provided a capital-raising forum for more than 175 companies that have gone on to raise more than $340 million as a direct result of the fair.
 
Source: Kelly Szekjo, 3RVF
Writer: Deb Smit
 
For more of Pittsburgh's latest and greatest, sign up here to receive Pop City in your inbox for free every week.
 

King of Prussia clinical research firm doubling staff

Put that paperwork down. Greenphire is fundamentally changing the entire clinical research industry. The King of Prussia based company has two products, ClinCard and eClinical GPS, designed to streamline clinical research studies. The technology is working, and it's well received, having just closed a round of Series A funding led by FirstMark Capital, on the heels of Ben Franklin Technology Partners funding last year.

Greenphire's COO John Samar reports that this year, the company will achieve 300 percent revenue growth over last year, currently serving 200 customers including big name pharma, biotech and medical device companies. Just four years ago Greenphire consisted of Samar and co-founder/CEO Sam Whitaker, and with the cash influx, the company is hiring. Samar estimates that the current staff of 16 will double by spring of 2012. Currently, there are three openings: VP Program Management, Program Manager and Office Manager/Client Support/Bookkeeper.

ClinCard, says Samar, is Greenphire's debit card based product that handles payments for participation in clinical research trials, adding email and SMS functionality to keep patients engaged in studies. Participants receive tailored messaging and appointment reminders.

"There are a lot of value adds that result from the way we package," says Samar. "Sponsors get cleaner, more robust data, and patients are happier. The whole clinical research industry is realizing that it needs to be more patient centered." Increased compliance on both sides of the equation, from patients to paperwork, sets ClinCard in its own class, and it's not hard to see how Greenphire's technology could be applied to a much wider healthcare market.

But Samar says right now Greenphire is sticking to its expertise in the clinical research sector, and this year launched its second product, eClinical-GPS (Global Payment System) to address payments involved in the execution of the study. So, for example, if a clinician draws blood, reimbursement -- which previously took 6 to 8 months -- now arrives within three days.

The high growth private company is partnering with Mytrus for Pfizer's virtual clinical trial program that allows participants to remain at home, using electronic communication tools to recruit, retain and administer studies.

Source: John Samar, Greenphire
Writer: Sue Spolan

For more of Greater Philadelphia's latest and greatest, sign up here to receive Flying Kite in your inbox for free every week.

Million dollar investments for Pittsburgh's Acquion, RedZone and more

Several Pittsburgh companies landed large venture capital and grant funding in the millions this month and several made major announcements. Here's a roundup on the news from Acquion Energy, RedZone Robotics, Cohera Medical, ChemImage, Carbon Capture Scientific and Ortho-Tag.
 
Lawrenceville-based Aquion Energy, Inc., developer and maker of a next generation, green, non-toxic batteries with a remarkable energy storage capacity, has closed on the final $10 million of a $30 million round of venture financing. Foundation Capital led the round with participation from returning investor Kleiner Perkins Caufield & Byers and new investors Advanced Technology Ventures and TriplePoint Capital.
 
Aquion is currently selecting a site for a high-volume, state-of-the-art battery factory in the U.S. that will create more than 500 jobs. The battery is based on the research of CMU professor Jay Whitacre.
 
RedZone Robotics received a $25 million investment from ABS Capital Partners to expand its product line and geographic reach. In addition, the company announced the acquisition of Cleanflow Systems, a major provider of wastewater inspection technologies in New Zealand.

RedZone develops and manufactures wastewater inspection technologies and analytical solutions for municipalities, contractors and engineering companies.
 
Pittsburgh-based ChemImage was one of six companies selected to receive up to $1 million in funding from the Ohio Third Frontier Advanced Materials Program to build a manufacturing facility for its patented multi-conjugate filter (MCF) technology, filters that are based on liquid crystal technology and used in a variety of industries. 

Cohera Medical has announced that it has received approval for the sale of TissuGlu Surgical Adhesive in Europe. The internal surgical adhesive is used for large flap surgeries, such as abdominoplasties, and will improve recovery by allowing for natural healing.
 
Carbon Capture Scientific of Upper Saint Clair has received a $2.99 million grant from the Dept. of Energy to develop and advance carbon capture technology. The company is hiring chemical engineers, especially those with a background in chemical absorption.
 
Pittsburgh-based Ortho-Tag has raised $1.6 million from angel investors for its electronically-tagged surgical implants. The funding will help cover the cost of the FDA process. The startup employs three people, having recently hired a design engineer. 

Source: Acquion Energy, RedZone Robotics, ChemImage, Carbon Capture Scientific, Ortho-Tag
Writer: Deb Smit

For more of Pittsburgh's latest and greatest, sign up here to receive Pop City in your inbox for free every week.

 
 

Gaming and tech entrepreneurs sought for September "Pitch Bootcamp"

Coming up with an idea for a cool new tech company is one thing. Getting investors to believe in your idea enough to give you money toward it is another thing entirely.

Ed Harrell, entrepreneur in residence at Harrisburg University of Science and Technology, says investors want to contribute to ventures backed by people with a clear vision for their business ideas, people who exude confidence. So in September the university is bringing in experts from the Founder Institute, a network of mentors who help the entrepreneurs behind promising emerging tech companies.

During the Sept. 10 event, eight technology-venture founders will be invited to share their ideas and get feedback on their pitches to investors
at a "Pitch Bootcamp." Since one of the school's goals is to develop a regional gaming cluster, event organizers are making a special effort to invite people with ideas focused on virtual gaming. "We want to get big in this business, and we want to figure out how to do this best," Harrell says.

Students from high school and college will be invited along with older adults, Provost Eric Darr says. "We want to make sure there's a nice mix of ages and experience," he says.

The event will also provide networking opportunities, and registration is expected to fill up fast, so check it out here to reserve your spot.

Sources: Eric Darr and Ed Harrell, Harrisburg University
Writer: Rebecca VanderMeulen

Philly's CityRyde hiring developers after winning funding, validation for carbon reduction method

CityRyde, the Philadelphia-based startup that makes software to turn bike rides into cash, has become the first company to receive validation for its carbon methodology. "It's software that tracks every bike ride," explains Tim Ericson, CityRyde CEO and co-founder. All those accrued miles can then be sold as carbon credits as part of a worldwide effort to reduce greenhouse gas emissions, adds co-founder and COO Jason Meinzer.

The company also announced that it will be receiving a total of $345,000, half from Virginia-based New Dominion Angels, and half in matching funds from Ben Franklin Technology Partners of Southeastern PA.

CityRyde started as a Philly bicycle sharing concept. While there are no communal bikes on the streets here just yet, in a few years, CityRyde has instead positioned itself as a global software solution provider at the juncture of transportation and energy.

The startup's proprietary Inspire software enables bike sharing programs worldwide to create a new revenue stream. Ericson explains that Inspire "pinpoints the exact amount of carbon emissions saved, so it can be aggregated and sold within the carbon space."

Eight people now work at CityRyde, which is based at Drexel's Baiada Center. "We're hiring. It's part of Ben Franklin's requirement for funding,' says Ericson. "We anticipate having pretty extensive hiring spree in the next year." Developer positions will be advertised first, according to Ericson.

The idea for CityRyde came from a visit to Paris, where Ericson and Meinzer saw Velib' docks everywhere they turned. "Bike sharing has completely transformed the way the city moves, and reduced traffic by 8 percent within a year of implementation in Paris," says Meinzer, who terms biking the fastest growing form of transportation worldwide, with a predicted apex in 2017.

Source: Tim Ericson, Jason Meinzer, CityRyde
Writer: Sue Spolan

For more of Greater Philadelphia's latest and greatest, sign up here to receive Flying Kite in your inbox for free every week.

Pittsburgh rental search site Rent Jungle gets noticed by Webby Award judges

Most websites that receive Webby Awards – sort of like the Oscars of the Internet – have been around for at least a few years. Just to be recognized by Webby judges, even if they don't choose a site as the top entry in its category, is quite an achievement.

So when Pittsburgh-based startup Rent Jungle was chosen as a Webby Official Honoree – a designation given to fewer then 10 percent out of 10,000 entries – it was a reason for the rental-housing search engine to celebrate.

Rent Jungle, which began in 2009 and now has eight employees, aggregates online listings of houses and apartments for rent and maps them so people looking for a place to live can see exactly where they're located. "We generally have twice as many listings as anybody else," Rent Jungle spokesman Josef Bookert says. The site's latest hires were brought in to improve the spider that crawls the Web for rental listings in the United States and Canada.

Recently Rent Jungle has added some additional features, like write-ups on specific neighborhoods and a section with articles on moving, budgeting and handling roommates. "We're really trying to make it the one-stop shop for moving," Bookert says. It also just launched a sister website where renters can see how good of a deal they're getting for where they live.

In April Rent Jungle announced that it received $300,000 in funding from angel investors. That money will go toward adding listings in more cities and releasing a mobile application, expected to be available in about three weeks.

Source: Josef Bookert, Rent Jungle
Writer: Rebecca VanderMeulen

CMU Flip Video entrepreneur creates early-stage fund

Flip Video entrepreneur Jonathan Kaplan and his wife, Marci, have created a new early-stage venture fund to assist Carnegie Mellon alumni in the development of future technologies.

The Open Field Entrepreneurs Fund (OFEF), made possible through an undisclosed amount gifted to CMU by the Kaplans, will help finance new businesses started by CMU alumni who have graduated within the last five years. Jonathan Kaplan, who graduated from CMU in 1980 with a degree in business administration, believes the amount will reach $25 million within five years.

"Our goal with this effort is to provide Carnegie Mellon graduates with the opportunity to realize their innovative spirit and start new businesses," said Kaplan, former CEO of Pure Digital and five-time entrepreneur in a prepared statement. "We'd like to make Carnegie Mellon the destination of choice for young entrepreneurs."

Pure Digital's handheld Flip video camera revolutionized the consumer electronics industry when it was released in 2006, one of the first purely digital point and shoot cameras (until mobile phones took over). Fellow CMU serial entrepreneur and classmate Peter Stern, founder of Datek Online, will provide financial and advisory support for the fund.

"We're thrilled to see this fund come to the region," says Catherine Mott, of BlueTree Allied Angels, one of the largest and most active angel groups in the region.  "We believe there is a great deal of intellectual capital at CMU that could be commercialized and we would be thrilled to "co-invest" with the fund and/or follow-on fund opportunities that fit our investment criteria.  We see this as a welcome addition to the region."

Interested applicants need to present a business plan for review, outlining how they will use the funding and join the OFEF incubation environment. The OFEF will provide $50,000 in matching funds to recipients. The fund will not be a competition, Kaplan said.

The university's faculty and students have helped to create 200 companies and 9,000 jobs in the last 15 years. CMU spin-offs represent 34 percent of the total companies created in Pennsylvania based on university technologies in the past five years.

Source: Carnegie Mellon University
Writer: Deb Smit

For more of Pittsburgh's latest and greatest, sign up here to receive Pop City in your inbox for free every week.

Business leaders name area's top tech companies at PACT Enterprise Awards

It was like swimming in a sea of money. On May 4, The Greater Philadelphia Alliance for Capital and Technologies hosted the 18th Annual Enterprise Awards. About a thousand business leaders and executives attended. Beginning with a VIP reception, the kudos flowed as easily as the cocktails, while down the hall a larger food and drink fest filled with tuxedo and evening gown clad representatives from Philadelphia's top law and finance firms, who networked with the area's best and brightest entrepreneurs and incubators.

Out of 27 nominees, these are the results: the Life Sciences Startup Company award went to CareKinesis, Philly's top Technology Startup Company of 2011 is Monetate, an eCommerce leader that runs websites for Urban Outfitters and QVC; the area's Emerging Life Sciences Company was NuPathe, which works on branded therapeutics for diseases of the central nervous system; SevOne was named Emerging Technology Company, following a 2009 PACT award for Tech Startup, and this year's award for a MedTech Pioneering Company was sewn up by medical device provider Teleflex.

The award for MedTech Product Innovation went to Siemens Healthcare. The venerated Morgan Lewis attorney Stephen M. Goodman received the Legend Award for his many years assisting entrepreneurs; the IT Innovator Award of Excellence went to Lockheed Martin, Information Systems & Global Solutions – Defense, based in Maryland but with offices in King of Prussia. The Investment Deal of the Year went to Safeguard Scientifics for the acquisition of Clarient Inc., formerly in Safeguard's portfolio, purchased by GE Healthcare for $144 million. "It was a spectacular dinner," says attorney Michael Heller, one of the evening's presenters and Chair of Business Law at Cozen O'Connor. "It was wonderful to see such a terrific turnout among the venture capital community. The region is more active today than it was a year ago, and there's more excitement in the air regarding the VC community."

PACT judges named James Walker of Octagon Research Solutions Technology CEO of the Year; Life Sciences Company of the Year was Health Advocate, and ICG Commerce beat out HTH Worldwide and Qlik Tech to win Technology Company of the Year.

Prior to the event, three CleanTech Companies to Watch were named: ElectroPetroleum, NovaThermal Energy, and Viridity Energy. Video of the entire event is available here.

Source: Michael Heller, Cozen O'Connor; PACT Enterprise Awards

Writer: Sue Spolan

Photo: Stephen M. Goodman

Fore more of Greater Philadelphia's latest and greatest, sign up here to receive Flying Kite in your inbox for free every week.

Pittsburgh sends its Startup America wishlist to the White House

Startup America heard from 200 Pittsburgh business leaders and entrepreneurs who sent a clear message to Washington that changes were needed in federal policies and funding practices to encourage a flourishing atmosphere for innovation, financing and international commerce.

The Reducing Barriers Roundtable, held on April 28 at Chatham University, was one of eight roundtable sessions being held across the U.S. this year in response to President Barack Obama's mandate to find ways that the federal government can best encourage business growth and job creation among small and mid-sized businesses.

This is perhaps the first time a standing president has sought real feedback on the effectiveness of the federal government through an open, democratic dialogue with the country, noted many in attendance.

"Pittsburgh looks more like America's heartbeat than either Boston or Silicon Valley," said Rich Lunak, president and CEO of Innovation Works. Pittsburgh is on track to nuture the next Google or Microsoft, but only if federal policies work in favor of entrepreneurs.

Local leaders spelled out key points during panel sessions and breakout roundtables, which focused on the energy, manufacturing, life sciences, and technology sectors.

On the wishlist to the White House:

- Improve access to funding by better facilitating translational research funding to help commercialize federally-funded research, reauthorize the SBIR program and use existing Small Business Assoc. to commit $2 billion of SBIC matching contributions to catalyze new early-stage investment.

- Improve the patent system ensuring a steady stream of innovative products. The U.S. Patent Office is committed to hiring 1500 examiners this year to facilitate the patent process, said Teresa Rae, deputy director of the U.S. Patent and Trademark Office.

- Establish a federal immigration policy that facilitates significant international talent attraction, integration and retention and is more progressive on visas.

- Create a tax credit for Angel Investors.

Senior administration officials did not attend the program as planned because their early morning flight was grounded by high winds; instead, Startup America staffers took copious notes. All suggestions will be reviewed by the adminstration, presented to the President and published on the Startup America Portal to promote further dialogue.

Source: Startup America
Writer: Deb Smit

Image copyright Deb Smit

Lehigh Valley startup aiming to revolutionize sound systems

In a typical hotel with four meeting rooms, the sound is controlled in a single room and requires more than two miles of cable. And if a speaker is too close to the microphone, a member of the hotel staff has to run into that room to turn off the speaker and stop the annoying screech that results from audio feedback.

In July, however, Pivitec plans to release technology reducing the amount of cables needed to make sound systems work (less than a half-mile in our aforementioned hotel). The Lehigh Valley startup's innovations would also make audio setups less expensive and easier to maintain. If a speaker needs to be turned off, for instance, Pivitec co-founder Dan Garrett says that will be possible using a smart phone rather than going to the central control room.

"It's a much simpler, cleaner solution," Garrett says.

From its base in Coplay, Pivitec is entering a promising industry, expected to be worth $91 billion worldwide by next year. Investors are taking notice, including $70,000 in funding from Ben Franklin Technology Partners of Northeastern Pennsylvania.

Garrett says Pivitec plans to first introduce its new products to contemporary Christian churches, a market he and co-founder Tom Knesel are familiar with through their last employer, audio technology firm Aviom. Many contemporary Christian congregations rely on elaborate stage setups for their worship services, especially around Christmas and Easter.

From this market Pivitec expects to branch into others, like Broadway shows and hotel meeting rooms.

Source: Dan Garrett, Pivitec
Writer: Rebecca VanderMeulen


Pittsburgh firms raise more than $25M in 2011 Q1

Pittsburgh companies raised more than $25 million during the first quarter of 2011, a strong showing that was spread fairly evenly among technology and life science companies.

Figures were improved compared to fourth quarter 2010 when 12 Pittsburgh companies received $8.71 million. Last year the region pulled in $7.08 million in the first quarter compared to $38.12 million in 2007.

Nationally, venture capitalists invested $5.9 billion in 736 deals in the first quarter of 2011, according to the MoneyTree Report from PricewaterhouseCoopers and the National Venture Capital Association (NVCA). Deals increased 5 percent in terms of dollars, but dropped 11% in number of deals compared to fourth quarter of 2010.

The following list of first quarter investments was reported by NVCA as well as several local companies.

Snap Retail in Churchill was the top recipient, having raised $8.01 million. The firm provides digital marketing and content aggregation for independent retailers.

Certes Networks in Coraopolis raised $6.82 million. Certes designs, develops and manufactures scalable security solutions for security companies, financial institutions, health care and government agencies.

Carmell Therapeutics closed on a $3 million Series A round on April 15. The life sciences firm manufactures novel blood plasma-based biomaterials that accelerate the repair of injured tissues.  The round was led by Harbor Light Capital Partners; Innovation Works and Blue Tree Allied Angels also contributed.

Cognition Therapeutics, developing promising therapy for Alzheimer's Disease, raised $2.5 million. Other companies reporting first quarter fundraising included: Thar Pharmaceuticals, 2.29 million; ShowClix, $1.65 million; Medallion Analytics Software Company, $830,000; Blue Belt Technologies, $170,000; Thermal Therapeutics, $80,000; and Rent Jungle -- $300,000 (from angel investors).

Rent Jungle also was one of several companies to receive a Webby at the 15th Annual Webby Awards.

In other money news, Panopto Inc. completed a $3.8 million equity offering this year. A CMU spinout, Panopto provides integrated audio, screen and video capture software for several markets, including the corporation, education and health care markets.

Source: NVCA
Writer: Deb Smit

For more of Pittsburgh's latest and greatest, sign up here to receive Pop city in your inbox for free every week.

Philly solar conversion company among highlights of Cleantech Investment Forum

Clean technology is a big draw for potential investors. Several hundred people gathered at the Academy of Natural Sciences on March 31 for the 3rd Annual Mid-Atlantic Cleantech Investment Forum. Sponsored by Blank Rome Counselors at Law, the Academy and Cleantech Alliance Mid-Atlantic, investor panels discussing the future of renewable energy, clean water, recycling and waste disposal were followed by presentations from area entrepreneurs.

On hand were members of the Greater Philadelphia Innovation Cluster for Energy Efficient Buildings. Williams J. Agate leads the Philadelphia Industrial Development Corporation, developing and managing the Philadelphia Navy Yard, which is now in the process of creating a smart grid energy master plan.

The Fostering Cleantech Investment Panel included Kevin Brophy, of Meidlinger Partners, who talked about the future of clean water investment, and said that while innovation in the field came from the middle cap, the greatest opportunity for future investments is in the huge lower cap market. Also on the panel were Gary Golding, from Edison Ventures, who addressed rapidly improving awareness of water issues, Arun Kapoor of SJF Ventures, who mentioned 100 percent Pennsylvania wind provider Community Energy, and Josh Wolfe, the founding partner of Lux Capital. Wolfe described Lux as an early stage high risk venture fund valued at $100 million, and had a different take on the market than his fellow panelists, explaining that Lux focuses on companies that are long on human ingenuity and short on government rationality. Passing on biofuel, nuclear and natural gas investments, Lux is instead investing in nuclear waste management, calling it the energy industry's biggest unsolved problem.

The only presenting entrepreneur based in the immediate Philadelphia area is solar power conversion company Alencon Systems, Inc. Now in the research and development stage, Alencon addresses the problem of energy efficiency with large scale photovoltaic systems, which are currently created by aggregating multiple small systems. Alencon, which was borne of research at Rowan University, aims to simplify solar and wind power systems from distributed harvesting to centralized conversion. With a prototype already built and tested, Alencon slates projected sales of its streamlined systems at $45 million by 2014.

Source: 3rd Annual Mid-Atlantic Cleantech Investment Forum
Writer: Sue Spolan

For more of Greater Philadelphia's latest and greatest, sign up here to receive Flying Kite for free in your inbox every week.

Civic Science raises $1.2 million and plans to expand, hire four

CivicScience, makers of digital tools and widgets that collect and analyze consumer opinion and behavior, has raised $1.2 million to expand the company and roll out a new audience measurement platform.

Investing in the round was global marketing research firm, The NPD Group, national polling company ALR and Kevin McClatchy, director of The McClatchy Company and former owner of the Pittsburgh Pirates. Civic Science previously raised $1.6 million, bringing the total investment to $2.8 million.  
 
The company was founded in 2008 by John Dick, CEO, with data technology developed by Carnegie Mellon University. The early polling widgets were published on Pop City and Pittsburgh Today as well as local newspapers.

The funding will accelerate marketing and product development around the IntelligentQuestion, or iQpoll, an unique polling platform that plugs into websites, social networks and mobile platforms, says Dick. CivicScience will add four to its staff of eight, salespeople and software engineers.

The platformed is offered to publishers free of charge. The information is then gathered by the firm, analyzed and the data sold to marketing researchers, advertisers, anyone with a need to understand the public's inclination or opinions in a given area.

"Ultimately this funding will help us to rapidly expand the number of websites that are using our technology and increase the amount of data we are collecting and analyzing," says Dick.

Source: John Dick, Civic Science
Writer: Deb Smit

For more of Pittsburgh's latest and greatest, sign up here to receive Pop City for free in your inbox every week.


Scranton mobile app entrepreneurs nab $50K investment

The first mobile phone app Adam Ceresko and Andrew Herman made tracked public buses in State College. But their business has since shifted in both focus and location.

In October the duo's company, Appek, moved to Scranton. And rather than concentrating on their own ideas for apps, they're courting businesses that want apps developed for them. That switch came after investor Kristopher Jones of KBJ Capital in Wilkes-Barre told them that no company was focusing on the business-to-business app market.

Fresh off Appek's announcement that it received a $50,000 investment from KBJ, it's lining up business clients. For now the company is focusing on existing products that would benefit from an accompanying mobile application, well-funded startups and companies that want apps for their own purposes, not for the public. Apps for mobile tablets like the iPad are also part of Appek's push.

"We're trying to create a company that has local impact and global reach," says Ceresko, who hails from the Scranton area. Over the next several months Appek plans to hire a "significant" number of full-time employees and summer interns, but specific figures haven't been worked out. An office in Wilkes-Barre might also lie in the company's future.

Eventually Appek hopes to build a platform that would allow smaller businesses – think corner pizza shops – to log onto Appek's website and build their own mobile applications.

Source: Adam Ceresko, Appek
Writer: Rebecca VanderMeulen

Snap!Retail nabs $6 million in venture capital

Pittsburgh-based Snap!Retail has raised $6 million in venture capital funding to further the development of products that give independent retailers a competitive edge against larger retailers online. The funding round was led by Sewickley-based Adams Capital Management.

A year old, Snap!Retail is boldly positioning itself to be the go-to company for national website retail, with easy-to-use, personable social media and electronic marketing tools. The investment will fund the development and launch of products including the flagship content management and marketing platform, TrafficBuilder, which offers a library of pre-created templates and images for vendors.

Another "secret, really cool" product is scheduled for release later this year, says Ted Teele, CEO.

"Retailers are working very hard to find their place in the world. Our mission is to help them do that by developing technology.  No one wants to be a friend of Walmart, but everyone wants to support the local store."

Snap!Retail (the 50-plus employees call themselves "snappers") has more than 300 customers; the the online marketplace has 40,000 registered users and sold 700,000 wholesale products last year.

"We want to build a great digital marketing company in Pittsburgh," says Teele, the firm's fearless leader. "We want to be a fun company. We'll know we're a success when people start leaving great companies like Google to work for us."

Source: Ted Teele, Snap!Retail
Writer: Deb Smit

For more of Pittsburgh's latest and greatest, sign up here to receive Pop City in your inbox for free every week.

Ben Franklin funds $2M to seven Southeast PA firms on heels of Early Stage Venture Showcase

The visionary folks at Ben Franklin Technology Partners of Southeastern PA have been as busy as the companies they support.

The highly successful economic development program announced on Monday a total of $1,975,000 to seven early stage companies with promising technology innovations. The companies included Ambler's Bioconnect Systems Inc. ($500,000), Glen Mills' Holganix LLC ($250,000), Devon's LiftDNA Inc. ($250,000), West Chester's LoSo Inc. ($125,000), Bala Cynwyd's Orion Security LSP, LLC ($200,000), Malvern's Quanta Technologies, Inc. ($250,000), and Malvern's Valence Process Equipment ($400,000).

Last Thursday, 21 other companies strutted their stuff in front of potential money as Ben Franklin partnered with Greater Philadelphia Venture Investors and the University City Science Center to host its annual Early Stage Venture Showcase at the Navy Yard. The event was open only to investors; angels, venture capitalists, and individual investors packed the room. Upstairs, the highly popular IT/Physical Science/Clean Technology track companies presented; downstairs, Life Sciences entrepreneurs told their stories to a much smaller crowd.

Ryan Caplan, of ColdLight Solutions, opened with a strong presentation highlighting his company's impressive proprietary Neuron platform, which offers automated data analysis derived from artificial intelligence, leading to highly targeted recommendations for retail, pharmaceutical and communications applications. Another standout was the aforementioned Holganix, an organic fertilizer company which is already servicing some massive lawns in its first year of business, including Longwood Gardens. The Holganix process unlocks already existing nitrogen from the soil and air through biological means and dramatically reduces the need for pesticides.

Downstairs a smaller but tougher crowd checked out Science Center tenants BeneLein Technologies, which uses a bioprocess to create generic antibiotics, and Vascular Magnetics, which hopes to develop a magnetic nanotechnology treatment for peripheral artery disease.

Doug Leinen, founder of BeneLein, says that he has not received direct feedback from investors. Richard Genzer, who attended the Venture Showcase on behalf of the Mid-Atlantic Angel Group, reports that he has taken further action with three companies.

Source: Doug Leinen, BeneLein, Richard Genzer, Mid-Altantic Angel Group
Writer: Sue Spolan

For more of Greater Philadelphia's latest and greatest, sign up here to receive Flying Kite in your inbox for free every week.

Meet the 'higros': Businesses that generate nearly every new job in PA

Would you be surprised to learn that less than 1 percent of all businesses in Pennsylvania created almost every new job throughout the commonwealth?

That's exactly the impact that about 2,300 high-growth companies had on the state, according to research by economic development consultant Dr. Gary Kunkle. His examination of Pennsylvania's economy found that these businesses -- affectionately referred to as "higros" -- generated almost 60,000 new jobs between 2006 and 2009. Out of 757,000 businesses in Pennsylvania, 0.3 percent were considered higros. In about a month, there will be a new list of higros.

"These firms are in every single industry within the state," says Kunkle, president of North Carolina consulting company Outlier LLC. "They're almost randomly geographically distributed."

Focusing on nurturing these businesses and helping them expand represents a new approach to economic development, His research shows that 97 percent of new jobs come from businesses expanding, rather than companies opening or relocating. The most successful businesses hire new workers gradually as they grow.

"It's better to hire 10 people 10 times than to hire 100 people once," Kunkle says.

The Allegheny Conference on Community Development plans to put this research to work to predict which businesses in a 10-county region of southwestern Pennsylvania are most likely to succeed, and how to best ensure their success. Details are still being worked out.

Also, the Team Pennsylvania Foundation is talking with the state Department of Community and Economic Development about how to use Kunkle's findings.

Sources: Dr. Gary Kunkle, Outlier LLC; Matt Zieger, Team Pennsylvania Foundation
Writer: Rebecca VanderMeulen


From FlyCast to appMobi: $6M investment brings Lancaster firm closer to smartphone app developers

A year ago FlyCast, the maker of an app that allows people to listen to the radio for free on smart phones, had figured out how to make their app work on Android and BlackBerry devices along with iPhones. And they realized a lot of developers would find this ability useful.

This epiphany led to FlyCast's rebranding as appMobi, which makes its technology available to the public. Thanks to the Lancaster firm, developers can write their apps once and have it converted for use on Apple and Android devices. The company plans to roll out BlackBerry and Windows phones soon, appMobi spokesman Roy Smith says.

A group of angel investors, who don't want to be identified, is contributing $6 million to fund appMobi's expansion. The company employs about a dozen engineers now and is hoping to hire about five more so the staff can keep up with new mobile platforms and improved versions of mobile platforms that already exist. Other improvements are in the works, including technology that would make it easier for shoppers to make purchases using their smart phones.

"We're just scratching the surface of what can be done with apps," Smith says.

Additionally, appMobi is increasing its efforts in online marketing, including its presence on Facebook and YouTube.

Source: Roy Smith, appMobi
Writer: Rebecca VanderMeulen

Pittsburgh's water world could be future industry cluster

The region is taking the next step toward the creation of a thriving industry around our abundant water supply, a Water Innovation Consortium that will inspire innovation, sustainability and collaboration among the more than 3,000 water-related firms here.

The first economic analysis of the local water industry sector, Pittsburgh's H2Opportunity Report, was released this month, providing a snapshot of water-related industries and the potential for growth. The study follows on the heels of Pittsburgh World Environment Day and the two Water Matters! conferences held in 2010.

In a nutshell, the region has the clout to generate a cluster of water-related industries, from energy to wastewater and desalinization technologies and products. More than 3,000 companies provide water-related components, products and services that provide 34,000 jobs and more than $5 billion in direct economic activity.

By putting together a "cluster model" similar to the Milwaukee Water Council, the group will organize and advance regional opportunities and coordinate existing resources aligned with those opportunities; think PLSG and the Pa. Nanomaterials Commercialization Center  which drive life sciences and nanotechnology growth in the region.

The study also identifies four pilot projects to drive the region forward:  supply and treatment, components, services and transportation. Two promising growth industries are identified as water treatment and water desalination with a mix of companies from Siemens Water Technologies and Calgon Carbon Corp. to newer firms such as Cardinal Resources and Epiphany Solar Water Systems.  

"This represents a different way of bringing partners to the table," says Jerry Paytas, vice president of research analytics, Fourth Economy, the author of the study. "It's an open cast-call approach to bring in the right players."

"We see our role as enabling the success of the teams that will focus on the areas they see as critical to the region's water future," says Jan VanBriesen, director of the Center for Water Quality in Urban Environmental Systems, which will coordinate the consortium.   "The consortium is really a 'bottom up' effort to bring together the region's extensive expertise and innovation in water issues."

The study was commissioned by the WED Partnership, foundations and companies working with the Allegheny Conference on Community Development and Sustainable Pittsburgh.

To learn more about how to get involved, contact Dave Nakles at CMU.

Source: Jerry Paytas, Fourth Economy; Jan Van Briesen, Carnegie Mellon; Sustainable Pittsburgh
Writer: Deb Smit

For more of Pittsburgh's latest and greatest, sign up here to receive Pop City in your inbox for free every week.

Pittsburgh Life Science Greenhouse reels in Johnson & Johnson, Merck and two VC firms

Two big pharma companies, Johnson & Johnson and Merck, and two venture capital firms will be moving into the expanded Pittsburgh Life Science Greenhouse campus, news that follows on the heels of the incubator's $5 million Accelerator Fund to boost the region's life science industry.   

PLSG announced the expansion of the campus, four to six wet labs in addition to 9,000 square feet of life sciences labs in December. Johnson & Johnson and Merck will be establishing their first presence in Pittsburgh.

In addition, Novitas and Corridor Venture Partners are moving in, reports Lynn Brusco of PLSG. The move marks a return to the region for Novitas, formerly PA Early Stage. It will be the first official office for Corridor Venture Partners, the life sciences fund founded by Gary Glausner and Pete DeComo in 2008.

"All of this company formation and capitalization activity, combined with the establishment of an efficient, cost-effective location for growing the region's life sciences industry at our new life sciences campus on the south side of Pittsburgh, is an instrumental underpinning for creating sustainability for the life sciences in our region," says John Manzetti, President and CEO of PLSG.

The $5 million Accelerator Fund will provide investment for a target group of PLSG companies that have moved beyond the early stage: medical devices, diagnostics, therapeutics, health care, information technology, biotechnology tools.  PLSG has been a successful catalyst for life science industry growth in the region, making Pittsburgh a U.S. top-10 ranked source of life sciences innovation with $600 million invested by NIH annually.

In other llife sciences news, Pittsburgh-based BlueTree Allied Angels saw the successful exit of MedSage Technologies, a portfolio company that developed a web-based platform to monitor patient compliance and track replacement equipment needs.  

The company was acquired by Philips/Respironics of the Netherlands. MedSage will be part of the sleep business of the Philips Home Healthcare Solutions Unit.

"BlueTree investors on this project are going to realize a double-digit return on their original investment," says Catherine Mott.  "They will also have the satisfaction of seeing a company move on to the next level, which is an added benefit of angel investing, particularly with this company because it will remain in the Pittsburgh region."

Source: John Manzetti, Lynn Brusco, PLSG; Catherine Mott, BlueTree Allied Angels
Writer: Debra Diamond Smit

Fore more of Pittsburgh's latest and greatest, click here to receive Pop City in your inbox for free every week.

Penn State faculty member and his brother develop secure e-mail system for sensitive documents

You can send business information instantaneously over e-mail, but it's not 100 percent secure. You can send hard copies of documents through the mail or a private courier service, but that's expensive and time-consuming.

What if you could e-mail sensitive documents without worrying about hackers or viruses?

With ePostal Services, you can.

James Gardner, a faculty member in a Penn State program that combines degrees in science and business administration, started the venture with his brother Jon, a fellow business veteran who lives in Stamford, Conn. Their system allows people to e-mail encrypted documents in a secure format. Senders can also be notified when documents are received and opened. When messages are sent, they land in a separate folder.

Sending an e-mail through ePostal Services is as easy as clicking a separate "send" button and checking a few boxes. Senders pay pennies for each service as they use it – comparable to buying a stamp at the post office.

"It really unlocks the commercial potential of e-mail," James Gardner says.

The company started making its service available in March to business customers who use Microsoft Outlook, using about $3 million of the brothers' own money and cash from angel investors. Now ePostal Services has 200 customers in fields such as finance, health care and religious missions.

The firm is seeking at least $2 million in venture capital funding to open up the service to a wider audience. It's also in talks with heavyweights like Microsoft and Google.

Source: James Gardner, ePostal Services

Writer: Rebecca VanderMeulen

Discovery Machine develops software to capture baby boomers' business knowledge

The first baby boomers will turn 65 once the calendar switches to 2011, signaling an upcoming wave of retirements nationwide. As the economy recovers from its downturn, thousands of baby boomers are expected to retire as they reach a certain age and feel that they have enough savings to stop working.

This creates a challenge for the companies that employ baby boomers: How to prevent decades of knowledge from walking out the door once valued employees leave for days spent with grandkids and golf clubs.

Discovery Machine
, based in Williamsport, has a solution. It figures out how veteran employees make business decisions and go about their jobs, and then maps these strategies into software that can be used to train other workers at the company.

"We feel knowledge is a commodity," says James McAssey, Discovery Machine's VP of business development. "We have a way to capture that expertise."

The firm has garnered several awards, including a product innovation award this spring from the Ben Franklin Technology Partners of Northeastern Pennsylvania. Ben Franklin has poured more than $300,000 into Discovery Machine and recently invested another $75,000. McAssey says that money will be put toward the company's efforts to reach out to more potential customers and increase sales.

Source: James McAssey, Discovery Machine
Writer: Rebecca VanderMeulen

Greater Reading KIZ challenges college students to create tech-oriented business ideas

Jennifer Leinbach, coordinator of the Greater Reading Keystone Innovation Zone, is tired of college students applying for jobs after graduation.

She'd rather see them create their own jobs.

As one step toward encouraging that, her organization is running a business idea contest for students from five colleges in Berks County. The only stipulations are that the businesses have to be for profit and must somehow focus on technology.

"You don't have to come up with a brand new product or service," Leinbach says. "They can take an existing product or service and make it better with technology."

While she hasn't heard much about students' business ideas, she says the idea of the competition seems to be generating excitement on Reading-area campuses.

The contest is being run through the Ewing Marion Kauffman Foundation, which focuses on entrepreneurship and education. Student teams have until March 25 to enter the Greater Reading competition, and up to three teams from each college will be chosen to give final presentations in April. The top prize is $1,000, although Leinbach says the real value is the experience of developing a business plan.

Plus, the Kauffman Foundation plans to promote several of the ideas on a website it will make available to interested investors. This is the first year for the Greater Reading business challenge, but Leinbach says she hopes to hold it in future years and offer the winners office space and access to business-assistance services.

Source: Jennifer Leinbach, Greater Reading Keystone Innovation Zone
Writer: Rebecca VanderMeulen

Ben Franklin Technology Development Authority receives national award

Hundreds of entrepreneurs and existing companies throughout Pennsylvania have received financial boosts from the Ben Franklin Technology Partners.

Last month the National Association of Seed and Venture Funds gave its Award for Excellence in Entrepreneurial Capital Formation to the Ben Franklin Technology Development Authority, which funds key initiatives like Ben Franklin Technology Partners, Keystone Innovation Zones and Venture Investment program. The association gave one private-sector award and one public-sector award. The winners were picked by the association's board, which chose them among nominations from its members.

Organizations chosen for the award were picked based on the track record of their investments, quality of their leadership and recognition among other agencies as a national role model.

Jeannine Marttila, the authority's executive director, says the award came as a surprise and has boosted morale among its board and staff.

"This is another confirmation that we're on the right track," Marttila says.

Sources: Jeannine Marttila, Ben Franklin Technology Development Authority; Kelly O'Day, National Association of Seed and Venture Funds
Writer: Rebecca VanderMeulen

rVibe receives $100,000 investment in Internet video technology, plans to hire sales staff

Each year companies spend millions of dollars sending employees to other cities for meetings and training sessions. But businesses like rVibe, based in Bethlehem, are allowing those companies to save money by providing high-quality video conferencing so employees can spend less time collecting frequent-flyer miles.

rVibe provides live, high-definition Internet video that enables real-time video conferencing on a large scale. The company primarily serves the pharmaceutical and medical device industries, in which standard practice is to send hundreds of employees to training sessions that last for several days.

"You can save a boatload on travel," says rVibe's CEO, Braydon Johnson-McCormick. "And what I really mean is a freighter."

rVibe has also developed the use of its video technology for use in television, more specifically enabling video to be transmitted to TV stations over the Internet instead of with huge satellite trucks. Johnson-McCormick says some broadcasters are testing rVibe's system now.

The firm was recently awarded an investment of $100,000 from the Ben Franklin Technology Partners of Northeastern Pennsylvania. That money will go toward rVibe's plans to sell and market its product. Johnson-McCormick says he plans to hire two additional sales representatives as soon as the money arrives.

Source: Braydon Johnson-McCormick, rVibe

Writer: Rebecca VanderMeulen

Ben Franklin event gives audience chance to vote on venture capital awards

Ever wanted a vote on whether an emerging company should get venture capital money? You’ll have your chance Nov. 16 during Ben Franklin Venture Idol.

The annual event, slated to take place at Lehigh University in Bethlehem, will feature three companies that Ben Franklin Technology Partners will pick from the clients it has worked with for a few months.

Each business will make short pitches to a panel of three investors who will provide constructive criticism, and the audience will vote on their favorites. The top winner will get a $5,000 investment, but it’s unclear how much the second- and third-place recipients will get.

Bob McHugh, manager of capital access at Ben Franklin’s Bethlehem office, says the event usually draws a mixture of college students, investors, lawyers with expertise in intellectual property, and fellow entrepreneurs.

"These companies can see what it's like to be under the gun," McHugh says.

Past winners include Third Eye Diagnostics, a Bethlehem company developing a non-invasive monitor to gather information about patients' eyes, and Apeliotus Vision Science, a Hershey firm working on a diagnostic tool to detect age-related macular degeneration.

The Venture Idol event will be preceded by an invitation-only speed-dating event in which companies can give five-minute presentations to potential investors.

Sources: Laura Eppler and Bob McHugh, Ben Franklin Technology Partners of Northeastern Pennsylvania
Writer: Rebecca VanderMeulen

White Haven sportsman develops a better fishing rod

Four years ago Scott Belisle thought of a way to make a lighter, sturdier fishing rod. When he lost his job as a land surveyor last January, he decided to pursue it. And now outdoorsmen across the country want to buy his products.

So far Belisle and his White Haven-based Lehigh Fishing Co. have developed five models of carbon-fiber fishing rods. Unlike other fishing rods made of the same material, he says the fibers are pulled tightly in a way that makes them extra sensitive. Belisle said he's received positive feedback from other fishermen who have tried them out. They're light enough for older fishermen to use all day without wearing their arms out, and they're sensitive enough to detect small fish at the end of a hook.

Belisle plans to develop more than 20 other types of fishing rods, including some for ice fishing and big-game fishing. He's committed to using only American suppliers for his products.

"These aren't going to be the kinds of fishing rods that you'll buy at Walmart or Kmart," he says. "These are going to be higher-end rods."

MetroAction, a northeastern Pennsylvania nonprofit, has given Lehigh Fishing an $18,000 loan. Belisle put $30,000 of his own money into the venture and expects to receive more financing for startup costs within a few weeks. Once the company gets going, he has about 40 orders to fill from as far away as Oregon and Washington state.

Belisle, an avid fisherman and bow hunter, also plans to use carbon fiber to make hunting arrows and shafts for hockey sticks and golf clubs. Eventually he hopes to launch a line of fishing apparel like waders, shirts and backpacks.

Source: Scott Belisle, Lehigh Fishing Co.
Writer: Rebecca VanderMeulen

Pedi-PRO organizes supplies for emergency responders

When paramedics arrive at the scene of a 9-1-1 call, seconds count. Emergency responders shouldn't worry about where they've stored the tools needed to save a child's life.

That's why Erie-based Code Kit PRO developed the Pedi-PRO, a kit that stores medical supplies, rolls into a package the size of a sleeping bag and unrolls into a hard surface for cardiopulmonary resuscitation. Emergency medical technicians can store their tools in the Pedi-PRO, put it in an ambulance and take it out when necessary.

Having those supplies in one spot is an improvement over the storage systems ambulances have now – mostly in tackle boxes and satchels, says Dr. Paul Malaspina of Code Kit PRO. "It's like trying to find something real important at the airport in your luggage," says Malaspina, a former paramedic who is now a trauma surgeon.

The Pedi-PRO is organized for optimum efficiency. For example, flashlights and endoscopes are stored near the patient's head since that's where they're most likely to be needed.

Malaspina won this year's InnovationErie: Design Competition, netting $10,000 and assistance in getting the Pedi-PRO to market.

The Pedi-PRO can support children who weigh up to 80 pounds, but Code Kit PRO plans to make an adult-sized version too.

Malaspina says it can also be used during disasters, like Hurricane Katrina or the Sept. 11, 2001, terrorist attacks. In that case, the kits can be stocked ahead of time with essentials like intravenous fluids, basic medications and iodine tablets.

"Park one of these at every airport and you're ready," he says.

Source: Dr. Paul Malaspina, Code Kit PRO
Writer: Rebecca VanderMeulen


Instant growth: InstaMed raises $6M in capital to expand medical payment technology

Anyone who has used eBay before understands the ease of PayPal. But for the medical industry, where costs come with a long list of variables--whether or not a patient has insurance or if there is a deductible--the simplicity of PayPal is even more desirable. Philadelphia-based InstaMed  allows doctors and health care centers the ability to turn any computing device into a payment terminal, able to calculate the copay and deductible for a complete check-out. The technology now operates in over 7,500 health centers, representing all 50 states. This week, InstaMed announced receipt of $6 million in new capital growth funding, bringing total investment to $22 million.

"We allow health systems to get rid of all the hard terminals you would typically see at a retail store or pizza shop where they swipe your card," says InstaMed CEO Bill Marvin. "What's unique about InstaMed is we are one integrated platform for handling everything that has to do with money in health care."

With the new funding, coming from existing investors including Bala Cynwyd's Osage Partners, InstaMed will continue to expand market share, launching new marketing campaigns, and aggressively expanding business development. But as a relatively young company, Marvin is keeping an eye on quality, looking to update technology systems. By keeping their message and technology strong, Marvin's team hopes to make InstaMed as common as Tylenol in American hospitals.

"As a business that was really just an idea six years ago, we implemented our first hospital only three years ago," says Marvin. "We have experienced tremendous growth in the last three years and we are at the point where the existing data centers and technology infrastructure that we built needs to be upgraded and taken to the next level."

Source: Bill Marvin, InstaMed
Writer: John Steele

For more of Greater Philadelphia's latest and greatest, sign up here to receive Flying Kite every week for free in your inbox.

Penn State students nurture State College entrepreneurs

Is State College the next Silicon Valley?

Yes, if David Adewumi and Jon Tornetta get their way. The Penn State students are in the midst of implementing their vision for Innoblue, which has the goal of helping people bring their cutting-edge ideas to fruition. They and their fellow students aim to assist budding entrepreneurs in the State College area and beyond, and plan to reach out to other students this school year. Their focus is on business ventures and civic-oriented projects, particularly those ideas that blend both.

"We truly believe that one person with a great idea, if they have the resources, can change the world," says Adewumi, a senior pursuing a self-designed major in global languages and social entrepreneurship.

One idea they’re working on so far is Tenant Review of Landlord, a website where Penn State students could search for apartments and rate landlords and rental units. They also plan to host speakers who will discuss entrepreneurship. Already they’ve gathered crowds to hear talks by trendsetters like David Weekly, a director of the Silicon Valley techie community center Hacker Dojo, who spoke by video chat.

Innoblue's plan is to help startups by providing help with marketing, legal consulting, connections to venture capital and everything in between. The group is also deciding on a State College site to serve as a lab where entrepreneurs and developers can work together -- not a business incubator, Adewumi stresses, but an inspiring working space reminiscent of Lancaster's Candy Factory or Independents Hall in Philadelphia. They've also launched a student-run firm to provide creative services.

Some of the fees from these projects go to Innoblue. Other ideas for generating income are charging for workshop attendance or use of the co-working space. They aim to be self-sustaining, and Tornetta, a junior studying chemistry and physical sciences with plans to earn an MBA, says Innoblue's goal is even bigger:

"When people think of startups, they'll think of Penn State."

Sources: David Adewumi and Jon Tornetta, Innoblue
Writer: Rebecca VanderMeulen

The Technology Collaborative of Pittsburgh announces $1.2M in new start-up funding

After the 2007 shooting tragedy at Virginia Tech, many colleges and universities sought to modernize their emergency broadcast systems to circumvent common problems like text alert limits that could delay messages. Metis Secure Solutions in Oakmont, Allegheny County, created a notification platform where users could to send detailed alerts to specific locations in less than 10 seconds. The technology instantly updated emergency alerts for Carnegie Mellon and Slippery Rock, partnering with these PA institutions for testing and research assistance.

Cyber security has become a successful niche market for Pennsylvania. With business and technology incubators all over the state, Pittsburgh's Technology Collaborative has sought to grow niche markets like cyber security, robotics and digital/analog electronics. Metis Secure Solutions is just one of many TTC success stories, and with $1.2 million in new start-up funding announced this month, this tech transfer team is on the hunt for the next big thing.

"The criteria for selection is innovative companies so it has to be something that is new and innovative," says TTC President and CEO David Ruppersberger. "There is a large emphasis on commercialization, so does the person or team have a believable story for how they are going to commercialize the technology they have developed, thus creating jobs."

Originally founded as the Pittsburgh Digital Greenhouse in 1999, The Technology Collaborative utilizes a member-driven atmosphere, so that business and start-up leaders are constantly contributing to collaborative research, education and training programs, networking opportunities, and employee recruiting services. Over the next six months, Ruppersberger and his team will not just be looking for a smart business plan, they will be looking for a partner to further the economy of one of the most dynamic sectors in Pennsylvania.

"We have done over 150 projects and, in the early days many of those were universities," says Ruppersberger. "These days, we still do some direct funding of university students to try and get research to that commercialization stage but this technology commercialization funding is our flagship program, looking to create long-term, sustainable companies."

Source: David Ruppersberger, The Technology Collaborative
Writer: John Steele



National, state and local officials bring $2.2M expansion to Innovation Center of Wilkes-Barre

The Innovation Center of Wilkes-Barre business incubator has already created more than 115 new jobs in the Wyoming Valley. That impact is poised to become a lot greater.

Congressman Paul Kanjorski , Senator Robert Casey, and Willie Taylor, Regional Director of the U.S. Economic Development Administration’s Philadelphia Office announced $2.2 million for the Wilkes-Barre Chamber of Business and Industry's Innovation Center at Wilkes-Barre II.

“We are very thankful to EDA and our federal delegation," says Chamber President/CEO Todd Vonderheid. "This new building will give our community the kind of space required to allow us to not only build on the success of our existing incubator, but most importantly to create a more formal relationship between area colleges, universities and private investors that will ensure the necessary support for entrepreneurs over the long term.”

Gathering in downtown Wilkes Barre on Tuesday were members of the EDA's regional office staff as well as Chamber members and area elected officials. Since 2008, Wilkes Barre, like many cities across the country, has been struggling with unemployment and job growth, further accenting the need for economic development and cross-governmental partnerships.

The new Wilkes-Barre small business incubator will create 17,110 square feet of affordable office space for lease to local small businesses and start-ups. The facility will be housed in a rehabbed abandon building in downtown Wilkes-Barre. Construction is anticipated to begin early next year and should take about a year to complete.

“The Innovation Center at Wilkes-Barre has provided a unique opportunity to bring new small businesses to the area, create jobs, and promote economic development in Northeastern Pennsylvania,” said Kanjorski in a statement before the crowd. “I applaud the Greater Wilkes-Barre Chamber of Business & Industry for its innovative initiative as part of the downtown revitalization program.  The expansion of the Wilkes-Barre Chamber’s successful program will enable the goals of the innovation center to continue so that more small businesses can grow and thrive in Northeastern Pennsylvania, while also benefiting the area’s economy and its residents.”

Source: Todd Vonderheid, Wilkes-Barre Chamber of Business and Industry
Writer: John Steele

Hershey Center for Applied Research a little sweeter with new programs for tech startups

For the last 116 years, Hershey has been a chocolate town. Started by Milton Hershey as an effort to create a community for his factory workers to raise their kids in, the town has blossomed into a bucolic destination. But with manufacturing woes hitting the whole country in the wake of recession, Hershey has started to look beyond its candyland roots to the future. And one technology center has introduced two new programs that may help turn the region's focus from sweets to suites and from chocolate chips to microchips.

After receiving a $1 million grant from the U.S.Economic Development Administration's public works program, the Hershey Center for Applied Research started the Tech Suites program to connect fledgling businesses with wet-dry lab facilities, networking tools and business services. The Tech Suites II program seeks to expand on the efforts of the first, drawing new, early-stage companies to the HCAR network. The research center has also made up to $2 million available for larger, more established companies looking to build a new headquarters or distribution facility in the region. With a dedicated investment partner--Maryland's  Wexford Equities--these incentive dollars make this chocolate town that much sweeter for potential and established business owners.

"Our building is a shell building that we build on to suit the needs of the businesses," says Director of Business Development Jack Atchason. "These programs are designed to reduce the cost of the companies acquiring space, to make it easier for them to come here."

Incentive programs are not the only thing making it easy to build and grow in Hershey. HCAR is the brainchild of several life sciences and technology investors. Breaking ground on its first facility in 2006, HCAR opened 1214 Research Boulevard in May of 2007, offering lab facilities, research space and networking opportunities for Hershey's burgeoning life sciences and biotechnology sector. These professionals provide a long list of business services to help companies get started. At just three years in, the center boasts an impressive tenant list as well, including up-and-coming health-food company Better Bowls and Penn State's departments of Pharmacology and Medical Technology.

"We offer these companies a whole network of business services which, depending on the need of the company, could vary from helping them to get their U.S. corporation set up, access to capital, marketing and PR, workforce development, relocation services," says  Atchason, "It really depends on what the company needs. We have access to most resources within the commonwealth."

Source: Jack Atchason, HCAR
Writer: John Steele

SilcoTek goes from spin-off to superhero with new funding

Television spin-offs are tricky things. Characters you loved in the context of your favorite show inhabiting a new life in a new time slot can be confusing and uncomfortable. Frasier was critically acclaimed but never achieved the same cultural relevance and adoration as Cheers. Happy Days were not so happy on Joanie Loves Chachi. Fortunately for the coating chemists at SilcoTek, this isn't TV, its business. And for this successful spin-off, business is booming.

SilcoTek's story begins when State College chromatography firm ResTek becomes employee owned on January 1st, 2009. Recognizing the divergent business models and professional goals of the new ResTek and the existing performance coatings division, employee Paul Silvis makes a power play to depart, bringing the coatings team with him. His wish is granted and, cue the theme music, the spin-off has begun. Since departing its parent 19 months ago, SilcoTek has thrived. In response to increased sales in Europe, the company opened a German subsidiary and, with the addition of a new, thicker, more water-resistant coating product, hopes to increase work on offshore oil rigs. Earlier this month, SilcoTek's accomplishments were recognized with $250,000 from Ben Franklin Technology Partners.

"As part of ResTek, we were one of many product lines but our application in the market was so different that our group naturally started to isolate a little bit," says SilcoTek Business Manager Gary Barone. "ResTek became 100 percent employee owned and, at the same time, it was ideal to say 'ok, lets take this line that is becoming its own little island and form a company."

Those new applications led SilcoTek away from analytical chemistry to target coatings for oil and coal production. Over the past year, the company has worked with customers and, with this latest round of funding, SilcoTek is launching a new product called Dursan. A more rugged, thicker, more water-resistant coating, Dursan holds up against salt water, which helps extend the lifetime of offshore oil rigs and other ocean equipment, and reduces ware for moving parts of machinery. With these new expansions and product offerings, this spin-off looks like it has a long way to go before the credits roll.

"This funding lets you know that our state wants to see technology developed to create jobs within the state," says Barone. "Being recognized now as an independent, not just as a spin-off, to drive our future, for all of us who came over and made the leap, adds a sense of pride that we are going to make it."

Source: Gary Barone, SilcoTek
Writer: John Steele

DreamIt Ventures celebrates 'Demo Day' with new seed funding announcement

When your fourth-grade class held a science fair, you spent months making a volcano erupt or exploring the mating habits of sharks. But once the fair was over, there were two options: the trophy shelf or the trash can. There was nowhere for those ideas to go once the fair was over, win or lose. But one idea-sharing event, where adult presenters will be showing off the business ideas they have been working on, can lead beyond the convention hall to a business, products for the state economy or jobs for its citizens. But first, they have to get through Demo Day.

Every year, Philadelphia venture firm DreamIt Ventures invests state money in business ideas they believe have potential. After receiving funding, the search is on for companies that fit the program and, once they are in, DreamIt works on refining and planning to create a viable business model. After three months of coaching, editing and mentoring, DreamIt unveils the projects with the most potential at an event they call Demo Day, which took place yesterday at Philadelphia's Independence Visitors Center. Now in its third season, DreamIt announced this week that they have received $125,000 to continue the program for a fourth year. With this funding, DreamIt Co-Founder Steve Welch believes the program has finally hit its stride, knowing what companies they want to work with.

"We have companies come in with an idea on a napkin and, if that's the case, hopefully they can get to the point where they have some customer interaction or customer traction," says Welch. "If they have customer traction, in three months we can accelerate that customer traction and help generate revenue. But we need to get to that step within three months."

This expedited process tends to rule out biomedical drugs and medical devices. In the past, the program offered seed money to 10 firms able to work in this faster business model. Traditionally, web-based businesses and IT firms have fared well but this year, the program has added four businesses with a learning component through a partnership with Startl.com, a nonprofit focused on driving innovation in digital learning. Yesterday's event allowed these 14 companies to join a roster with business leaders who have received $4 million from Google, appeared on national television and won seats on coveted technology and industry panels across the country. And with the new seed money in place, 10 new companies will begin their DreamIt journey this fall.

"We are really looking for companies that will be open to mentorship and will get real value out of the program," says Co-Founder Kerry Rupp. "A lot of the program is providing mentorship and help and if a team is stubborn and on a single-minded path, they really don't fit the program. That doesn't mean they won't be successful but we really want teams who will engage with us in the process."

Source: Kerry Rupp, Steve Welch, DreamIt Ventures
Writer: John Steele




New state investments boost 3 Bucks County manufacturers

Bucks County seed and garden manufacturers W. Atlee Burpee Company has been producing seed catalogs, grown plants and garden tools since 1881. But this week, they are not the only ones planting seeds in Bucks County.

The Pennsylvania Industrial Development Authority approved $2.9 million in state investments that will allow Burpee and two other Bucks County manufacturers to expand their operations and add jobs. These expansion efforts will leverage more than $7.2 million in private investment and will grow the manufacturing sector for this suburban region of Philadelphia. Burpee will be buying and renovating an existing building in Warminster. VMD Machine, a plumbing fixtures manufacturer will also be purchasing a new building. And Pendant Systems Manufacturing Company, a manufacturer of lighting suspension systems, will be moving operations to a new facility and adding five new jobs over the next three years. Since the state began making these investments over 25 years ago, this is the first time that all grants were given to a single region.

"We certainly aren't targeting Bucks County but that region uses PIDA a lot when they are looking for financing for projects," says PIDA program administrator Kevin Rowland. "They bring us a lot of projects but this is still very unusual."

PIDA officials believe that a state-wide reduction in manufacturing projects may be the reason for the regional aberration. Manufacturing jobs are down 3.3 percent and the volume of applications that PIDA receives has been declining since the recession. In this round, the Bucks County firms were the only applicants. But the 3.3 percent reduction in manufacturing jobs is an improvement over the previous year and with a new state budget in place, investments like these continue to expand jobs for the manufacturing sector.

"These companies are not moving far and in fact one is moving right down the road," says Rowland. "But instead of leasing their new facilities, they will be buying and that will allow for more expansion."

Source: Kevin Rowland, PIDA
Writer: John Steele




Ben Franklin Technology Partners CEO named to National Advisory Council

As president and CEO business incubator Ben Franklin Technology Partners of Southeastern Pennsylvania, RoseAnn Rosenthal has traveled all over Pennsylvania examining innovation and tech transfer operations and talking shop with state leaders. Her journeyman style has helped  BFTP Southeast regional office grow more than 1,600 companies from the basements and garages of invention to industry-leading commercialization.

After taking so many businesses from regional success to national acclaim, it is no wonder that Rosenthal has done the same for herself. This week, at an Innovation Forum at the University of Michigan, U.S. Commerce secretary Gary Locke took the podium to ask Rosenthal and a slew of innovation specialists from across the country to join the newly-formed National Advisory Council on Innovation and Entrepreneurship.

“America’s innovation engine is not as efficient or as effective as it needs to be, and we are not creating as many jobs as we should,” Locke said. “We must get better at connecting the great ideas to the great company builders. The National Advisory Council will help the administration develop a broader strategy to spur innovation and enable entrepreneurs to develop breakthrough technologies and dynamic companies, and to create jobs all across America.”


Formed by presidential order, the National Advisory Council on Innovation and Entrepreneurship will examine ways to create jobs and stimulate the economy through research and commercialization. After announcing the National Innovation Strategy last fall, which called for doubling the budgets of agencies including the National Science Foundation, the White House now looks to convene the advisory board to oversee the increased funding and get the most national impact from American innovation. The board will have a lot of resources to work with as the president’s 2011 budget--while freezing domestic discretionary spending overall--increases funding for civilian research and development by $3.7 billion.

While Rosenthal could not be reached for comment, she joins a cavalcade of intrepid entrepreneurs and tech transfer professionals including the co-founder of Yahoo! Jerry Yang, and VP for Research at MIT Claude Canizares. View the full list of advisers joining Rosenthal here.

Source: Gary Locke, U.S. Department of Commerce
Writer: John Steele

Nearly $20 million funding round puts vintage fashionistas ModCloth in expansion, hiring mode

Eric Koger is on a hot streak recently. In June, Ernst & Young named Koger--the co-founder and CEO of Pittsburgh's online vintage clothing retailer ModCloth--one of their Entrepreneurs of the Year. This week, the company announced that, as the latest Series B venture capital financing round closed, they would receive $19.8 million toward their planned expansion. And you thought you were having a great summer.

Koger and wife Susan started ModCloth out of a freshman dorm room at Carnegie Mellon University, selling thrift-store finds at bargain prices. After four years of college and a few years out in the real world, ModCloth has become one of Pennsylvania's most successful ebusinesses. And this round of financing, which included funding from StubHub co-founder Jeff Fluhr and Facebook financiers Accel Partners, proves that ModCloth has truly hit the big time.

"Our philosophy around the business has not changed," says Koger on his company's recent success. "We have always had opportunities in front of us, but now we have the resources to explore some of those opportunities."

One of those opportunities is creating a West Coast presence. Believing that ModCloth's seemingly endless collection of oh-so-cute print dresses would look great in the California sun, Koger visited there this week, checking out the operations at new ModCloth offices in San Francisco and Los Angeles. With two new leases on the books, Koger says his company's new financing will come in handy as business moves west.

"People are more expensive in California," says Koger. "The tax on payroll and cost of living are just so much higher. Check out our careers page though, we are hiring multiple roles in Pittsburgh as well. We have lots of opportunities these days."

Source: Eric Koger, Modcloth
Writer: John Steele

Berks Economic Partnership takes ‘Smart Market’ concept on the road

On June 8 and 9, Mike Simmons attended the Medical Design and Manufacturing trade show in New York City. But he wasn’t selling defibrillators or tongue depressors. Simmons was there, with his economic development cohorts, selling an idea. While these trade shows normally keep the ideas in the conference rooms and keep the device salesmen on the convention floor, this is an idea that could sell, which would give legs to a burgeoning industry, saving lives and jobs in the process.

As director of marketing and research for the Berks Economic Partnership, Simmons is part of a team showing up at trade shows and medical conferences in an attempt to draw medical device manufacturers to what they are calling the 'Smart Market.' The Smart Market is a 9-county region in south-central PA currently home to many top medical manufacturers. Their booth, sponsored by First Energy Corporation and Team Pennsylvania, has been traveling to different business sector events to express the benefits of this oft-overlooked region.

“There are a lot of similarities between the counties in the different industry clusters we are focused on,” says Simmons of the Smart Market. “A lot of food manufacturing, advanced manufacturing, business and financial services, health care; so those are the types of companies we market to.”

One of the big selling points that makes the Smart Market so appealing as a manufacturing hub is its location. Forty percent of the U.S. population and 60 percent of the Canadian population lie within a 500 mile radius of south-central PA, helping companies reduce shipping and fuel costs.

“Being close to Philadelphia, D.C., New York, it just makes sense,” says Simmons. “It’s a strategic location for any business and a very affordable location at that.”

In a word, smart.

Source: Mike Simmons, Berks Economic Partnership
Writer: John Steele

Chester County increases Higher Ed involvement, expands Keystone Innovation Zone

It is no secret that Pennsylvania’s high-tech sector is a huge point of pride for the Keystone State. In 2008 alone, Pennsylvania added 3,800 jobs in the high-tech sector while the rest of the country battled the early makings of a recession. And while 2009 is sure to show losses (data isn’t available but projections are not good, for PA or the rest of the nation), the state is fighting back, creating new companies and expanding technology transfer.

Nowhere is this effort more evident than in Chester County, where local high-tech companies have created or retained over 300 jobs since 2009 and created 30 new jobs just in the last 6 months. To keep the trend going, the high tech-minded Chester County Keystone Innovation Zone announced this week that it is expanding to include four new institutions--West Chester University, Cheyney University, the Franklin Commons education and enterprise facility in Phoenixville, and Tredyffrin’s Evolve IP Corporate Center--adding to the research and commercialization potential of this already successful program.

While adding research and educational institutions will help grow new companies, Chester County Economic Development Council project consultant Mary Fuchs believes the true success of Chester County lies in creating self-sustaining businesses with commercialization potential beyond the first year.

“A lot of other zones are clustered around a research institution, she says. “In Chester County, it’s the existing companies that have spun out new businesses close to them. These are all niche businesses, businesses that have defined their markets and are growing and moving forward.”

The expansion comes just in time, as grant funding has begun to decline. Now in its third year, CCKIZ is doing more with less, having its most profitable year to date--increasing revenue over $19 million from the previous year--with its least amount of funding. And that is something worth fighting for.

Source: Mary Fuchs, CCEDC
Writer: John Steele


With recent investment, Applied Computational Technologies expands production of ‘Chemo Calculator’

When most people ponder the scourge of cancer and the slow, sickening crawl its patients must endure, only some of the suffering can be attributed to the disease itself. The rest of the blame falls on chemotherapy, a treatment that exists for lack of better options, often causing side effects as painful and draining as the disease itself. But with each passing day, scientists and oncologists learn more about radiation therapy, finding better ways to plan and administer treatments.

Windber’s Applied Computational Technologies are helping radiologists create better treatment plans with their invention, ProACTive. This radiation software solution acts as a ‘chemo calculator,’ creating a mathematic rubric for chemotherapy dosing.

“Currently, we are in the final stages of prototype testing and completing this technology,” says CEO Kathy Blum. “ProACTive will mean a big improvement in the accuracy of radiation for cancer treatment, thus improving the quality of treatment and the likelihood of impact to normal tissue.”

Because current software solutions are slow to calculate correct dosages, treatment procedures are often reduced to a horserace between speed and accuracy. This push-pull affects critical timing and can lead to more painful side effects. In recent testing, ProACTive accurately calculated a treatment-planning dose more than 170 times faster than the current gold standard for accuracy in treatment planning.

After receiving a third round of funding from Ben Franklin Technology Partners in May, ACT plans to seek software licensing within the year to expand their treatment.

“We are very excited to continue bringing ProACTive to market because it will make a difference for those undergoing radiation treatment,” Blum says. “Support from BFTP over the years has been invaluable as we look to finish our clinical testing and add value to the cancer treatment process.”

Source: Kathy Blum, ACT
Writer: John Steele



NEPA Green insulation firm receives Ben Franklin funding

As the former coal manufacturing capital of the world, Pennsylvania has been struggling to bring coal production into the 21st century. But what about the viable coal waste products? Surely some enterprising entrepreneurs can create a home for the by-products and compounds coal leaves behind until a suitable solution has been found.

Cashing in on the most recent round of funding from the Northeastern Pennsylvania branch of Ben Franklin Technology Partners, Advanced-Tec Materials has created an insulation that is not only sustainable but also fire-resistant. Advanced-Tec believes the material, which is made from waste coal by-products and vegetable proteins, to have many applications. But currently, the company seeks to replace insulation for industrial doors, which have been found to be unsafe in the case of fire.

“The more of the coal production waste we put into the product, the more fire resistant it becomes,” says Advanced-Tec CEO Jack St. Pierre. “Because it’s green and fire-resistant and has even been tested to have an increased insulation value over current materials, its shown to be very attractive to our customers.”

Founded as a research and development company four years ago, Advanced-Tec is sitting on a few commercial innovations they hope to commercialize over the next year. With their material set for sale, the Ben Franklin funding will help Advanced-Tec open a facility in Hazleton. The facility will serve as the material’s production headquarters, creating jobs and bringing fire safety to the region’s industrial centers.
 
“Our products have now been developed completely and tested and demonstrated to customers,” says St. Pierre. “It’s time to start taking the whole company into the commercialization stage.”

Source: Jack St. Pierre, Advanced-Tec
Writer: John Steele

Radnor pharma start-up goes beyond mental floss for Alzheimer’s patients

Any dentist will tell you that flossing is a great way to reduce plaque. This white build-up, formed from left-over food deposits on the gums, is unavoidable and, without proper treatment, can cause tooth decay and gum disease. For many years, Alzheimer’s disease has been treated the same way: medications would act as ‘mental floss,’ clearing out plaque deposits in the brain that result from the disease’s increase in your body’s natural protein production. These deposits prevent synapses from firing as they should and result in decay. But a new pharmaceutical company now believes they can take treatment further, preventing these deposits from forming in the first place.

Radnor start-up QR Pharma this week announced receipt of $2.4 million in seed funding from local biotech investors BioAdvance and various Angel partners working with the Delaware County Keystone Innovation Zone. The round-closing investment will go to advance clinical developments already perfected in mice that would reduce the amount of brain protein produced in Alzheimer’s patients.

“On the market today, you have nothing that changes the course of the disease,” says QR Pharma CEO Maria Maccecchini. “What you have are stimulants that make people think a little better, a little quicker, a little longer. But after six months or a year, they will still go downhill as if they were taking no drugs.”

Mental "dentists" can try and brush away the problem but the fact is, despite spending $172 billion per year on treatment costs, Alzheimer’s deaths increased 46.1 percnet from 2000-2006, while all other major causes of death (stroke, heart disease, breast/prostate cancer) decreased. By slowing the overactive production of protein, QR Pharma hopes to correct this frightening trend at the source: the plaque.

Early clinical trials have targeted neurology patients with MCI (mild cognitive impairment), one of the earliest signs of Alzheimer’s. By catching the disease early, the trials will separate the at-risk patients from those who are just slightly senile. Early results are positive and Maccecchini is optimistic for the future of her team’s mental dentistry.

“Unless you take this plaque off by brushing and flossing and going to the dentist, you have such accumulation and the teeth fall out,” says Maccecchini. “We are starting a little earlier to prevent the process from forming. We don’t have any data from this study yet but it seems OK. Nobody has any side effects and no one’s teeth fell out. So far so good.”

Source: Maria Maccecchini, QR Pharma
Writer: John Steele

Viddler preps for expansion after receiving Ben Franklin funding

When Ben Franklin Technology Partners grants funding for small business development, it can be overwhelming. What will you spend the money on? What goals will you look to achieve? Where can you expect to see growth? But when Ben Franklin announced nearly $400,000 in funds for Northeast PA earlier this month, Bethlehem video hosting site Viddler.com had its expansion plan down to a science.

“This is our last round of funding,” said Viddler VP and Co-Founder Donna DeMarco. “So this is helping us to grow our team, expand the architecture for our system and invest in our employees.”

After three years working within the Northeast incubator and picking up high-profile customers like AOL and Sony Playstation, Viddler is ready to expand. And with $50,000 in new funding, the company can add additional servers to create a more secure online experience and will promote some part-time employees to full-time staffers.

Launched in 2006, Viddler created the first video platform with in-line texting, which allows commenters to time-stamp their comments and share specific points of interest with others. This feature has been proven to increase viewer involvement, provides another platform for video advertisement and has helped the company expand operations not only through entertainment and social media sites but also with educational entities like MIT and Cornell. With this new funding, Viddler will be hiring in several key positions to keep growing into new markets.

“We are in the final stages of upgrading our redundancy,” DeMarco says. “Now we are focused on hiring new people so we can keep expanding.”

Source: Donna DeMarco, Viddler
Writer: John Steele


Advanced Cooling Technologies shoots into Orbit for the second time

Last month, President Obama announced a new direction for the U.S. space program, allowing for corporate partnerships in space exploration projects. But as Lancaster-based Advanced Cooling Technologies recently learned, there is more than one way to get your company into space.

After being named one of Central Penn Business Journal’s 50 Fastest Growing Companies of 2009 in September, ACT announced a facility expansion, which would allow them to further manufacturing on their Constant Conductance Heat Pipes. Now, this new product is going to space for the second time as ACT cooling systems will be featured on-board the newest Orbital Sciences Corporation spacecraft.

“This clearly demonstrates our ability to routinely manufacture complex satellite thermal control products,” says John Hartenstine, manager of ACT Aerospace Products Group. “We are pleased with this recent launch which expands our flight heritage and are excited about additional launches in 2010.”

After its founding in 2003, ACT joined the Lancaster County Keystone Innovation Zone program. Having graduated from the program, the company has benefited from several funding rounds, which have allowed them to expand into new markets, including aerospace. According to reports from the OSC spacecraft, all systems are functioning normally, leaving ACT primed and ready for its next mission.
 
 "Our strong financial and technical performance has enabled us to expand into new products and markets," said Dr. Jon Zuo, President and Chief Technical Officer of ACT.

Source: John Hartenstine, Advanced Cooling Technologies
Writer: John Steele

Science Center fights “Valley of Death” with QED funding

As a doctor, Chris Laing knows a little Latin. As vice president of the University City Science Center, Laing has become intimately familiar with at least one Latin phrase: "Quod Erat Demonstrandum.” Loosely translated, it means “That Which Is Demonstrated,” and has become the motto for the QED Program, a technology transfer pathway for developing technologies, which recently announced $600,000 in new awards for 2010.

The QED Proof-of-Concept Program announced this week that three researchers from the Children's Hospital of Philadelphia, Penn Medicine and Rutgers University will each receive $100,000 from the Science Center, a $100,000 match from their supporting institution, and business advice for one year. This second round of funding will go toward improving heart disease treatment and gene therapy, and will combat the “Valley of Death effect.”

“The “Valley of Death” is a gap in funding and other resources that commonly occurs between basic-science grants--from government sources, for example--and venture financing,” says Laing. “The QED Program helps to bridge it in two ways: firstly by providing seed-stage funding ($200k) to directly support commercially-relevant research and development, and secondly by engaging follow-on funders in the process, thereby creating 'downstream' funding opportunities.”

The researchers were chosen from respondents to an October, 2009, request for proposals that returned 61 responses from 16 universities in three states. The Children's Hospital of Philadelphia’s Professor of Pediatrics & Pharmacology Dr. Robert J. Levy developed a technology that reduces the 100,000 surgeries performed each year in the U.S. to replace blocked stents. A group at Penn Medicine is developing a minimally invasive technique for replacing damaged heart valves. And Samuel I. Gunderson, Ph.D.'s team at Rutgers University is developing a brand-new method for silencing genes.

“With QED support, the potential of these commercially relevant technologies can be investigated quickly and efficiently in the lab,” said Laing. “Not only does this avoid the need to prematurely create new companies, but it also streamlines decisions about future investments in the technologies.”

Source: Dr. Chris Laing, University City Science Center
Writer: John Steele

Two recent funding recipients join Ben Franklin Technology Partners TechVentures program

It has been quite a month for Ben Franklin Technology Partners (BFTP) and their latest roster of funding recipients. A visit from Vice President Joe Biden was just the beginning as BFTP received a $6 million grant to further the efforts of TechVentures, a small business incubator helping new business owners succeed in Pennsylvania. Once the VP had stepped off the podium, it was time to introduce the newest Northeastern business roster, complete with $400,000 in grant funding. Now, two of those companies have been selected to the TechVentures program, giving them business assistance and a temporary home at the newly funded Lehigh University facility.

Electrikus and ElementID will be joining the 23 early-stage firms already at TechVentures. Electrikus has designed a line of smart battery back-up systems for homes and ElementID provides info automation software for businesses. With their facility growing by leaps and bounds, BFTP is excited to offer business services to more companies like Electrikus and Element ID, ones they believe will benefit from an incubator environment.

“Many of our companies are looking for a place to start, like two guys in a garage looking for a real office,” says Laura Eppler, Director of Marketing for Ben Franklin Technology Partners of Northeastern Pennsylvania. ”The benefits of being in a business incubator are many. There is a shared synergy amongst early-stage firms, referrals to folks in the Ben Franklin solutions network like lawyers and accountants, and everything works gradually as we edge these companies closer and closer to graduating from the incubator.”

Since 1983, the BFTP regional site and TechVentures have graduated 44 successful companies, grossing more than $675 million in annual revenue, and creating more than 4,000 jobs. This new facility will create as many as 200 sustainable, highly paid technology jobs and retain 100 more jobs at new, start-up companies in its first three years. It will also provide job and internship opportunities for up to 20 university students each year.

Source: Laura Eppler, Ben Franklin Northeast
Writer: John Steele

UPenn’s Center for Technology Transfer unveils UPSTART program

Some people never want to leave college. But its not just the guy in your building always asking you to play Hacky-Sack. Researchers, professors and all-around eggheads often find the college life stimulating and more conducive to productive thinking than going into business in the private sector. They still want to see their ideas get developed but they don’t want to leave the lab to do it. Now, the University of Pennsylvania’s Center for Technology Transfer is making it easier than ever for these campus campers to stay put.

This week, Penn introduced UPSTART, a tech transfer platform helping researchers get their products or concepts through a commercialization process without becoming full-on business owners. UPSTART director Michael Poisel targets faculty and staff with basic research on a topic or innovation and works to bifurcate that research so that new technologies can be created while the basic research continues. This dual path increases the potential for several products to come out of an individual research area.

“Our group mainly focuses on licensing Penn-based technologies to corporate entities for those corporations to develop the technologies,” says Poisel. “What this would allow us to do is develop the technologies here at Penn through a company formation process and maybe from these technologies, acquire funding and end up building a company that goes all the way.”

After only a few months in existence, UPSTART created a connection with Dr. David Wilson, whose innovation, Oxygenese, senses oxygen levels in tissue that cause a patient to go into shock. Working with Wilson and another entrepreneur, UPSTART is able to move forward on commercializing this product while Wilson continues work on other applications and further the overall knowledge of this technology.

“Dr. Wilson continues to work in his lab on new technologies that not only will be beneficial to this opportunity opportunities that he can further develop and commercialize later on,” says Poisel. “These professors want to see their innovations developed but its not something they want to leave the university and devote their lives to.”

With the success of Oxygenese, Poisel has created value for research that is not quite ready for licensing. Penn believes Poisel is an upstart himself, as they plan to continue unveiling new commercialization efforts and updates on his research partnerships as they become available.

Source: Michael Poisel, UPSTART Penn
Writer: John Steele

International Battery secures $35 million in venture capital funding for green battery production

Ever since Bethlehem Steel went quiet, every two-bit manufacturer with a hard hat has eyed the Lehigh Valley’s storied infrastructure and workforce, claiming to be the second coming. So when International Battery first opened its green Lithium Ion battery plant in Allentown in 2008, there was a lot of skepticism. Would they really deliver 250 jobs in three years, as they promised?

The manufacturer answered the skeptics this week, announcing $35 million in venture capital funding. The funding will go toward expanding manufacturing efforts in the Lehigh Valley to accommodate new customers, International Battery Chairman Mark Mills says.

“Our company CEO spent 2009 developing new customers and getting the core technology qualified and certified,” says Mills. “Think of this as expansion mode for customer outreach.”

That expansion mode, Mills says, will translate into jobs for the Lehigh Valley as International Battery looks to hire in every major department. After researching many applications for their Lithium Ion battery, International Battery will be looking to develop new relationships with military manufacturers and working with Smart Grid applications. This will mean hiring new sales, marketing, engineering and manufacturing specialists en masse over the next year.

After opening in 2008, International Battery began a process of manufacturing lithium Ion batteries that use water as a solvent, as opposed to a hazardous chemical. This lowers the need for expensive handling equipment, and is more environmentally sustainable than traditional battery manufacturers. International Battery’s new funding is an investment in this cleaner technology because they believe it to be a game changer in the way batteries are produced.

“This is a lot like the transformation of the paint industry and the ink industry,” says Mills. “As you may recall, paints and inks are made using powders and hazardous chemicals. All modern paints and inks are water-based now. We believe a lot of the world will migrate to water-based chemistry to manufacture lithium cells and we are one of the first ones to conquer that process.”

Source: Mark Mills, International Battery
Writer: John Steele

Ben Franklin Technology Partners announce $100K for NEPA web detectives

Like any good detective, Hawley entrepreneur Doug LaPasta does his homework. When he heard that Ben Franklin Technology Partners of Northeastern PA were releasing another round of funding for startups in his hometown, he read the grant, compiled the documents on his first Ben Franklin project--the still-profitable Skill Survey--and pleaded his case. The due diligence paid off as LaPasta’s new venture walked away with $100,000, the largest take for any start-up among the roster of 12 Northeastern PA companies that were recently funded.

LaPasta is no stranger to due diligence. His newest web-based startup is eVendorCheck, an online detective agency designed to track suppliers, manufacturers and investment firms for companies looking to hire them. Basically, it’s a business background check to make sure that everything is on the level. LaPasta believes his system to have great growth potential to combat what he calls a global problem.

“Every organization in the world needs to procure goods and services from a vendor but supply chain failures have been increasing to the point where this has become a global crisis,” says LaPasta. “If I wanted to check into a vendor, it used to be I could only get financial data. Is this a firm that delivers on time? What is their quality like? How is their customer service? Do they operate in an honest and ethical way? These things are opaque to the people looking to buy these services.”

As a Hawley resident since 1971, LaPasta seems the perfect candidate to help bring more jobs to the region. His company has already cemented plans to hire 25 new employees and has no plans to pull from anywhere but his own backyard.

“In 2005, when SkillSurvey received funding from Ben Franklin, they moved it to Philadelphia,” says LaPasta. “But this time, with Prudential offshoring jobs out of the region, I wanted to keep my operation here. Hawley is my home.”

Source: Doug LaPasta, eVendorCheck
Writer: John Steele

NSF grant gives Villanova X-Ray Vision

Every comic-obsessed geek dreams of developing x-ray vision. You could see into the girl’s locker room or find out the answers to a test. Luckily, the folks behind Villanova’s acoustic technologies research have more honorable principals in mind.

The university’s Center for Advanced Communication announced receipt of a $600,000 National Science Foundation grant this week to aid in their use of acoustic and ultrasound technologies in medicine and industry. The frequencies allow researchers to see inside heavy machinery or even a human heart, take images and find microscopic cracks or tears, allowing for prevention of much bigger problems.

“These technologies could improve clinical diagnoses of medical problems concerning blood flow, heart abnormalities and anomalies in tissues and organs,” says chief researcher and director of the CAC, Dr. Moeness Amin. “In addition, for industrial application, it will allow performing better machine monitoring and predictive maintenance of equipment.”

Already, the technology has worked on projects like finding cracks in wind turbine blades and photographing blood clots. This new funding will allow the CAC to hire additional research fellows and, in a partnership with Bucknell University, develop a new course in acoustic and ultrasound which can be jointly taught at both campuses in their undergraduate engineering programs.

As this project is just a week old, it is too early to tell when a marketable product may emerge but perhaps CAC should hold off on producing x-ray specs just yet. They may fall into the wrong hands.

Source: Moeness Amin, Center for Advanced Communication
Writer: John Steele


Applied Computational Technologies reaching capital goal

Windber’s Applied Computational Technologies (ACT) is nearing its goal of venture capital funding and is having conversations with international buyers for its life sciences software.

ACT develops software applications for radiation treatment planning for cancer therapy. Although more than 65 percent of the cancer patients in the U.S.--some 1.4 million--receive radiation therapy, achieving the correct dose calculation has been a challenge for treatment systems. The company’s ProActive (TM) technology/software package offerings better accuracy and as a result, better outcomes and lower costs.

Four-person ACT is housed at Windber Research Institute, a cancer research facility south of Johnstown in Windber designated as both a Keystone Innovation Zone and a Keystone Opportunity Zone. Founded in 2003, ACT has received solid support from both the Pittsburgh Life Science Greenhouse, which has invested $430,000, and from the Ben Franklin Technology Partners of Central/Northern Pennsylvania (BFTP/CNP), which has contributed $500,000 over three rounds. With lead funding from Blue Tree Allied Angels of Pittsburgh, co-founder Jay McClatchey says ACT has already raised “more than half” of the current round of venture capital and is “close to a deal,” though he declined to give specifics.

Company founders McClatchey and Andy Holland hired Kathy Blum as CEO in mid-2008. McClatchey says ACT’s long-term goal is to sell to a radiation treatment system provider.

"This is an international market. There are five or ten companies in the world that dominate, and we’re talking to all of them," he says.

Source: Jay McClatchey, ACT

Writer: Chris O’Toole


Lehigh Valley Chamber Foundation to spruce up local Main Streets

Have you ever walked along the Southside streets of Bethlehem and wondered why none of the businesses are empty or how they attracted huge businesses like the Bethlehem Sands Casino? Or how community gatherings like Allentown’s Blues, Brews and Barbecue continue to attract sweeping business partnerships each year? If you ask the Lehigh Valley Chamber of Commerce, they will tell you that developing main streets make communities thrive and attract new businesses. But these main streets don’t stay so beautiful on their own.

That’s why the Lehigh Valley Chamber Foundation, which serves as the charitable arm of the Chamber of Commerce, just issued its third community improvement grant this week. The grant, which will go towards improvements and business retention efforts, furthers the Lehigh Valley Chamber’s stated commitment to building communities around vibrant main street corridors.

“These projects will enhance our main streets in the cities and in the boroughs,” says the Chamber’s Assistant to the President Lorie Reinert. “Our employees work with local business owners on anything to make these communities more attractive to business owners. From new benches and lampposts to farmers market banners to studies on parking.”

The grant framework states that recipients must have a proposal revolving around a few key premises. Applicants must develop or improve existing civic, cultural, recreational, or industrial activities; assist in business retention, expansion, creation or attraction; promote the creation of jobs and employment opportunities; or enhance the health, welfare and quality of life of Lehigh Valley citizens. In the past, the Chamber Foundation have hung their hats proudly on such efforts and hope this grant will continue their success.

“Our Borough Business Revitalization Program had 136 new businesses, 128 new jobs, 71 renovated facades,” says Reinert. “So even though these grants are often relatively small amounts of money, we can use them to leverage more money, like providing a 50-percent match to county governments or business owners to make these projects happen.”

Source: Lorie Reinert, Greater Lehigh Valley Chamber of Commerce
Writer: John Steele

Will the real Philly Startup Leaders please stand up?

These days, there is a support group for just about everything. Sad? Depressed? Addicted? There is a circle of guys and gals just like you in a church basement somewhere. But just a few short years ago, Philly’s entrepreneurial landscape was a harsh, unfeeling place where would-be business owners struggled to find support. All they needed was a place where they could share their hopes and fears, and maybe exchange business cards by the coffee and doughnuts.

Blake Jennelle was among the disaffected dreamers, hoping for his own circle of trust. So he started Philly Startup Leaders and, for the last three years, their staff has played host to over 30 events per year, including traditions like PSL poker, Starter Stories and PSL Vice Squad. But now, after creating an organization over 650 members strong, Jenelle and his staff are stepping down, calling for top-down overhaul in an effort to keep the group fresh for future members.

“The current leadership has been there since the beginning, we have done great things and if we stuck with the status quo, we would continue to,” says Jennelle. “But its important to keep a fresh perspective. Our staff is now leading 80-hour-a-week startup lives and we want to leave it to people who have the time and energy to put into it that we had when we first started.”

Jennelle sees the group as a launch pad where entrepreneurs can share ideas and plan for the future so the fact that his team doesn’t have time to donate to the group is a good problem. He and his team hope the group continues the trend, changing leadership every 2-3 years.

“We designed this in a way where there is a tremendous amount of continuity so every new member can outdo the one before him,” Jennelle says. “We hope to have candidates observe their new role for 3-6 months before they take it on so they can really understand the role. It’s also a test period to be sure the group likes them and that they won’t flake out.”

 If you think you are the next Philly Startup Leader, Apply here. Flakes need not apply.

Source: Blake Jennelle, PSL President
Writer: John Steele


Event aims to Spark entrepreneurship in Philly

Jason Brewer, who founded his own interactive agency while a sophomore at Penn State in 2004, has played a major role in many recent Philadelphia debuts, like the Philadelphia Film Market film festival/industry gathering and Philadelphia Fashion Week. He’s now planning for an encore for one of his most successful efforts.

Spark, an entrepreneurial conference and networking event that successfully debuted last year, announced its call for entries for this year’s edition on May 24 in Philadelphia.

“Spark provides a niche for people in the start-up stage as it provides access to investors, advisers and consultants that they otherwise would not have the ability to connect with,” says Brewer, founder and CEO of Brolik Productions and founder of Spark.

Brolik’s and Brewer’s approach, which is to empower clients with creative strategy, technology and marketing solutions, is very much a part of Spark. The conference’s morning session includes educational workshops and networking. In addition, early stage startups in the technology, clean-tech and no-tech sectors that have a business plan and a proven concept are encouraged to apply to present at the Spark Pitch Sessions in the afternoon.  

Applications will be reviewed by an expert panel and narrowed to 25-30 companies that will be invited to present their business concepts in five minutes at the Spark Pitch Sessions. Angel investors, successful entrepreneurs, venture consultants and experienced advisors will ask questions, offer feedback and tap into the audience’s expertise, as well. Deadline for applications is May 4, and tickets are available here.

“The conference brings together early stage entrepreneurs to network with potential investors, gain valuable insight about growing their business, and gain access to the best resources in the Philadelphia region and at a cost that fits their tight-minded budget,” says Brewer.

Source: Jason Brewer, Brolik Productions
Writer: Joe Petrucci

Philly's NearVerse zooms to top of iPhone app list, gets Pittsburgh VC help

With Lokast, a mobile app that allows proximate users to share bandwidth and increase download speeds, Philadelphia’s NearVerse is on a high. Riding the top of the iPhone app charts  last week, it announced a $1 million investment from Meakem Becker, a Pittsburgh-based venture capital firm.

Lokast turns every mobile phone or WiFi mobile device into a router, so users within 300 feet of each other can share bandwidth. That connects any crowd--say, on college campuses or at musical concerts.  A marketing strategy that targets the music community made a strong impact at SXSW, the annual Austin music, film, and interactive conference. PCWorld named Lokast, one of the top five apps to come out of this year's SXSW; blog ZDNet said Lokast's presence at the festival was more noteworthy than Twitter.And when Apple featured Lokast as one of one of its new and notable apps, beginning last week, users piled on.

“We’ve added 25,000 users in the last three weeks,” says NearVerse co-founder Boris Bogatin. Lokast peaked as the iStore’s number one social networking app last week. Bogatin says the infusion from Meakem Becker, which will seat two representatives on the NearVerse board, will allow the company to expand within its music niche.

“We’re focusing on music quite a bit, actively in discussion with labels and individual bands,” explains Bogatin. “They’re using the Lokast as a digital stage” to drive engagement, sales, and merchandising. Philly-based band The Roots, now Jimmy Fallon’s late night TV house band, is among NearVerse’s users, as is Boxer Rebellion, whose album topped the UK alt charts last year.

“Behind the Locast app, we’re a hardcore network engineering company,” says Bogatin, whose background in developing 4G wireless goes back a decade. He says the firm is looking to add engineers at its downtown Philadelphia location.

Source: Boris Bogatin, NearVerse

Writer: Chris O’Toole


Malvern tech startup has the power to convert accepted wisdom into efficiency

For close to a generation, power converters have switched power supplies in much the same way as they always have. A Malvern-based startup, however, is re-examining that accepted wisdom in light of new control technology, improved components and changing economies  driven by energy cost and availability. The end result is improved efficiency, of course a buzz word in an ever-greening world, and that, more than anything, has CogniPower poised for big things in the near future.

“It’s time for innovative thinking,” says Thomas Lawson, who founded Lawson Labs, a 30 year-old data acquisition company focused on rarified markets and analytic instruments that spun out CogniPower a little more than a year ago. “People are being held back by the limitations of controls of power converters.”

The keys to improving power converters, Lawson indicates, lie in predictive energy balancing, precisely timed and controlled switching, and better current measurement. The company has developed an improved way to monitor current in the high-speed, high-current environment that is found in switched-mode power converters. CogniPower hopes to market that technology to build better power products.

“These unique capabilities allow you to skip a whole stage of power conversion,” says Lawson. “We can make a power converter that’s enough better than a conventional one, that one of ours can replace two.”
Cogniower has already had two patents issued and another 14 in the pipeline. That doesn’t include about 12 patents previously issued to Lawson and co-inventor William H. Morong.

John Ryan, who founded and ran Sungard Data Systems and is president of IT venture capital firm Devon Hill Ventures, has taken the company under his wing and is involved in day-to-day operations. CogniPower is hoping to raise $750,000 to help get to a position of profitability. The company received a $200,000 commitment late last year from Ben Franklin Technology Partners of Southeastern Pennsylvania.

Lawson is eyeing data centers, personal computers, electric and hybrid vehicles, LED lighting, wind power and solar inverters as potential markets for CogniPower’s boosted converters.  Smart Grids would also be a potentially lucrative space for the company.

“If we can license our intellectual property then that’s a very streamlined way to get this technology out into broad use,” Lawson says.

Source: Thomas Lawson, CogniPower
Writer:  Joe Petrucci

Wilkes Barre's Babyage growing up with $15 million investment

With recession-busting double-digit growth in 2009, Wilkes Barre's Babyage is expanding with an infusion of $15 million in private equity and venture capital. The online retailer of clothing and furniture for babies, toddlers and youngsters will use the investment to expand its product line and potentially its workforce and warehouse in Hanover Township. Alumni Capital Network and Brook Venture Capital, a current investor, provided the new round of financing.

"Right now, we’re about at capacity in our warehouse," says COO Joe Sponholz of the facility located in the Hanover Industrial Estates. "Over the next six to nine months, before the next holiday season, we will grow. Whether it’s a second location or new building, I’ll withhold comment.” Founded in 2000, BabyAge now employs 32. Warehouse capacity--currently 55,000 square feet--has been a significant factor in meeting the competition from big-box stores, says Sponholz, allowing Babyage to offer a wider variety of products with same-day shipping. 

"Every generation is becoming more comfortable with technology in general, more confident in using the Internet for significant purchases," says Sponholz. That’s especially true of the new-parent demographic Babyage targets.

Sponholz says the firm markets some products in the Canadian market and plans to expand to Europe in categories where products aren’t subject to conflicting municipal design regulations.

Source: Joe Sponholz, Babyage
Writer: Chris O’Toole


Venture capital boot camp for Western PA entrepreneurs

It’s all about the Benjamins.

That’s why the Pittsburgh Technology Council is producing Venture Out, a series of how-to seminars for entrepreneurs on how to grab their share of high-risk growth capital. The nine-part series kicks off March 31 and meets monthly.

The March 31 introductory session on resources includes a panel discussion by the region’s best economic development and entrepreneurial minds. Pete DeComo, CEO of ALung Technologies, chairs the session. CEOs of portfolio companies of Innovation Works, the Pittsburgh Life Sciences Greenhouse, and Technology Collaborative will provide feedback. "The whole purpose is to help entrepreneurs whose firms are less than five years old to learn via case studies and network to meet people in region," says Melissa Unger, business growth services director of the PTC.

Future topics include how-to's on intellectual property, angel funding, institutional money, tools, hiring, building a customer base, staying out of trouble and planning for an exit. "We go in depth," says Unger. "For intellectual property, you'll hear all the points of view--the legal perspective, the VC perspective, and the start-up's perspective." 

Cost per session is $25 for entrepreneur members of the Tech Council, $50 for other PTC members, and $175 for non-members. Register here.

Source: Melissa Unger, PTC
Writer: Chris O'Toole


Rebranding yields new name and spirit for SeventySix Capital

ETF Venture Funds has a new name, and it has as much to do with its location as it does the historic innovation and entrepreneurship it represents. The West Conshohocken early stage venture capital firm, located close to the I-76 expressway, is now SeventySix Capital, a rebranding that the company hopes will capitalize on its “roll up your sleeves approach” that invokes the nation’s founding fathers in nearby Philadelphia back in 1776.

“Our ability to source the best investment opportunities, coupled with the value of our relationship network, has enabled us to build market-leading companies and deliver excellent returns for our investors, while simultaneously creating thousands of jobs and driving innovation,” says managing partner Wayne Kimmel.

SeventySix’s portfolio companies boast more than $5 billion in revenues and support more than 6,000 jobs. Its focus is on innovation-driven companies in healthcare, mobile, media and entertainment, greentech and business 2.0 industries. Its more notable companies include SeamlessWeb (acquired by Aramark), Nutrisystem, Take Care Health Systems (acquired by Walgreens), meetMoi, ReverbNation, Organized Wisdom and Fisker Automotive.

The 10 year-old firm boasts some powerful talent and supporters throughout the state. State treasurer Rob McCord is a partner emeritus and Brian Tierney, CEO of Philadelphia Media Holdings, is an advisory board member.

Source: Wayne Kimmel, SeventySix Capital

Writer: Joe Petrucci

Philly company injects logic into social media listening

When national casual dining chain Red Robin saw a petition circulating online from customers who demanded veggie burgers be offered at its restaurants, the company was floored. Red Robin, in fact, served veggie burgers, and immediately realized that it was imperative to know what people were saying online--and in a hurry.

The story is the exclamation point on ListenLogic’s rapidly developing story. The virtual company, which has headquarters in Philadelphia and an office in Silicon Valley, Calif., received $250,000 in funding from Ben Franklin Technology Partners of Southeastern PA after an earlier $125,000 investment.

“There are over 150 million blogs and millions are tweeting every day,” says Vince Schiavone, ListenLogic’s co-founder and managing partner. “There’s always been an interest in learning about consumers, but now those consumers are defining the brands.”

The company’s RESONATE listening platform does more than just social media monitoring. It is a sort of social media “intelligence” tool that processes various online messages into a comprehensive, enterprise-wide report covering PR, legal, product development, marketing, customer service and business intelligence, among others. ListenLogic has consciously bridged the gap between Silicon Valley and Philly en route to utilizing supercomputing technology to compile real-time data on a client.

The company, which employs 10 in Philly and expects to quadruple that number in the coming year or so, has raised more than $1 million from angel investors.  Its clients include Digitas Health and GSI Commerce locally.

“Today you have to build a company in stealth mode,” says Shicavone. “We spent 18 months building this technology to have a very powerful skimming technology. Our CEO has eight patents in supercomputing. We’ll be profitable.”

Source: Vince Schiavone, ListenLogic

Writer: Joe Petrucci


Pittsburgh's health care start-up investment ranked 4th in midwest

Western Pennsylvania posted the largest number of  health care venture deals among 14 midwestern regions in 2009, with a dollar value of $37.8 million, according to a report from  BioEnterprise 

Areas from Wisconsin to Lousiville included in the annual rankings showed a total number of investments  comparable to 2008. But in the Pittsburgh region as elsewhere, dollars were down last year. The report showed a 26 percent drop from 2008,  reflecting the national trend.

Pittsburgh’s deal volume grew steadily from 2006 to 2008, rising from $54.4 million to $126.2 million.  The number of deals over those years peaked at 33 in 2008.

The report showed Minnesota companies attracting the most investment dollars within the Midwest.
Minneapolis led the regions in terms of dollars invested, $199 million, followed by Cincinnati at $121.2 million.

Biopharmaceutical firms grabbed nearly half of the dollars in 2009, with medical device companies (34 percent) and software and service companies (18 percent) comprising the balance. “While the dollars to biotech companies are larger, the number of companies attracting capital is balanced between biotech and medical devices,” said Baiju R. Shah, CEO of BioEnterprise. The Cleveland-based biomedical venture developer has compiled data on investments annually for the past five years. “This reflects the industry balance in the Midwest as compared to the coasts.”

View the full report here.

Source: Annette Ballou, BioEnterprise
Writer: Chris O'Toole


Mondays less manic thanks to mobile industry forum in Philly

While Mondays might be notoriously unpleasant for much of the corporate world, they seem perfectly suited for those working in the wireless industry. A standing room-only crowd of more than 300 attended the third annual Mobile Monday Mid-Atlantic DEMO event on Monday at the Hub at Cira Centre in Center City Philadelphia.

Mobile Monday is a global community of wireless industry professionals with close to 40 chapters worldwide. Sponsored by forward-looking mobile companies, it fosters cooperation and networking among interest groups, industry people and their companies. Monday’s event, which featured 10 companies from the region who made presentations to an eager-to-learn and –share audience, was easily the Mid-Atlantic chapter’s most successful event and indicative of the mobile movement in Southeastern PA and beyond.
IT research and advisory firm Gartner recently revealed that consumers will spend $6.2 billion on mobile applications in the next year.

“You can’t avoid hearing or reading what’s going on in the mobile applications market,” says Ron Braunfeld, one of the chapter’s board members. He is vice-president of business development for Boston-based uLocate and lives in suburban Philadelphia. “We’re trying to create as wide an array of presenters and content for our members to interact with as possible. I think the biggest thing that happened (Monday) night was companies got a chance to get immediate feedback by a very large audience.”

Southeastern PA was well-represented. Mobile payment newcomer Venmo was voted as the top presenter of the night and also raised close to $1,000 for Haitian relief via text donations. Mobile language learning provider PlaySay and ReadySetWork, a tool for employee scheduling, were the other finalists. Also presenting were 2WAYTXT, AirClic, CLEAR, Liquid Interactive, Mobile Attainment, Snac, and Yuxi Pacific Group. Philadelphia City Councilman Bill Green, widely considered a champion of business in the city, also presented.

Monday’s DEMO night is among five events Mobile Monday Mid-Atlantic sponsors throughout the year. The group’s next event is in March, when it will stage an event for mobile healthcare companies.

“There’s a hotbed of interest and talent in this region,” says Braunfeld. “(Monday night’s) presentation was spot on in addressing that.”

Source: Ron Braunfeld, Mobile Monday Mid-Atlantic
Writer: Joe Petrucci

Places to be: More than Steelers for Pittsburgh pride

And Pittsburgh thought it couldn't get any better. A sixth Super Bowl ring was a great way to start the year. But with the world's attention on the city for the G20 Summit in the fall, it had only just beginin the Steel City.

Pittsburgh was the hot spot for a variety of lists and rankings--CNN called it a best place to launch a business, Forbes ranked its housing market among the nation's top 25 and its job market the sixth-fastest growing nationally, and the Institute for America's Future highlighted Pittsburgh as a model for modern manufacturing.

By the time G20 came in late September, Pittsburgh was ready. The city was beautified and every boast-able attribute was on full display, most notably the green building that Pittsburgh has become known for. Riverfront development continued along the Mon wharfAngel investors were kept busy with an uptick of technology start-ups, Carnegie Mellon and Pitt continued to lead technology commercialization efforts, while the University of Pittsbugh Medical Center moved on some significant projects.

Culturally, Pittsburgh's smorgasboard grew with the opening of The August Wilson Center, Rivers Casino and the city's first Spanish-language newspaper. More than 2,000 tech-saavy activists gathered here for the NetRoots 2009 conference.

With growth in the energy space and a variety of different enterprises like life sciences, high technology and advanced manufacturing thriving with significant operations here, Pittsburgh's upward swing figures to continue, if not on the football field, certainly in the ledgers.

Source: Keystone Edge

Writer: Joe Petrucci

Places to be: Young workers wanted in Altoona-Blair County

Need a job? Go to Altoona. That's right, that Altoona in Blair County. The old railroad town has erased industrial decline thanks in large part to the work of the Altoona-Blair County Development (ABCD) Corporation, which created or retained more than 2,300 jobs in the last year and received national recognition.

N.E.W. Customer Service Companies opened its 11th call center in Altoona in the spring, adding 481 jobs. ABCD also worked to bring in newcomers like Diversapack and Advanced Metal Processing, who added 185 jobs combined in the county. High-tech is also well represented thanks to INRange Systems, which was named one of the continent's top 100 tech ventures, joining past winners like Yahoo, Google, Skype and YouTube. The North Allegheny Wind Project, which straddles Blair and Cambira counties, has contributed to the state's growth in wind energy.

Penn State-Altoona's innovative rail and transit engineering program, expected to enroll its first students in the fall of 2010, will help keep local talent closer to home as rail projects beef up across the Commonwealth.  Thanks to $2.5 million from the family of Altoona-based Sheetz, the school will also open an entrepreneurial studies center that will be the cornerstone of the school's facilities, which are part of an ongoing, large-scale redevelopment of the downtown.

With partnerships with Penn State-Altoona and Ben Franklin Technology Partners, the goal for ABCD is to keep young people in Altoona. With a vibrant downtown and plentiful jobs, that just got a whole lot easier.

Source: Keystone Edge
Writer: Joe Petrucci

Keystone Edge on holiday break, next issue Jan. 14

We know many of our story subjects and readers will get a much-deserved opportunity to break away from the office during the next several weeks. As a result, Keystone Edge will take a holiday break from publishing from Dec. 18 through Jan. 13.

Keystone Edge's next online edition will publish on Jan. 14, when we'll feature the growing number of forums and events that spotlight entrepreneurs, their innovative ideas, and the resources and talent available to them.

Also in the first quarter of 2010, Keystone Edge will look at PA companies working on integrating their business into proposed healthcare reform, how higher education is one of the state's top industries, and the Commonwealth's growing Artisan Trails program.
 
We'll continue to report on innovative and growing companies and profile the state's most interesting entrepreneurs, researchers and artists. If you have any story ideas for the new year, please reach out to us here.

Thanks for reading and helping to make Keystone Edge the state's premiere voice on what makes PA among the nation's most desirable places to work, study, live and play.

Happy Holidays,

-Joe Petrucci, Managing Editor for Keystone Edge


Gauging the Growth Sectors: Sustainability Soars

Green jobs, green technology and green behaviors are being touted as the country's escape from the recession and its re-emergence. Oh yeah, they're also counted on to protect our environment. In Pennsylvania, Harrisburg's implementation of several policies, like Act 29 and other incentives and rebates meant to help businesses and citizens implement green practices, make the Commonwealth among the national leaders in clean energy development.

PA was ranked third in the country for green jobs, and it's not hard to see why. Companies like Pace Controls, Viridity Energy, Enginuity Energy, SRS Energy, E-Mon, and Komax Solar. Wind power is every bit as prevalent as solar, with Iberdrola Renewables, Gamesa and AES all undertaking significant wind power projects in the Keystone State.

Just as quickly as clean energy emerged as a national priority, regional organizations are playing major roles in positioning their geographies as locations or business and green innovation. Pennergy is doing it in Central PA and the Energy Alliance of Southwestern PA will fund energy-related start-ups, and the Green Building Alliances of both Philadelphia and Pittsburgh were recognized as trendsetters in a sector full of opportunity.

When the world descended on Pittsburgh for the G20 Summit in October, leaders and visitors saw the Steel City's amazing transformation through sustainable redevelopment. With that as a lasting symbol, Pennsylvania appears to maintain a major role in sustainability and clean energy initiatives in both the private and public sectors.

Source: Keystone Edge

Writer: Joe Petrucci

Gauging the Growth Sectors: Life Sciences Loom Large

A Milken Institute study found Greater Philadelphia passed San Francisco and is closing in on Boston as the nation's top life sciences region.

While the well-established pharmaceutical industry, entrenched medical research institutions and a growing medical devices sector have helped Greater Philadelphia gain a larger share of the spotlight, there are a number of promising companies that are making it an even more competitive and lucrative location for life sciences success.

Healthy Humans, Hershey's Apeliotus, Pittsburgh's ALung, Pinnacle Health, Scranton's Life Science Analytics, and Horsham's Verilogue are among those most interesting companies that are innovating the industry's processes, devices and information.

As healthcare reform promises to be Washington D.C.'s primary focus early in 2010, Pennsylvania is poised not only to play a major role in increasing efficiencies, cutting costs and providing new solutions, but the state is very much a leader in existing and planned initiatives to bolster reform. Danville-based Geisinger Health System and its venture arm, Geisinger Ventures, have gained national attention for its innovation.

Thanks to the University of Pittsburgh Medical Center, with its planned vaccine center that could create thousands of jobs, and the Pittsburgh Life Sciences Greenhouse, with increased investments, in new companies, Western PA is flexing its life sciences muscles.

Other companies are helping establish other parts of the state as fertile life sciences ground, like Unilife in Lewisberry,  York County.

Regardless of what healthcare reform might bring, Pennsylvania figures prominently in its implementation in the short-term and for the long haul.

Source: Keystone Edge

Writer: Joe Petrucci

Gauging the Growth Sectors: Entrepreneurship Enters New Era

Across the state, as displaced workers from large, tried and true corporations looked to re-define their careers in the last year, many Pennsylvanians opted to take daring leaps and strike out on their own, even as the economy continued to struggle.  Meanwhile, emerging sectors like sustainability and life sciences provided ample opportunity for them to explore their entrepreneurial side.

Throw in organizations like Ben Franklin Technology Partners, Philly Start-Up Leaders, the Institute for Entrepreneurial Excellence, DreamIt Ventures, the NEPA Venture Partnership and the Murata Business Center, and there is no shortage of assistance. The key moving forward, most everyone has said, is letting people know they're there and how they can help.

Not surprisingly, young people are dominating the landscape, like 23 year-old Sara Lanphier's Nuts About Granola, the York outfit that was featured on the Rachel Ray TV show; 25 year-old Scranton real estate king Tim O'Brien; and the twenty-something trio that is driving the success of the online motorcycle marketplace known as RevZilla.

The old dogs can still bite, though, like serial entrepreneurs Jake St. Pierre of Hazleton CanBE, Michael Sanchez of the Main Line's Savana Partners and Steven Nichtberger of Norristown's Tengion.

In Philadelphia, Jose Garces led a pack of super chefs that are paving the way for entrepreneurs to take their shot in the city's growing food service business. The growth of the arts is fueling opportunities in Harrisburg's Midtown district, where coffee shops, galleries and boutiques are thriving in a previously residential area. For the thirsty, Ron Kamionka continued his stretch of opening successful nightclubs and watering holes throughout the state and a pair of distilleries and microbreweries from Valley Forge to Williamsport are also quenching that thirst.

In the next year, expect entrepreneurship in PA to continue trending upward as the Obama administration shifts its focus from Wall Street to Main Street. In a state known for its Main Street feel, that's good news for risk-takers with good ideas.

Source: Keystone Edge
Writer: Joe Petrucci

Apeliotus vision device in clinical trials

An effective device to quickly diagnose age-related macular degeneration (AMD), now undergoing clinical trials at Penn State Hershey Medical Center has won Apeliotus Vision Sciences  $200,000 from the Ben Franklin Technology Partners of Central and Northern Pennsylvania. The company also took home first prize at the Ben Franklin Venture Idol competition, which was co-hosted by NEPA Venture Partnership, in Scranton last week.

Apeliotus’ AdaptDx device measures the eye’s ability to transition from light to dark. The 15-minute test is key to diagnosing AMD, the leading cause of adult blindness. Clinical trials for the device, similar in size and cost to existing glaucoma testing equipment, are being conducted separately by Drs. Greg Jackson and David Quillen at Hershey.

Company CEO John Edwards says the three-person firm plans to increase direct staff in the Hershey area to 15 within the next two years. He cites the proximity of the Medical Center and the Hershey Center for Applied Research, its current home, as key factors in the expansion decision.

"Things have progressed so we’re now looking for $5 million in total capital. That’s what we need to get to complete commercialization," says Edwards. That’s an increase from the $2 million the firm envisioned two years ago. The firm’s previous investors include Life Sciences Greenhouse of Central Pennsylvania and Ben Franklin Technology Partners. 

Source: John Edwards, Apeliotus Vision Sciences
Writer: Chris O’Toole


Biotech 2009: Helixman and Pennsylvania Bio to the rescue

On a creative whim, an intern at Pennsylvania Bio created the character Helixman, "investigator of all things interesting and protector of all things innovative" who has guided readers through 14 trips to different parts of the state, uncovering their bioscience gems.

"It's really clever, just one of those things to have a little fun, especially in today's environment where everyone is a little dour," says Mickey Flynn, president of the statewide trade association.

That's a theme that Flynn's organization has helped bring to Biotech 2009, the world's annual premiere biosciences conference, at the Pennsylvania Convention Center on Nov. 16-17. More specifically, Flynn and company are trying to inject life into an industry that, like most others, is still feeling the grim effects of the global recession.

Biotech 2009 promises to do just that, as well as give potential collaborators or partners forums to present, share and drill down ideas.  Thirty-seven companies will make 15-minute presentations on their latest and greatest discoveries, while there will be 18 "partnering suites," for company reps to meet and share ideas.  Some new additions to the conference program includes FDA updates as well as social media.

"Everybody recognizes how important it is, especially when times are tough, to get together and share ideas," says Flynn. "We tried to adjust our programs to what's happening with the current state of affairs."

The conference also features a record-size Innovation Corridor, in which students, faculty, investigators and entrepreneurs compete in a judged poster presentation.

Flynn expects about 800 attendees, double the number that participated only five years ago.

Source: Mickey Flynn, Pennsylvania Bio

Writer: Joe Petrucci

Pittsburgh Tech Council report finds deep pockets, pockets of growth

Pittsburgh Technology Council CEO Audrey Russo can't exactly recite a litany of positive numbers off the top of her head from her organization's State of the Industry report. This week, she had to pull over her car and pull out her copy of the report to extract some of the good news--not because she's uninformed, but the report doesn't reveal any overwhelming figures.

It does, however, indicate continued steady growth as well as Greater Pittsburgh being a bellwether--not a lagging indicator. Most notably, Russo says, the technology sector represents 19.4 percent of the workforce and 27.5 percent of the total payroll in a 13-county region in Southwest PA.

"We didn't lose that many jobs and didn't gain many jobs because people are thinking really hard before they hire people," says Russo. "The technology that was being developed during this recession, all the solutions created are going to be highly leveraged."

The aforementioned numbers are significant because technology companies represent only 11.2 percent of all companies in the region, meaning the sector is doing an admirable job of job creation and setting high wages.

Russo is excited by what's going on in the region on the life sciences (8.6 percent total growth) and environmental tech (12.6 percent increase in payroll) fronts. Russo also noted a 66-percent increase in Small Business Innovation Research grants ($14.3 million). However, she tempers that with a concern about venture capital and diminished state dollars for technology investment, like the kind through Ben Franklin Technology Partners--issues faced across the Commonwealth.

"That's what helps build companies," she says. "We have some really good success stories and we have to continue to feed it to (legislators)."

For its part, the Council intends to stay ahead of trends and legislation. Next week alone, the Council is holding programs that include the director of the National Renewable Energy Laboratory and a pair of influential authors to discuss President Barack Obama's innovation strategy.

"It's an exciting time to be here," says Russo. "The amount of diversity we have here is very wide and now's the time to make it deeper."

Source:  Audrey Russo, Pittsburgh Technology Council

Writer: Joe Petrucci

Founder Factory a sell-out for Philly entrepreneurs

Blake Jennelle and his Philly Start-Up Leaders did something that many up-and-coming musicians hope to do every night--sell out World Café Live, the hip haven in University City, Philadelphia. The crowd, however, were eager entrepreneurs, and taking the stage last November were some of the region's most accomplished entrepreneurs and business strategists.

The event, dubbed Founder Factory, was PSL's biggest event, and should be just as big on Nov. 19, when World Café Live will play host once again to the "big fishbowl."

"The goal is to inspire people," says Jennelle, PSL's founder and director of marketing for Philly start-up TicketLeap. "it's like getting a shot of adrenaline, to come in and hear some of your role models telling their uncensored story, you leave there with the sense that not only can you do this too, but you can't wait to get back to the office in the morning and get going."

The event also features "fishbowl" companies who seek help on certain issues. They include motorcycle e-commerce firm RevZilla, allowance and rewards platform Kidzillions and language learning provider PlaySay.

Speakers include Doug Alexander, the president of Internet Capital Group; Geoff Cook, CEO of myYearbook; Gil Beyda, managing partner of Genacast Ventures; Jeremy J. Siegel of The Wharton School; and David Brussin, CEO of Monetate.

"The biggest lesson from last year was this is fantastic, don't screw it up," jokes Jennelle. "This year, World Café has said clearly, you can't sell more than 200 tickets. We're not sold out yet, but close."

Source: Blake Jennelle, Philly Start-Up Leaders

Writer: Joe Petrucci








Lebanon's Sting Communications fast-tracked for rural broadband project

Focusing on creating telecommunications networks for rural health care and education, Sting Communications has found a fast-growth niche. The Lebanon-based firm has grown its revenue 35 percent and has added a dozen jobs in the past 18 months as it focuses on bringing broadband to underserved regions of the state.

Sting, with over 40 employees, was the only central Pennsylvania-based firm to get a green light from the state on a recent application to apply federal stimulus money to rural broadband. Its proposal would link the University of Pittsburgh Medical Center, 13 rural hospitals; public safety systems in Venango, Jefferson and Forest counties; school districts; local Internet service providers; and three locations for the state's emergency management system. The state forwarded the $5 million grant application to Washington D.C., where a final decision will be made "around Thanksgiving," says Randy Eccles of Sting.

Sting is already working with the University of Pittsburgh Medical Center to connect urban-based specialists with other rural community hospitals and with the Northwest Technology Council to drive broadband growth in  northwestern Pennsylvania.

Sting created a statewide network for Pennsylvania’s regional intermediate units, which oversee technology and curriculum services, and is also the network provider for 35 school districts in the state. Those relationships positioned the firm to capitalize on Act 183, which addresses bringing broadband to rural areas. In 2006-2007, Sting lit over 1,000 miles of fiber backbone, constructed middle-mile solutions in 33 counties, and built 200 miles of fiber in central and Northwest Pennsylvania.

The nine-year-old firm is backed by angel investors in Harrisburg and professional support from a New York equity firm and institutional bank.  

Source: Randy Eccles, Sting Communications
Writer: Chris O’Toole


West Conshohocken first-mover operates outside the "system" with serotonin

Stephen Roth was a half step away from retiring when reps from a two year-old Boston life sciences company approached him with their idea, and how they believed serotonin was a critical growth factor for lymphocytes. But in all his years as a professor of biochemistry at Johns Hopkins and successful CEO of a life sciences company he founded, Roth never heard that detail about serotonin and lymphocytes.


Roth felt so strongly about exploring it that he was able to move the company to Pennsylvania so he could become CEO of Immune Control, Inc.


"In those days, the concept of serotonin being required for immune system activation was broadly unheard of, but their data was convincing, and a lot of things made sense under that hypothesis," says Roth, whose company develops novel, orally available, small molecules for autoimmune and inflammatory diseases and is working to commercialize the discovery that certain serotonin antagonists eliminate activated or dividing lymphocytes without disturbing resting ones.  That ability can make or break treatment for blood cancers and organ transplant rejections, to name a few.


Practically all of the pharmaceutical chemistry testing on these compounds has been done in the central nervous system. Immune Control makes their own compounds, but can't do it on the same scale as big pharma, so Roth is hoping he can pursue partnerships that would allow the company to access the thousands of drugs big pharma has developed but rejected because they're outside the central nervous system.


Until that happens, virtually all of Immune Control's time is spent on making new compounds designed to stay outside of the central nervous system.


Initially funded locally by Ben Franklin Technology Partners, Innovation Philadelphia, and the Lore angel investors group, Immune Control has four employees and outsources much of its research work to universities and clinical research organizations (like Penn and Drexel). In the last year, the company received bridge financing from existing investors totaling $6 million, and Roth says it's working toward another large round of financing with a couple new investors sometime within the next 6-12 months.


Immune Control is involved in a nearly complete clinical trial involving psoriasis patients and is set to start a new trial on asthma patients. Roth is hoping to resume a clinical trial for blood cancer that was showing promising results before it could no longer afford to continue it.


"The beauty of our technology is you have a master switch that doesn't effect the immune system per se, but that tiny portion of the immune system that is effected," says Roth. "We're trying to eliminate only the bad subset of the immune system. You can impact them surgically rather than blasting the whole thing."


Source: Stephen Roth, Immune Control Inc.

Writer: Joe Petrucci


Job creation easy as ABCD in Altoona and Blair County

When the Altoona-Blair County Development Corporation was honored as the 2008 Large Agency of the Year by the Pennsylvania Economic Development Association last month, ABCD Corp. was recognized for nearly a dozen projects that have helped create or retain more than 2,300 jobs in the last year. That includes a micro-grant program that assists companies in R&D efforts, Penn State-Altoona's expansion into downtown Altoona and a brownfield redevelopment project that led to the DeGol Industrial Center.
 
But it all boils down to one goal, according to ABCD's marketing manager Matthew Fox.
 
"We're always dealing with brain drain, but we've been making great strides with our collaborations with Penn State-Altoona and Ben Franklin Technology Partners," says Fox. "Keep young people here, keep them growing."
 
While young people might be the key to the region's economic future, ABCD's DeGol project redeveloped 350 acres, secured $18 million in investment and $9 million in federal funding. It also helped facilitate the ribbon cuttings for Sheetz Bros. Kitchen and Customer Service Companies, Inc., both of which created more than 450 jobs.
 
Diversity of projects, it seems, has been just as important as focusing on those young folks. But it's difficult to deny the impact of PSU-Altoona's downtown work. That work was bolstered by the announcement of a $2.5 million donation from the Sheetz family for an entrepreneurial studies program that will be one of the cornerstones of the school's downtown facilities. Once the facility is up and running, it will help connect the school with Altoona's central business district, which is expected to drive further downtown development and continue to halt the region's brain drain.
 
"Penn State's expansion into downtown, it's a great thing for our vision moving forward," says Fox.

Source: Matthew Fox, ABCD Corp.
Writer: Joe Petrucci

Central PA Innovation Transfer Network receives $600K boost

Central Pennsylvania’s Innovation Transfer Networks has gotten a federal boost to encourage start-ups that pair partners from the region’s universities and private sector. The INT  has received a $600,000 grant from the National Science Foundation’s Partners for Innovation (PFI) program.

The grant is the largest available from the NSF program.  Jill Edwards of the INT says that about $150,000 to $175,000 of the grant will be available to university researchers who partner with local firms. The balance will be applied to research on the roadblocks to commercialization and developing tools to help researchers connect with companies. "Ultimately, this grant will increase awareness among researchers about commercialization," says Edwards.

The ITN aims to connect entrepreneurial faculty with business partners to help drive commercialization. Businesses have access to over 3,000 faculty members in the region who can help speed new product development, enhance product testing, and advise on intellectual property issues.

“Everybody’s excited about it. It’s a bigger pool of money than we’ve had before,"  says Eric Darr, provost of Harrisburg University. Darr noted that the grant also diversifies the ITN's sources of funding.  "Through the KIZ and the ITN  we have used (Pennsylvania Department of Community and Economic Development) funds in the past. We needed to be less dependent (on DCED)."

The NSF grant will be made to Penn State Harrisburg and shared by PSU, Harrisburg University, Dickinson College, Cheyney University, Elizabethtown College, Franklin & Marshall College, Harrisburg Area Community College, Lebanon Valley College, Messiah College, Millersville University, Penn State College of Medicine, Shippensburg University, and Lancaster General Hospital School of Nursing.

Source: Eric Darr, Harrisburg University; Jill Edwards, Innovation Transfer Network
Writer: Chris O'Toole


Main Line woman developing prototypes for green packaging

When she moved from Virginia in 2005 and brought her family and business, R&D Green Materials, to Greater Philadelphia, Dara Woerdeman landed in a spot with a lot of talent, energy and unmet needs in green packaging. 

She also found a lot of people willing to share advice near her home in Merion Station, where affluent Main Liners with varied start-up experiences are in steady supply.
For Woerdeman, that's a huge bonus, considering she and her team of three have their hands full working out of the University City Science Center in Philadelphia. She just received a $500,000 grant from the National Science Foundation for her environmentally friendly process of converting plant proteins into biodegradable plastics. Practical applications range from product packaging like containers and microwavable meal trays to tableware and toys.

“There are a number of possible ways, so we have to consider the costs and how we’re able to implement on existing technology and equipment,” says Woerdeman. “It will depend on who the customer is and what kind of equipment is available.

“We’re carefully tailoring our solutions to meet customers’ needs.”

Woerdeman's background is in polymers and composites and she's worked in numerous laboratories in the U.S. and abroad (Belgium). Her multi-disciplinary experience is key to bringing greener technology to industry's packaging needs.

Woerdeman has also received funding from Ben Franklin Technology Partners through her work with Philadelphia University and its Engineering Design Institute.

"I like slow, hands-on growth, but in the short-term, we want to file as many patent applications as we can and that can be very costly, so angel investors is what I'm looking for right now," says Woerdeman.

Source: Dara Woerdeman, R&D Green Materials.
Writer: Joe Petrucci




Murata Business Center connecting entrepreneurs with incubator, resources

In a state full of quality business incubators and economic developers, the Murata Business Center, tucked away in Carlisle, has emerged this year as one of the most decorated.

Last month, Murata earned Program of the Year honors during the Pennsylvania Economic Developers Association fall luncheon. Murata was recognized for its ongoing work that includes seven incubated companies that are still in business and nine current tenants in its incubator that employ close to 80 workers and generate $7 million in revenue.

Over the summer, Murata took home a national honor as the National Business Incubator Association awarded it the NBIA Soft Landings International Incubator designation. Murata offers a full slate of business services for nondomestic firms that have helped them enter the U.S. market, like WebpageFX, which came to South Central PA from Germany.

For Murata, success has been achieved simply by connecting a bevy of resources for local entrepreneurs. 

 “We’re trying to connect in a lot of different ways,” says Karen Gunnison, an attorney who represented many area businesses and joined Murata as executive director two years ago. “We’re on Twitter, and I’ve actually met live people that way.”

Murata is located in a Keystone Innovation Zone as well as a Technology Corridor Enterprise Zone, and both state programs provide tax credits and financing assistance. Its Dream It, Do It programs have been popular. The informal program spotlights successful start-ups and resources available to those gearing up for their new business venture and will be held 5:30-7:30 p.m. on Nov. 18 in Shippensburg at the Market Cross Pub and on Nov. 23 in Harrisburg at the Appalachian Brewery.

Source: Karen Gunnison, Murata Business Center
Writer: Joe Petrucci

Career GPS helps Greater Philadelphia biopharma workers navigate region

The life sciences sector in Greater Philadelphia is using a decidedly green approach in "recycling" a large segment of its employee base. Three very active and visible organizations, the University City Science Center, Wharton Small Business Development Center, and BioAdvance, recently teamed up to help displaced biopharmaceutical professionals navigate the region's entrepreneurial career eco-system.

That help comes in the form of Career GPS, which targets life sciences company managers and above and assists them in navigating opportunities within the region's new and emerging ventures.

"As the recent Milken Institute study of life sciences in our region noted, Greater Philadelphia is in a unique position to redeploy displaced executives into emerging biosciences companies and new ventures and harness the region's world-class talent to create an unparalleled global hub for new life sciences companies," says BioAdvance CEO Barbara S. Schillberg.

Career GPS, funded in part by the Delaware Valley Innovation Network, will be held on Friday, Nov. 20 at the Wharton School of University of Pennsylvania's Huntsman Hall. The program will provide attendees with education and resources related to a variety of career and transition options and will highlight opportunities ranging from entrepreneurship to emerging needs within the sector.  A panel of life sciences business professionals will also discuss skills in demand for the fast-moving entrepreneurial set.

The three sponsoring organizations will sponsor a second program, Career On-Ramp, in the first quarter of 2010. That program will target prospective entrepreneurs who already have intellectual property.

"Nurturing the next generation of life sciences entrepreneurs  and start-ups is central to the Wharton SBDC mission," says Therese Flaherty, Wharton SBDC director.

Sources: Barbara S. Schillberg, BioAdvance; Therese Flaherty, Wharton SBDC. 
Writer: Joe Petrucci




Angel investors say Pittsburgh market still strong

Back in June, the Angel Capital Association asked its members whether the recession would help or hinder future deals. Seventy percent of angel groups said the quantity and quality of 2009 investment opportunities will maintain or increase over 2008 levels. That appears to be true in southwestern Pennsylvania, says Catherine Mott, founder of the Blue Tree Capital Group and Blue Tree Allied Angels.

Mott says that high-tech start-ups, here as elsewhere, are providing high-quality deals. "That over 90 percent of the companies we see are high tech is proof of the level of interest, optimism, and support for that sector in greater Pittsburgh," says Mott.

The angel investor network, advised and managed by Blue Tree Capital, provides fledgling firms with between $200,000 and $5 million in early "gap" funding en route to serious venture capital. The group invests in early-stage companies located primarily in Pennsylvania and Ohio.  Of 22 start-ups funded since 2003, Mott says that 18 are still thriving; one has made "a profitable exit" to venture capital and two failed early. Eighty-nine percent of the network's portfolio is in high tech.

"This is definitely a national trend," says Mott, noting that the number of angel investor networks has tripled since Blue Tree was launched. "It's a macro-economic thing. We've changed from an industrial society to an information society to an innovation society. The growth is there because there's a market opportunity."

Source: Catherine Mott, Blue Tree Capital
Writer: Chris O'Toole



 


Bryn Mawr's Treventis tackles Alzheimer's from multiple angles

Treventis Corporation, an early stage life sciences company focused on treating Alzheimer's disease, has taken a new approach to a problem that impacts more than 25 million people and their caregivers worldwide. Recent funding has validated their approach, which is as simple as looking at more than one root cause.

In a lab in Nova Scotia, the Bryn Mawr-based company is examining multiple proteins that could go awry and begin its assault on brain tissue. Under the leadership of chief scientific officer William Wong, Treventis has also developed a proprietary, computer-based 3D discovery platform that enables the pursuit of multiple lead compounds.

"I think the neurology community is beginning to realize Alzheimer's is a multi-factorial disease," says CEO Bill McIntosh. "The proteins in a normal state are fine, but what happens is they tend to aggregate, so you'll have one individual piece that gloms onto a second one, and a third and a fourth and you end up with plaques called Lowey bodies.

"It's like a lock and key. We've put these compounds into the lock and see if it opens. If it does, we know the compound will stop the aggregation."

Working out of Wong's finished basement for now, McIntosh says the company, which has assembled an impressive team and maintains its full lab set-up in Canada, is about 18 months away from significant expansion. That did not stop BioAdvance, the Biotechnology Greenhouse of Southeastern PA, from making a $550,000 seed-stage investment in Treventis this summer.

"It's a huge step for us, really a major milestone," says McIntosh. "Here's an organization that has sort of taken us through the ringer in terms of due diligence and at the end of the day they were sold on our science and management. It offers great validation."

The funds should push the company through proof of efficacy in an animal model of Alzheimer's, the next key milestone. That would allow Treventis to pursue a significant round of venture financing, considering big pharma's interest in Alzheimer's and the painful physical and emotional toll it takes on patients and their families.

Source: Bill McIntosh, Treventis
Writer: Joe Petrucci



NEPA Venture Partnership pushing entrepreneurship

It took two decades and the crumbling of much of the region's industrial roots, but finally, the pieces are in place throughout Northeast Pennsylvania to stimulate new and diverse economic growth through entrepreneurship in the region's strongholds of Scranton, Wilkes-Barre and Hazleton.

Those pieces have come together to form the NEPA Venture Partnership, which hopes to officially launch next month as a comprehensive toolbox for entrepreneurs and early stage companies throughout the region, state and country.

Bernadette DeBias of economic development organization Hazleton CAN DO, part of the partnership along with the Innovation Center of Wilkes-Barre and the Scranton and Lackawanna Industrial Building Company, says she has received calls from as far away as California expressing interest in the region.

"The resources we've lined up, beyond investments, support entrepreneurs at their most vulnerable stage," says DeBias, "and they'll go where the money is." DeBias also noted that, although the much of the industry that once defined NEPA is gone, its trademark work ethic remains.

The partnership, along with Ben Franklin Technology Partners and about 50 private investors, contributed a combined $4 million to the Mid-Atlantic Angel Group's second early stage venture fund (MAG II), which will invest in Pa.-based companies as well as those outside the region.

Beyond funding, however, the goal of the partnership is to be a one-stop shop for entrepreneurs--it already has a website and is finalizing its marketing strategy along with plans for upcoming events, including Ben Franklin Venture Idol, a entrepreneur's version of American Idol, on Nov. 5 in Scranton.

"It can be a daunting task for entrpreneurs," says John Augustine of the Innovation Center. "It's really just knowing where to go."

In addition, NEPA Venture Partnership will host MAG II's monthly meeting, a forum to educate potential investors in the region, on Nov. 4 in Scranton.

Says Christine Hitchcock of SLIPCO: "One of the keys is a synergistic approach, with no duplication of effort, and we have it."

Source: John Augustine, Innovation Center of Wilkes-Barre; Bernadette DeBias, Hazleton CanDO; Christine Hitchcock, SLIPCO.
Writer: Joe Petrucci

Carlisle's Hanson Technologies wins food safety patent

As food safety concerns rise, American produce suppliers are racing to reassure consumers that their fruits and veggies are clean, as well as fresh--free from contaminants like E. coli and salmonella. Carlisle-based Hanson Technologies is betting that its newly patented technology, OmniFresh, provides the solution.

The technology quickly and reliably isolates micro-organisms in the wash water of  food processing plants. The company says the process is more than 99 percent effective at finding micro-organisms in about two hours, compared to conventional methods that take longer and find fewer bugs.

"It’s designed to be a key component in wash systems, but it is applicable to beverages and other liquids too," says company founder William Hanson.

His firm obtained the patent for the technology after a pilot project at Verdelli Farms in Dauphin County (which was later purchased  by a subsidiary of Chiquita Brands International). The company has signed up with Cygnus Manufacturing Company of Saxonburg, Butler County, to manufacture the system devices.

“We’re in the processing of seeking investment,” says Hanson of his five-person firm.   

Source: William Hanson, Hanson Technologies
Writer: Chris O’Toole


University City Science Center impact measured at $9B

In times like these, it's organizations like the University City Science Center that not only keeps economies afloat, but positions them to exceed expectations. A study prepared by the Economy League of Greater Philadelphia with assistance from Select Greater Philadelphia and released this week reveals what many people have long known--the Science Center has had a tremendous impact on Greater Philadelphia's high-tech sector and the region's future.

The study shows the Science Center, founded in 1963 and headquartered in Philadelphia, contributing $9.4 billion annually to the regional economy, and its incubators have created more than 15,000 jobs that remain in Greater Philadelphia.

“The impacts identified in this study provide further evidence of how Greater Philadelphia’s innovative capacity and strong high-tech collaborations have contributed to the area’s economic vitality," says Tom Morr, President and CEO of Select Greater Philadelphia.

"Organizations like the Science Center have helped the region outperform the U.S. economy as a whole in these troubled economic times.”

Of the 350-plus companies that graduated from the center's incubators, 93 remain in the region, paying an average salary of $89,000.  Overall, graduate and resident incubator companies generate more than 40,000 regional jobs and contribute $22 million in wage taxes to the City of Philadelphia.

The Science Center is the largest urban research park in the country, bringing together innovations, scientists, entrepreneurs, funding, laboratory facilities and business services.

Source: Tom Morr, Select Greater Philadelphia
Writer: Joe Petrucci


State of Dauphin County reveals survival, potential

When Dauphin County Commissioner Nick DiFrancesco delivers the state of the country address today, he'll be talking from the heart. DiFrancesco, a lifelong Dauphin County resident except for his time pursuing his undergraduate degree at Penn State University, has a personal attachment to the area and knows all too well its challenges.

That said, he's quite optimistic about Dauphin County, which relies on the state capital and other large institutions, like Hershey Foods, and has fared better than most against the recession, according to DiFrancesco.

"There's a lot of projects moving forward. Whether we have critical mass is yet to be seen," says DiFrancesco. "The market alone isn't enough. I see a lot of people coming from the outside area bringing new ideas, but not so much from within."

DiFrancesco sees the region as attractive to businesses looking to relocate with its trained workforce, low cost of living, and quality of life. He credits the Harrisburg Young Professionals group with being a stabilizing and active force for the region's growing number of under-40 workers, organizing mayoral debates, kickball leagues and community service projects. The development of science and technology through Harrisburg University, Hershey Medical Center, and the Hershey Center for Applied Research, for example, is diversifying the region's capabilities.

DiFrancesco has been vocal about changing the culture of education to include more entrepreneurial curriculum and thinks that can contribute to the region's future success, and also sees a need for increased efforts to draw venture capital to the region.

"There's no reason in this economy that someone coming out of high school or technical school or is early in their career shouldn't be considering starting a business," he says.

Source: Nick DiFrancesco, Dauphin County Commissioners

Writer: Joe Petrucci


Scranton incubator powers entrepreneurs

Scranton Enterprise Center director Kristine Augustine spends a lot of time with people hoping to open a small deli, coffee shop or other typical mom-and-pop operations.  Unlike many incubators focused on high-tech or cutting edge outfits, Augustine's job in the Electric City, where so many people have worked hard for one company their entire lives, is to promote a cultural of entrepreneurism that was lacking and is now sorely needed.

Augustine points to IMS, a telemarketing company started by two young men in 2003 that eventually expanded to three locations in the region before being sold. Those two caught the bug, however, and now own a Sonic franchise in nearby Wilkes-Barre.

"When we talk about serial entrepreneurs, IMS may not have been a sexy tech company, but it still employed over 50 people and grew from there," says Augustine, in her 11th year with the Greater Scranton Chamber of Commerce, which administers the incubator.

The incubator has its share of sexy companies, though, and has run at near 100-percent capacity for several years now. It boasts software developers, healthcare companies, a venture capital firm, an organic product manufacturer, and other business services providers. That diversity is key to the city, as well, Augustine says.

Most encouraging is the number of referrals and inquiries for the incubator's programs has remained brisk throughout the recession and applications for its funding program for those who can't apply for traditional financing has doubled in the last 12 months.

"Most of our companies are doing well," says Augustine. "I've seen the growth take place step-by-step."

Source: Kristine Augustine, Scranton Enterprise Center
Writer: Joe Petrucci

State treasury helps women in business find money

The Women and Money Project isn't window-dressing for the PA Treasury Department. It's a program near and dear to those involved in implementing it and has considerable credibility as a result. Most important, it's helping Pennsylvania women position themselves for stimulus funds and other opportunities in the new economy.

State treasurer Rob McCord was raised by a single mother who worked hard to make ends meet. Dr. Eliazabeth Randol, the director of the Women and Money project, was the director of the University of Scranton women's center before becoming a campaign manager and chief of staff for a Lackawanna County commissioner.

"We do have intellectual capital to unleash," says Randol, who is traveling around the state speaking to women business owners and entrepreneurs. At her first stop in Scranton two weeks ago, Randol focused on pursuing stimulus funds and government procurement.

That included getting certified as Women's Business Enterprise and placed on the federal Central Contractor Registration list. The program was built in part upon Randol's research, which included more than 100 phone calls with women in business.

"I heard over and over how ignored these women business owners feel as far as their ability to get into the boys club, in particular as far as contracting goes," Randol says. "They can't get a phone call back, can't get in the door."

Randol is quick to point out the goal for federal procurement with women-owned businesses is 5.0 percent, and the most recent estimates put that percentage woefully short at 3.4 percent.

"For a long time, many women have thought about starting their own business, but there's a lot of creative energy that will continue to be unleashed as people are getting laid off and have to figure out where their income is coming from," says Randol, who will be in York on Oct. 20 and Philadelphia on Oct. 22 for the next workshops. "I think women have a good ability to identify needs in a community and come up with creative solutions."

Source: Dr. Elizabeth Randol, PA Treasury Department

Writer: Joe Petrucci


Barbara Kasoff, President, CEO and Co-Founder, Women Impacting Public Policy

Elizabeth Randol, Director, Treasury Women & Money Project

Rob McCord, Pennsylvania Treasurer

Kristin Dempsey, Vice President, Dempsey Uniform and Linen Supply





Seed funding the focus of national study led by Temple professor

While angel investors and the venture capital sector are tightly wound, organized and highly identifiable, seed funding is viewed as the Jan Brady of business investment.

It's why the Philadelphia-based National Association of Seed and Venture Funding (NASVF) has hooked up with Temple University's Fox School of Business to study seed funding--typically funds from family, friends or others used to pay for a start-up's preliminary expenses like market research and product development--and professor of strategic management Raj Chaganti has plenty of questions he'd like to see answered.

"We're trying to fill a void here," says Chaganti, who has been at Temple since 1981. "There's a big black hole here and nobody's been able to put a spotlight on it. There are lots of associations around venture and angel capital, but seed capital is like a middle child, much neglected."

Chaganti points out that while VC and angel investors are highly concentrated in certain geographies, seed investors are more scattered and there's no sizable database. Also, a lack of regular data reporting has created a dearth of projections in the seed funding market. Information from six months prior, Chaganti says, isn't very helpful.

"We need to provide a signal on a quarterly or semiannual basis so people can seek out the supply," he says.

The deadline for the study's first round of surveys is next week and findings will be presented on Sept. 14-16 in Oklahoma City at the NASVF's annual conference. Chaganti plans on surveying NASVF members, among other seed investors, on a quarterly basis.

Source: Raj Chaganti, Temple University's Fox School of Business

Writer: Joe Petrucci


UC Science Center keeps 40 jobs in Philadelphia in new building

The University City Science Center, the first and largest urban research park in the country, has grown alongside the companies it has nurtured since 1963. Good thing, too, as those companies are needing more and more space.

Avid Radiopharmaceuticals and AlumiFuel Power have moved from the center's Port Business Incubator to its new 155,000 square foot building at 3711 Market Street. As a result, forty high-paying life sciences and alternative energy jobs are staying in West Philadelphia as the two companies remain along the Avenue of Technology.

Avid's move into 16,000 square feet of custom-fitted office and lab space comes just four years after it spun out of the University of Pennsylvania. Avid, which develops molecular imaging agents that aid in detection of diseases like Alzheimer's and Parkinson's, employs 37 and in May completed the first closing of a $34.5 million Series D financing.

AlumiFuel, which employs six, is an alternative energy company that generates hydrogen gas and steam for multiple niche applications.

"Government investment in the life sciences and energy technology sectors--and the Science Center in particular--is paying off," says Science Center president and CEO Stephen S. Tang.

The Science Center, which moved its headquarters into the new building last September, accelerates technology commercialization, regional economic development, and market availability of life-enhancing scientific breakthroughs and has created more than 15,000 jobs in Greater Philadelphia. The Science Center also launched a regional business calendar this week on its website. The calendar will include events from more than 200 organizations in the region.

Source: Stephen S. Tang, University City Science Center

Writer: Joe Petrucci






Ben Franklin's Rosenthal honored as Champion of Small Business

Capital, innovation and entrepreneurship. They are, admittedly, the three elements that drive RoseAnn Rosenthal, president and CEO of Ben Franklin Technology Partners of Southeastern Pennsylvania. Similarly, those qualities drive many of those involved in small business. That's a big reason why Rosenthal was honored with a Champion of Small Business Award from the National Coalition for Capital at a ceremony late last month in Philadelphia.

BFTP-SEP, which has provided more than $130 million to 1,600 regional enterprises  and stimulates economic development in the region's technology sector,  is even more valuable to the regional economy during the lingering recession. Rosenthal, however, is equally impressed by the companies in which she helps invest.

"They are stubborn, determined and they're focused, that's what I admire about them," Rosenthal says. "They keep at it."

Rosenthal says BFTP is focused on moving forward with the region's energy strategy and building a partnership between universities and industry that will compete for federal dollars. That includes outlining the partnership for a new Energy Commercialization Institute (ECI) in Greater Philadelphia. It will be based on the eight year-old  Nanotechnology Institute, a state-funded partnership between BFTP, Penn and Drexel that improves technology transfer and commercialization capability.

Penn State, Villanova, Temple,Widener and Philadelphia University are expected to join Drexel and Penn as part of the ECI, which should get underway next month.

"Some of the needs and opportunities of the sector will impact the ECI model," Rosenthal says. "As we begin to wade out into the water we'll see where we need to change."

Source: RoseAnn Rosenthal, Ben Franklin Technology Partners of Southeastern Pennsylvania
Writer: Joe Petrucci

ProtonMedia secures $2.5M to advance social collaboration platform

It doesn't take Ron Burns, CEO and founder of ProtonMedia in Lansdale, to start talking about the "death of distance," a concept academics have debated for more than a decade. In that death, ProtonMedia has discovered life in a virtual world, one that it is touting as a "tool in large corporations' efficiency closet."

The company recently announced completion of a $2.5 million round of Series A venture financing. The funds will accelerate research and development of ProtonMedia's signature product, ProtoSphere 2.0, billed as a second-generation social collaboration platform for online teaming.

"It's more about moving beyond a timed event to an always-on network," says Burns, who founded ProtonMedia in 1999 as an e-learning shop for the healthcare industry. Seeing its model as content-heavy, the company looked to add context to learning and began developing ProtoSphere in 2005, blending a 3D virtual environment, complete with avatars and user profiles, with a live cam and allowing users to "teleport" to different locations like classrooms, meeting rooms, or offices.

An impressive list of clients have bought into ProtonMedia's online teaming platform, like Comcast, GlaxoSmithKline, Johnson & Johnson, Chevron and Cisco. The company recently did a project for British Petroleum that was studied by MIT.

Originate Ventures of Bethlehem and Osage Partners of Bala Cynwyd provided a large chunk of capital in this round for a company that doubled its revenue during a global recession. Burns says ProtonMedia has been successful because it helps reduce travel costs and increase efficiencies, and going forward will focus on team-building.

"People learn in different ways and we want to create a tool flexible enough to give people the right to collaborate the way they feel," he says.

Source: Ron Burns, ProtonMedia

Writer: Joe Petrucci

Steve Forbes to keynote 3 Rivers Venture Fair

Steve Forbes, chairman and CEO of Forbes Media, will deliver the keynote address at the 3 Rivers Venture Fair in Pittsburgh on Sept. 16.     

For the first time in its seven-year history, 3 Rivers Venture Fair is reporting more medical device firms than IT companies at its next showcase of breakthrough innovations in technology, life sciences and energy, to be held September 15-16 at PNC Park in Pittsburgh. Since its founding in 2002, the 3 Rivers Venture Fair says it has helped participating ventures raise more than $292 million in investment capital.

With 70 sponsors including the Pennsylvania Department of Community and Economic Development, the fair is held every 18 months. Among the 30 companies making presentations to venture capital firms, private investors and business leaders are 17 Pennsylvania companies and 10 from Ohio.

"At our first fair, in 2002, we had 375 attendees," says the fair's Kelly Szejko. "It's grown steadily, but we keep registration under 600 total to promote a relaxed, informal feel."

Registration is $499 until August 7 and $599 thereafter.

Source: Kelly Szejko
Writer: Chris O’Toole

Southeast PA doctor fronts new life sciences private equity firm

Upon first glance, it would appear the trio of health care executives who started the life sciences private equity firm Blood, Sweat and Capital, are fans of jazz-rock stalwarts Blood, Sweat and Tears. But the story behind the firm's whimsical name is actually much simpler. They held a contest among friends and colleagues last year and weren't quite sure where they'd land.

"I think there's something in a name, and our first news release attracted a ton of attention," says Dan Lyons, one of the principals who grew up in Bucks County, practiced medicine at Reading Hospital, and currently sits on the Board of Trustees for the Temple University School of Medicine.

Equally attractive is BSC's potential in the near future. With health care reform--in some measure--on the horizon and an increased focus on operations and cost-savings during the recession, BSC is steering clear of drugs and devices. Instead, the firm, which boasts 70 years of health care executive experience between its founders, will target start-ups specializing in health care service provisions and technology that supports health care reform.

"We think there's a going to be a lot of companies coming forward that are going to make health care more efficient, personalize it and make it better," says Lyons.

BSC will probably be headquartered in Fort Worth, TX, but because of the huge life sciences presence in Greater Philadelphia, Lyons expects a significant amount of activity for BCS in Pennsylvania. Already, about 25 percent of the business plans he's reviewing are from the Keystone State. Lyons says BSC's goal is to have close to dozen successful small- to mid-size companies in its portfolio by 2013.

Source: Dan Lyons, Blood, Sweat and Capital
Writer: Joe Petrucci


PA named third in nation for green jobs

The green workforce is still in its infancy, but Pennsylvania has already hit its growth spurt, and many believe it could last for decades. Pennsylvania ranked third, behind only California and Texas, in clean energy jobs according to a Pew Charitable Trusts report issued last week. The Clean Energy Economy: Repowering Jobs, Businesses and Investments Across America, the first count of such jobs in all 50 states, credited Pennsylvania with 38,763 green jobs in 2007.

"These clean energy giants and startups are here in Pennsylvania because of our robust policies and programs that are helping build our green energy economy," says Jan Jarrett, CEO of PennFuture, a Harrisburg-based public interest organization that has successfully advocated for landmark environmental legislation. "You ain't seen nothing yet."

Governor Ed Rendell has mandated 18 percent of the state's utilities come from alternative energy sources by 2021. That has paved the way for green job growth through both large companies setting up shop here and increased funding for emerging local companies.

Spanish wind energy giants like Gamesa and Iberdrola have created hundreds of jobs in PA, and in the last 10 years, the state has become home to 11 operating wind farms with four more under construction and 13 more proposed. 

International solar powerhouse Conergy is teaming up with Epuron and Exelon to build one of the nation's largest solar power plants, while other smaller plants like Solar Power Industries in Westmoreland County, Polysilicon Corp. in Fairless Hills and Plextronics in Pittsburgh are taking off.

"With the (electric utilities) rate caps due to come off, and with federal stimulus money now coming in, we expect exponential growth in clean and green energy," says Jarrett.

Source: Jan Jarrett, PennFuture
Writer: Joe Petrucci










Narberth-based EyeIC's MatchedFlicker technology will help eye doctors see clearly in glaucoma cases

EyeIC, a small startup based in the Philadelphia suburb of Narberth, has big ambitions with its patented MatchedFlicker technology, a specialized software tool that animates two retinal images taken at different times from the same patient so eye doctors can see and document any changes.
 
The technology could be a giant leap forward in glaucoma monitoring. Currently, the primary method of tracking the advent and development of glaucoma is to have trained experts compare separate pairs of stereo photos side by side--a time-consuming process that makes it difficult to find and document changes between images.
 
But MatchedFlicker employs a process similar to flicker chronoscopy, which has been used in astronomy since the 1920s, whereby two photos are exactly matched and then animated so that any changes appear as motion. EyeIC has found a way to apply this process to retinal images.
 
"Retinal photographs are feature poor, so they are hard to match," explains EyeIC CEO Ira Wallace. "But we've found an algorithm that will match them very well and very accurately."
 
With MatchedFlicker, eye doctors can also takes notes and document changes directly on the images, save them and send them to colleagues.
 
Last month, EyeIC received clearance from the FDA to market the software and plans to begin selling it to U.S. doctors in July with a European launch planned for this fall.
 
The company, founded in 2004, completed a $1.9 million funding round last November from MentorTech Ventures, Ben Franklin Technology Partners and private investors.
 
EyeIC expects to have a commercial product that fully integrates into the current workflow of an eye doctor's office by July. The company, which currently employs five people, is planning to expand and could double its number of employees in the next 12 to 18 months, according to Wallace.
 
Source: Ira Wallace, CEO of EyeIC
Writer: John Davidson
 
To receive Keystone Edge free every week, click here.


Alternative agriculture goes 2.0 with conference for innovators and investors

Alternative agriculture is going Wall Street thanks to a multi-national cottage industry with significant operations in Pennsylvania. SPIN-Farming, based in Philadelphia and Saskatoon, Saskatchewan is joining forces with NewSeed Advisors to co-host Agriculture 2.0, The Conference for Innovators and Investors on September 17 in New York City. The goal is to introduce the cream of the alternative agriculture entrepreneurial crop to the investment community.

"Entrepreneurs are producing breakthrough technologies that can help create a post-industrial food system that is less resource intensive, more locally based and easier to monitor and control," says SPIN-Farming's Roxanne Christensen.

Because sustainable agriculture has mostly shunned technology and treated profitability as an afterthought, its appeal to commercial investors has been limited. The sector has been viewed as marginal, at best.

"To infuse the sustainable agriculture industry with much-needed capital and clout, we need to demonstrate that it can be profitable," she says.

If anyone knows about that profitability, it's Christensen. SPIN-Farming publishes online farming and gardening learning series and conducts workshops in partnership with leading farming, gardening, environmental and investment organizations.

The conference will be a good first step in exposing alternative agriculture's potential--through real economics and commercial prospects--to the mainstream financial community. Co-host NewSeed invests in and advises sustainable agriculture companies. Topics to be covered at the conference include sustainable and controlled climate growing systems, building integrated agriculture and urban agriculture.

"This conference will introduce entrepreneurs to investors and open the doors to collaboration, capital and long-term success," says Christensen.

Source: Roxanne Christensen, SPIN-Farming
Writer: Joe Petrucci


GoodCompany launches sustainable business incubator at Philadelphia Navy Yard

Ten promising companies will be setting up shop at a "green business incubator" in Philadelphia's Navy Yard this summer in hopes of attracting investors with the help of GoodCompany Ventures.
 
The incubator, which launched Monday at a "virtual ribbon-cutting" ceremony that included Philadelphia Mayor Michael Nutter and former president of Ben & Jerry's Ice Cream Chuck Lacy, will function like a workshop and provide participating companies access to infrastructure, advisors, and capital.
 
At the end of the summer, the program will culminate in a "funding day," at which the ten companies will have a chance to makes theirs pitches to representatives from leading VC firms and angel investors.
 
GoodCompany, the VC group behind the program, aims to work with entrepreneurs and startup, for-profit companies committed both to sustainability and social impact. Hosting the incubator program at Navy Yard is part of GoodCompany's goal of creating a community of social entrepreneurship.
 
"Considering the current economic climate, including the fall of iconic companies like GM, there is no question that it is time to start doing business differently," says Jacob Gray, co-founder of GoodCompany. "Truly sustainable economic development creates both growth and addresses the environment, education, healthcare and other big unsolved issues of our time. Our immodest goal at GoodCompany Ventures is to launch Philadelphia into the lead as a center for sustainable business."
 
The program's ten businesses represent a wide range of industries and regions, including Philadelphia, Delaware, New York, Western India and Western Pennsylvania. The businesses range from BlackGold Biofuels (formerly Philadelphia Fry-O-Diesel), which has developed a way to change trapgrease into clean-burning biodiesel, to BLOX, a partnership between Onion Flats, and Landmark Building Systems Inc. to build modular, mixed-use, ultra-green buildings, to CalendarFly, a website that updates parents' calendars with their children's activities and school assignments.
 
Source: GoodCompany Ventures, City of Philadelphia
Writer: John Davidson
 
To receive Keystone Edge free every week, click here.

Pittsburgh's Technology Collaborative funds nine companies $1.5M

The Technology Collaborative, the Pittsburgh-based economic development organization that supports the growth of world-class robotics, cyber-security and digital technology, has awarded $1.5 million to nine companies and one Carnegie Mellon University project.

Eight are Pittsburgh-based and two are Philadelphia-based companies. All the projects are underway and will be completed by 2010.

Continue reading this article on Pop City.

Entrepreneurs sweat for success at DreamIt Ventures' boot camp

DreamIt Ventures doesn't refer to its entrepreneurs training program as a boot camp because it's particularly intense or physically taxing. But the boot camp, which began last week, at the early-stage investor's home inside the University City Science Center in Philadelphia, does benefit from a communal atmosphere.

"The effect of having the companies all in the same open space versus if they were just working by themselves is like working out at the gym versus working out at home," says Steve Barsh, one of DreamIt's managing partner. "They work harder and focus more when they're in the DreamIt gym."

This "gym" pays "members"--qualified applicants with a bright idea that can be developed in three months--$30,000 for five representatives. It's basically a living stipend for three months that allows participants to focus full force on their idea. Companies also get free office space at the Science Center, a successful entrepreneur as a mentor, a top-notch speaker series, a lawyer and an accountant. 

It's the second year of the boot camp--last year, three of the boot camp's 11 participants received follow-on funding--and this summer the program is more structured around having companies focused on de-risking their ideas and understanding the fundable milestones they need to achieve. One of this year's start-ups is Philadelphia-based OurShelf, a web platform that catalogs user's personal goods within a social environment that allows for borrowing and lending.

OurShelf has already done a 180-degree turn from its original pitch to DreamIt, which focused on vast consumer facing revenue streams. Now, the company is focused more on business-to-business applications.

"The whole point of being here is to focus the vision, grow and mature rapidly, build up our abilities, make connections, achieve something great, and have loads of fun while doing it," says Paul deGrandis of OurShelf. "The resources here are really endless.

Source: Steve Barsh, DreamIt Ventures and Paul deGrandis, OurShelf
Writer: Joe Petrucci

To receive Keystone Edge free every week, click here.




Sanovia Corporation to use $8M in venture funding to develop pharmaceutical offerings

Sanovia Coporation, which delivers savings in pharmaceutical spending through automated decision-making technology, isn't owned by any pharmacy benefit manager, health plan or pharmaceutical manufacturer. And yet the Philadelphia-based company continues to attract attention of venture funders.

Chrysalis Ventures, a leading source of equity capital for young growth companies in the Midwest and South, led Series C financing totaling $8 million that also included Sanovia's existing investors, HLM Venture Partners of Boston and Claritas Capital of Nashville.

"Sanovia's best of breed technology provides a powerful means for payers to bring accuracy, efficiency, and quality to the task of controlling pharmaceutical costs, making it a strong fit for our portfolio," says David A. Jones Jr., Managing Director of Chrysalis who joined Sanovia's board of directors.

Founded in 2003 by a group of pharmacists and IT professionals, Sanovia has about two dozen clients like Blue Cross Blue Shield plans, large national and regional managed care plans and Medicare plans. Sanovia's flagship product, PA-Logic, fully automates prior authorization--when physicians receive approval from a patient's health plan to prescribe a medication--which improves efficiency, turnaround times on prior authorization requests, and appropriateness and quality of therapy.

Sanovia plans to use the funds to expand its state-of-the-art decision technology into additional areas of clinical patient management, roll out its web portal capability, enhance its fraud and abuse and medication therapy management products and develop partnerships with providers of complementary products.

"Our clinical decision-making tools not only automate workflows but also automate and simplify the increasingly complex evidence-based clinical guidelines," says Robert Tremain, President and CEO of Sanovia.


Source: Robert Tremain, Sanovia; David A. Jones Jr., Chrysalis Ventures.
Writer: Joe Petrucci


To receive Keystone Edge free every week, click here.


Investment in Quantum will bring expansion, speed commercialization of new technologies

The ideas Quantum Technology Group are developing are dynamic, like Teradyne Technologies' compact detection system that can scan for plastic explosives and diagnose skin cancer.


Commercializing such a technology, however, requires more than just research.  It's why Ben Franklin Technology Partners of Southeastern Pennsylvania recently made a significant investment in Quantum through a partnership that will target the development of strategic intellectual property created by Drexel University and other universities and scientists.


"In commercializing cutting edge technology, there is potential for a disconnect between the technology path envisioned by the scientist and the ultimate commercial need of the industry," says Lothar Budike, Quantum's founder and managing director.


With the investment, Quantum will be able to drive its first five companies, including Teradyne and ranging from next-generation solar cells to advanced microscopy and materials, to market. Budike says Quantum, founded in early 2007, will grow from three employees to 25 over the next 36 months at its operations near BFTP-SEP's primary offices in the Building 100 Innovation Center at the Philadelphia Navy Yard.


Quantum signs a commercialization agreement with a university and conducts an extensive study of their technology platforms and patent portfolios. It then benchmarks each platform into categories: Market Industry Size, Application Focus, Technology Readiness Level and Intellectual Property. Quantum assesses them and chooses which platforms are ripe for commercialization with commercial sponsors or government programs.


Quantum also has a team of about 60 well-recognized scientists throughout the country it leans on to assess technology challenges in the development effort.


"It mitigates the risk for investors," Budike says.


Source: Lothar Budike, Quantum Technology Group

Writer: Joe Petrucci
 
To receive Keystone Edge free every week, click here.


Life sciences cluster study initiated by Philadelphia region leaders

A 2005 study of the Greater Philadelphia life sciences cluster found the sector accounted for more than 11 percent of employment and nearly 13 percent of total earnings in the region. Measuring that strong base, which ranked third among benchmarked metropolitan regions nationwide behind Boston and Greater San Francisco, is crucial to planning for the future.


That sentiment is so strong throughout the region that several organizations that support Greater Philadelphia life sciences--like BioAdvance, Greater Philadelphia Life Sciences Congress, Pennsylvania Bio, and Select Greater Philadelphia--are collaborating to sponsor a new research study of the region's cluster. The study, performed by The Milken Institute, will be presented at the 2009 BIO International Convention on May 19.


More than assessing Greater Philadelphia's position in the life sciences industry and the cluster's impact on the region, this year's study will serve as a framework for an overall regional strategy in the sector, which has created thousands of jobs and contributed billions to the tax base.


The study promises to identify industry strengths and specializations, identify industry assets,  and assess the growth of life sciences establishments. The study will also look at the role of entrepreneurship, new businesses and corporate giving programs within the sector.


"Spanning from its world-renowned academic research institutions to its successful global life science companies, the region is delivering on the promise of improving human health from scientific discovery to commercialization," says Tom Morr, President and CEO of Select Greater Philadelphia, a private, non-profit economic development marketing organization.


Source: Tom Morr, Select Greater Philadelphia
Writer: Joe Petrucci


To receive Keystone Edge free every week, click here





University City Science Center launches proof-of-concept funding program

In October of 2007, the CEO Council for Growth's study to identify opportunities to connect universities with industry for regional economic development cited a funding gap between research grants and seed money in life sciences technology.

Earlier this month, the University City Science Center in Philadelphia took a step in bridging that gap when it announced a program to support proof-of-concept research projects related to life sciences technologies with high commercial potential in the healthcare industry. Researchers at selected academic institutions in the Greater Philadelphia region have been invited to apply for up to $200,000 in funding for projects to be completed over a 12-month period.

The center expects all 10 institutions, which include Drexel, Temple, Penn, Thomas Jefferson University and University of the Sciences, to submit applications. Selected proposers will be invited to submit a full application, and three will be awarded $200,000 in funding sometime this summer.

"Our region has enormous breadth and depth of life science technology. However, we're not meeting our potential when it comes to commercializing these technologies," says Stephen S. Tang, President and CEO of University City Science Center.

The program will integrate four elements that the center deems critical to successfully and efficiently performing early-stage proof-of-concept technology assessments: grant funding, business advice, market drivers and guidance to exit. The hope is to focus existing regional resources to eliminate business risk in early-stage life science research and development projects and to attract follow-up investment.

"It's a coordinated effort to help demonstrate technology potential earlier in the R&D cycle," says Tang.

Source: Stephen S. Tang, University City Science Center
Writer: Joe Petrucci

To receive Keystone Edge free every week, click here.


MD Becker Partners brings together biotech players for roundtable

A simple task like returning a phone call in a timely manner shouldn't be an issue for a life sciences company dealing with complexities such as clinical trials, drug research, or licensing transactions. But Michael D. Becker sees it all the time, and the former biotech CEO has seen it negatively impact a company's ability to access capital or achieve a fair valuation.

"While effective communication is always important, it becomes even more valuable during periods of volatility," says Becker, founder and President/CEO of MD Becker Partners, LLC, a boutique management and strategy consulting firm in Newtown, Delaware County.

That's the impetus behind MD Becker's inaugural life sciences roundtable and networking event, "Successful Strategies for Raising Visibility and Capital" on May 7 in Princeton, N.J. Panelists include leading investment banks, venture groups, and media. MD Becker will also release the results of its life sciences communications survey. Early findings indicate an apparent disconnect between companies and investors in terms of ranking some of the factors it takes to successfully secure venture capital or public funding.

Becker contends that communication is the key--everything from providing information to potential investors and being responsive to media inquiries--and that many companies are lacking in that category.

Becker should know, having raised in excess of $130 million in new capital for several publicly-traded biotech companies. He started his own consulting practice in November in the hopes of showing others how to increase their visibility and unlock their value. MD Becker recently added Jeffrey Martini, Ph.D., who most recently worked with the Life Science Investment Group at Ben Franklin Technology Partners.

Source: Michael D. Becker, MD Becker Partners, LLC
Writer: Joe Petrucci

To receive Keystone Edge free every week, click here.


Ixilix among PA leaders in data backup conversion from tape to disk

The music and movie industries left their tapes in the dust long ago, but IT companies still primarily use tape for data backup instead of readily available disk-to-disk services. Bob Boyer, senior vice president of Ixilix, a Broomall-based leading provider of hosting, managed infrastructure and business continuity services, says the reason is more than analog tape's lower cost.

"Nobody wakes up and says I'm going to do this today," says Boyer. "There's an innate conservatism within IT, especially for things like data backup that aren't very sexy and don't bring in new revenue."

Ixilix, a newly launched division of Fastech Integrated Solutions, LLC, is carving out a nice little niche for itself with companies in Southeastern Pa., including software as a service outfits. If a company's tape library is older than 2 1/2 years, disk-based backup can be cheaper.

Boyer says multiple tape drives to run a tape library--most public companies keep tapes for seven years, and technology changes--can run about $150,000. Also, a company can pay up to $100,000 just to have a pick-up service that takes the tapes offsite. Boyer says this service isn't secure and tapes are too often lost in the process.

While hard disks are more expensive than tape, the technology of deduplication--or the elimination of redundant data--has also made disk-to-disk backup more cost-effective. Beyond that, Ixilix's disk-to-disk backup, conducted through a secure VPN connection, eliminates security risks like a fire or stolen equipment.

Ixilix, one-third of which is owned by New Spring Capital in Radnor, has data storage centers outside of Philadelphia in Broomall and in Reading and is planning on opening a facility outside of Pittsburgh sometime this summer.

"We're in the early stages and have had a lot of good interest," says Boyer. "People like to know where their data is and that's why we've positioned our centers where we have."

Source: Bob Boyer, Ixilix
Writer: Joe Petrucci

Philadelphia antiviral therapy maker Novira nets $550K from BioAdvance Greenhouse

BioAdvance, the Biotechnology Green House Corporation of Southeastern Pennsylvania, likes what it sees in Novira Therapeutics, and that bodes well for the emerging life sciences company in Philadelphia. BioAdvance recently announced a $550,000 seed-stage investment in Novira that will both help develop novel small molecule drugs against medically important viral targets and expand the company's management team.

"We selected Novira for investment based on the team and its novel scientific strategy, which allows a pipeline of new therapies to treat different kinds of viruses to be progressed in a capital-efficient way," says Barbara S. Schilberg, managing director and CEO of BioAdvance, which has committed $15.5 million to 25 life sciences companies and 15 pre-seed projects since 2003. Those investments have enabled its portfolio companies to leverage nearly $1 billion in subsequent capital through private equity, grants, collaborations and merger/acquisitions activity.

Novira, originally founded in 2006 as Melecmo Nanobiotechnologies in Cambridge, Mass., will be attempting to disable the ability of viral proteins to "hijack" cellular elements. Two former Merck research executives, Osvaldo Flores and George D. Hartman, have joined Novira for the task. Flores has advanced more than 10 drug candidates from target identification/validation to various stages of pre-clinical and clinical development, while Hartman is a world-renowned chemist.

Novira was also recently one of 104 recipients--out of 4,000 applicants--to be awarded a grant from the Bill and Melinda Gates Foundation to develop novel treatments for HIV.

Source: Barbara Schilberg, BioAdvance
Writer: Joe Petrucci

To receive Keystone Edge free every week, click here.


Instamed's rapid growth fuels $6 million in venture funding for Philadelphia company

Processing nearly $20 billion annually in healthcare markets, InstaMed, based in Philadelphia, has become an industry leader in payments networks and platforms. As healthcare payments shift to consumers and healthcare spending increases nationwide, that number will only grow.


It's a lot to keep up with, but the announcement last month of $6 million in funding from Osage Partners, a venture capital firm in nearby Bala Cynwyd, and Ashby Point Capital of Arnold, Md., will go a long way in allowing InstaMed to pick up even more market share.


"If we sell our services to a large health plan, I have to staff the project and get that company up and running with our system within 30 days," say Bill Marvin, President and CEO of InstaMed. "Even if you're a winning business, it helps to have additional capital to meet the demand."


InstaMed is a model of a winning business, with up to 10-15 percent month-over-month growth through 2008. It's been a challenge as much as a blessing, but the last month's infusion of funds helps, as the business' growth trajectory will likely continue.


InstaMed offers dramatic revenue, operating and convenience improvements to patients and healthcare providers, which includes health systems, community hospitals, laboratories, large group practices and solo practitioners. With the economy still struggling, hospital CFOs can't rely on dipping into investments or leaning on donors to make up for deficits. They're more likely to turn to InstaMed for its payment processing and healthcare clearinghouse functions, which come on the company's proprietary integrated platform and network.


"The economy is forcing them to focus on their core business," says Marvin. "Plus, more and more are going to electronic processing."


Source: Bill Marvin, InstaMed
Writer: Joe Petrucci

To receive Keystone Edge free every week, click here.


Pittsburgh Life Sciences Greenhouse hits $13M with nine new companies

The Pittsburgh Life Sciences Greenhouse reported thriving activity this month, hitting $13.2 million in direct investments and 57 companies that have attracted more than $400 million in additional funding to the region.

"Everywhere you look, read and listen there are warnings about the scarcity of capital and the continued downturn of the economy," notes John Manzetti, president and CEO. 

Despite the economic climate, PLSG continues to flourish with the addition of 25 investments, nine of which were in new companies, he says.

Read the full article on Pop City.

Meet the fresh crop of AlphaLab startups

Six new startups have joined AlphaLab, a software incubator on the South Side that fosters the growth of software, Internet and entertainment technology companies in the region.

Created by Innovation Works, the most active investor in seed-stage companies in Pittsburgh, AlphaLab companies participate in an intensive, 20-week program and receive a $25,000 investment, office space and business mentoring from a team of industry experts.

"Alpha Lab is a great opportunity to learn many things quickly," says Scott Connelly whose startup AJAX Street joined this cycle. "It will enable us to take a leap without feeling like we're falling. The wealth of knowledge from the advisors adds value to everything we do here."

Read the full article, including descriptions of each startup company, at Pop City.

Web startup Vuzit nabs $100K from Creative Economy Investment Fund, plans to hire

Sometimes irritation, not necessity, is the mother of invention.
 
Just ask Brent Matzelle. His Philly-based startup, Vuzit, is an online platform for viewing electronic documents and media that are not designed for online viewing--like PDF files.
 
"The genesis of the Vuzit product came out of frustration, to me, that electronic documents were never turned into an actual Web page," Matzelle says. "They were a flat file, and you had to run a product on your computer to view it. It was so incredibly annoying that you had to open another browser to view documents."
 
So annoyed was Matzelle, that he began developing Vuzit with Chris Cera about two years ago. In July 2007, he began working on it fulltime.
 
Essentially, Vuzit displays documents the way YouTube displays videos--with an embeddable element that can be branded and that functions alongside other Web applications (see examples here, here and here). Matzelle says he wanted a way to display documents in such a way that visitors to a Web page could read them and use them, but the owner of the site could keep control.
 
For the user, Vuzit makes viewing documents more convenient (no longer will programs like Adobe automatically launch--and sometimes freeze--your computer), while for the Web administrator it helps keep traffic on the site and ad revenue flowing in. Recently, the company released an enterprise version of Vuzit, which allows companies to install the platform on an in-house server.
 
A $100,000 round of financing from the Creative Economy Investment Fund will allow Matzelle and his three fellow employees to oversee a redesign of the Vuzit Web site and hire a VP of sales in the coming months. Within six months, Matzelle says, the company plans to bring on three or four more additional employees.
 
Source: Brent Matzelle, Vuzit co-founder
Writer: John Davidson
 
To receive Keystone Edge free every week, click here.

Ben Franklin Technology Partners invest $1M in 9 PA tech companies

Nine Pennsylvania companies begin the year with a fresh infusion of capital by the Ben Franklin Technology Partners of Central and Northern Pennsylvania. The total investment of nearly $1 million among all of the firms, decided during the technology partners' directors' last meeting of 2008, is intended to support the promise of innovation, job creation, and economic growth that the companies show. 

The winners are:
 
Energy Wall, LLC received $75,000 to continue development of high efficiency, air-to-air energy recovery exchangers that have no moving parts.
 
A $90,000 award will allow Expansyn Technologies, Inc., to continue its research into biofuel applications derived from a variety of novel plant proteins.
 
Indigo BioSciences, Inc. received a $200,000 investment for production and further development of frozen, single-use, whole-cell nuclear-receptor assay kits used in drug development, by researchers and in toxicological analyses. Read more about Indigo BioSciences here.
 
A $125,000 award to SilcoTek Corporation will further the company's plans to market coating technologies that improve the properties of stainless steel and decrease its likelihood of corrosion. 
 
Advanced Wall Forms Corporation received $100,000 to help manufacture, market, and sell the Snap Block Wall Form System. Snap Blocks are stay-in-place insulated concrete wall forms that reduce construction costs.
 
Integrity AG Systems was awarded $125,000 to continue providing a wide array of customizable clean-tech products, equipment and technologies for manure and herd management.
 
Air Dynamics received $75,000 for its design and further development of state-of-the art air pollution control devices such as the Kitchen Sentry for industrial and commercial applications.
 
Dynasty Software, LLC will use its investment of $57,500 to create a web-based application that makes it easier for hospital staff to organize, modify, and verify surgical equipment and tray inventories.
 
A $75,000 award will help Pioneer Energy Products, LLC to develop a renewable energy system for radio communication equipment that is located in remote sites and extreme environments.

Source: Ben Franklin Technology Partners of Central and Northern Pennsylvania
Writer: Joseph Plummer
 
To receive Keystone Edge free every week, click here.


Angel investors collaborate, pump $1.1M into NanoPack Inc.

Four Philadelphia-area angel investor groups joined forces to fund NanoPack Inc., a materials science company, with a $1.1 million investment late last month. The collaboration was a first for angel groups Robin Hood Ventures, Mid-Atlantic Angel Group, Delaware Crossing Investor Group and LORE Associates.
 
Howard Kravitz and Fred Levitt founded NanoPack in 2004. The company develops and markets environmentally friendly materials for the packaging industry, and specializes in food packaging where protection of contents from oxygen and moisture is essential.
 
One of NanoPack's first commercial products is a barrier coating for polyester and polypropylene packaging films, representing a multi-billion dollar market, according to Larry Brotzge, a general partner in Robin Hood Ventures.
 
Brotzge said that in addition to being a good investment, the collaboration process among the four angel investor groups provided a template for future cooperation.
 
"The difference here is that everybody had input into the terms sheet as it went along, everybody read the documents," Brotzge says. "It was more of a group affair. The process took longer but the end result was better, everybody owned it more. And to me, the noteworthy thing of it is that we've built a template here to do transactions in the future."
 
Source: Larry Brotzge, Robin Hood Ventures
Writer: John Davidson
 
To receive Keystone Edge free every week, click here.

Ben Franklin to invest more than $1.1M in regional economies

The Ben Franklin Technology Partners of Northeastern Pennsylvania announced Tuesday it will invest $1,144,400 in support of regional economic development. Nine early stage technology companies, two established manufacturers, and four business technology infrastructure initiatives will get a shot in the arm from BFTP.
 
Some tech companies will receive as much $150,000 from BFTP, including East Stroudsburg-based DMI Manufacturing Inc., Icon Legacy Custom Modular Homes LLC in Snyder County, Discovery Machine Inc. of Williamsport, Target-In and Viddler Inc., both in Bethlehem.
 
For Discovery Machine, the funds will make it possible for the company to expand into the private sector. "Making the transition from government work to the commercial service sector isn't easy, and Ben Franklin have been great to work throughout the process," says co-founder Todd Griffith.
 
Other tech firms receiving Ben Franklin funds are Cambrian Bio-Technologies Inc. ($75,000), eVendor Check Inc. ($35,000), Johnson-McCormick Technologies LLC ($50,000), and Pennsylvania Sustainable Technologies LLC ($50,000).
 
Two established manufacturers will also receive funding. Milton-based Clark Technology Systems Inc., a fabricator of lubrication equipment for chemical industries and refineries, will get $50,000 to establish a process management system for continuous improvement. Michelman-Cancielliere Iron Works Inc. in Lehigh Valley, steel fabrication, construction, and engineering firm, will get $14,400 to devise a plan to increase efficiency and reduce costs.
 
Four business technology support organizations are slated to get help from BFTP as well: $75,000 to NCC Coatings and Ink Research Institute; $20,000 to the Northeastern PA Keystone Innovation Zone; $10,000 to the Pennsylvania Angel Network; and $15,000 to the Pocono Mountains Keystone Innovation Zone.
 
Source: Ben Franklin Technology Partners of Northeastern Pennsylvania, Todd Griffith
Writer: John Davidson
 
To receive Keystone Edge free every week, click here.

Berks Economic Partnership accredited by International Economic Development Council

Berks Economic Partnership recently became the 22nd economic development organization worldwide, and the only one in Pennsylvania, to earn an accreditation from the International Economic Development Council, the largest membership association of its kind in the world.
 
On its Web site, the IEDC lauds BEP as the only organization marketing Berks County to an international, national, regional and local audience. BEP is credited with helping some 65 projects in Berks County since 2007, encouraging $136 million in Commonwealth investment and attracting and retaining nearly 11,000 jobs in the region over the past five years.
 
"Accreditation from the IEDC is the most prestigious accolade we can receive, and it highlights our commitment to economic development in Greater Reading,” said Jon Scott, President and CEO of BEP, in a statement.
 
"It really gives you credibility in the site selection community," says BEP VP Pamela Shupp. "And it's nice to know that we really are that well organized--that we can catch businesses that need help."
 
BEP is currently focusing on the alternative energy industry and looking for ways existing area businesses can leverage their expertise in various areas--like advanced manufacturing--to assist the emerging industry.
 
"We think there's some great opportunities to grow their market shares and help produce some of the things that industry is going to need," says Shupp
 
Source: Pamela Shupp, VP of Berks Economic Partnership
Writer: John Davidson
 
To receive Keystone Edge free every week, click here.

Ben Franklin biz plan contest dangles big prize for Central and Northern PA startups

One big idea will bring a revenue windfall--$100,000--for a lucky technology company that's located somewhere among the 32 counties of the Ben Franklin Technology Partners of Central and Northern PA (BFTP).

How to grab the golden ring of seed capital investment? Write a winning business plan that will capture the prize to be awarded early next year by the Ben Franklin Venture Investment Forum (BFVIF).

"New business start-ups require funds," says Patrick Farrell, President and CEO of Forward Vision, a previous contest winner. "But we also need guidance, and the Ben Franklin group has been extremely responsive in providing this support."

Next year's prize is four times greater than the reward offered to Farrell and earlier winners of the forum's challenge. The jump in prize money for the Big Idea Business Plan Contest should cause most struggling startups to become bug-eyed with excitement. It's rare for new enterprises to see 6-figure handouts dangled in front of them.

The award will be made on March 31, 2009, to a small company that builds its business in one of a number of sectors that include nanotechnology, green technologies, alternative energy, advanced manufacturing, advanced materials, medical devices, information technology, software or some other domain of technology or manufacturing.

The contest is open to companies that operate--or plan to develop their business--in the 32 counties that form the service area of the Ben Franklin Technology Partnership of Central and Northern Pennsylvania. The complete list of applicable counties is listed with competition rules at the contest's Web site.

In addition to location and a great idea for a business plan, qualified applicants are expected to have fewer than 50 employees and annual sales of less than $500,000 in 2007 as well as in year-to-date sales at the application deadline, which is December 17, 2008.

Semi-finalists will be chosen January 6, 2009. Business plans will be due February 16, 2009. Finalists will be chosen February 27, 2009, prior to the announcement of the winner on March 31, 2009.

Source: Ben Franklin Venture Investment Forum
Writer: Joseph Plummer

To receive Keystone Edge free every week, click here.


Ben Franklin Technology Partners recognized at international conference

Ben Franklin Technology Partners got its due last week at the International Economic Development Council’s annual conference in Atlanta, Ga., where it received the council's highest honor during a ceremony on Oct. 21.
 
Calling Ben Franklin Technology Partners a "trendsetting organization," that is "leading the charge," IEDC Chair Robin Roberts Krieger emphasized the importance of economic developments efforts "in the midst of an inhospitable financial climate."          
 
IEDC received almost 500 nominations from around the world for recognition in a broad range of economic development categories, and BFTP was one of 25 recognized for outstanding achievement in the category of “Technology-Based Economic Development by Organizations Serving Areas with Populations Exceeding 200,000."
 
Terry Singer, Director of Statewide Affairs for BFTP, said it was a particular honor to receive the award during the organizations 25th anniversary year. Ben Franklin Technology Partners, founded in 1983, is one of the longest running programs in the country dedicated to growing a state's technology-based economy.
 
Over the past three years, BFTP has assisted client companies in creating or retaining 9,410 jobs, provided 758 companies with financial assistance or investment, provided 2,483 companies with business or technical assistance and helped companies create 751 new or improved products or processes.
 
In April 2008, the U.S. Department of Commerce recognized the BFTP network as the outstanding technology-led economic development organization in the country.
 
Source: International Economic Development Council
Writer: John Davidson
 
To receive Keystone Edge free every week, click here.

Three tech startups to compete for cash in 'Ben Franklin Venture Idol'

Following the lead of the hit TV show "American Idol," Ben Franklin Technology Partners will stage a panel-judged competition for investment cash in "Ben Franklin Venture Idol" on Nov. 13 at Lehigh University in Bethlehem.
 
Three early-stage tech company entrepreneurs, Third Eye Diagnostics, SPINACT, LLC, and XiGo Nanotools, will present short pitches to a panel of investors and a live audience. The investors will ask questions, the audience will vote, and the winning startup will get a $5,000 investment.
 
Fred Beste, Managing Partner of Mid-Atlantic Venture Funds will host the competition, and there will be short presentations by other venture capitalists before the "Venture Idol" competition begins.
 
Tickets to the event are $25 in advance or $30 at the door. To reserve a place, download the registration form or or send contact information and a check payable to Ben Franklin Technology Partners, 125 Goodman Drive, Bethlehem, PA  18015.
 
Source: Ben Franklin Technology Partners
Writer: John Davidson
 
To receive Keystone Edge free every week, click here.


Cohera Medical and ClearCount land funds, Plextronics too; hiring

Three rising Pittsburgh tech companies reeled in funding this month, Cohera Medical Inc., Clear Count Medical Solutions and Plextronics.

Medical adhesive company Cohera secured $16.1 million for the continued development of its “tissue glue,” a surgical adhesive that adheres flaps of tissue during plastic surgery.

The financing was lead by a new Pittsburgh angel investor that supports regional businesses, Bradford Capital Partners, as well as other angels in Pittsburgh and San Francisco, says Patrick Daly, CEO.

To read the complete story on Pop City, click here.

Latest in local startup funding news; Chrysalis Ventures hits $175M

In funding news, Quantum Simulations, a developer of artificial intelligence tutoring, assessment and professional software, has received a $500,000 research grant from the National Science Foundation to develop the first-ever tutoring software for science delivered in real-time over the Internet.

RE2, a leading developer of robotics unmanned systems technologies, received a $730,000 contract grant from the U.S. Army to develop a prototype robotic nursing assistant that can work alongside healthcare workers in busy hospitals. RE2 also received $100,000 from the U.S. Navy to develop route planning technology that calculates the safest way through a post-combat or urban area.

And Chrysalis Ventures, a source of equity capital for startups in the Midwest and South, has closed on a fourth investment fund that now totals $175 million. Chrysalis, which opened an office in Pittsburgh this year, invests primarily in healthcare services and technology, media communications and emerging trends.

To receive Pop City free every week, click here.

Source: Al Renshaw, Quantum Simulations, Jessica Pedersen, RE2
Writer: Deb Smit, Innovation News Editor for Pop City, our Pittsburgh-based sister publication
212 Venture Capital Articles | Page: | Show All
Share this page
0
Email
Print
Signup for Email Alerts