Volume 11 - September 2013
Venture capital firms located on the coasts have long been the norm. However, big money investments from Midwest firms are attracting an increasing amount of attention, leading Forbes to spotlight twelve venture capital firms that have been making waves, including two located in St. Louis.
Cultivation Capital: Cultivation Capital is a seed and early-stage investment firm focused on funding tech, financial services, and life science companies. This year Cultivation made its inaugural life science investment into Adarza Biosystems, a startup that was recruited by the BioGenerator to expand its operations from New York to St. Louis.
Ascension Health Ventures: Ascension Health Ventures manages $550 million, which they invest into healthcare IT and services, medical device, and diagnostics companies. They are the strategic venture fund of St. Louis-based parent company Ascension Health, the nation’s largest Catholic hospital system. Ascension’s investments in St. Louis include Isto Technologies, an orthobiologics company, and Neurolutions, a medical device company that works with Brain Computer Interface (BCI) technology.
BioSTL is conducting a series of workshops to help entrepreneurs secure SBIR funding for their emerging companies. On October 1 BioSTL and the BioGenerator will host an overview of the National Cancer Institute’s (NCI) SBIR Program with the Program Director of NCI’s SBIR Development Center. On October 9-10 BioSTL will host an intensive seminar on applying for NIH SBIR/STTR funding with Lisa Kurek. Below, Kurek talks about SBIR grants as a funding option for startups.
SBIR/STTR Funding: Solving the "Come Back When..." Problem
Lisa Kurek, Managing Partner
BBC Entrepreneurial Training & Consulting
Companies developing high-risk, high-return technology based products often face a funding conundrum. They need capital to conduct their R&D. However, when that R&D has high technical risk they typically encounter the “come back when” problem. What do I mean by this? When the opportunity presents a high return, the sources of capital sought are often venture capital, angel funding and/or corporate investment. Presuming the overall business strategy is sound and meets the scope of the potential investor, the opportunity will be considered. However… and here is when you hit the wall…. If there is still high technical risk most investors will tell you to “come back when”. When is when? It varies. When you have customers. When you are in the clinic. When you have a working prototype. Those are typical responses. Sounds like a catch 22, right? But there is a potential solution.
The federal SBIR/STTR programs provide approximately $2.5 billion of non-dilutive capital every year to small businesses developing high risk, high return technology based products. The money is targeted specifically to fund R&D activities to reduce the technical risk thereby helping to facilitate access to follow-on funding. Eleven federal agencies, ranging from the Department of Defense to the National Institutes of Health, have SBIR funds available. The program is competitive but with over $1 million per project of non-dilutive funding available, an SBIR/STTR grant or contract can be the factor that allows you to come back!
Interested in learning more? Join us at BioSTL on October 9-10 for a two-day SBIR/STTR workshop focused on preparing a competitive proposal to NIH. For more info contact: Sarah Kogan, firstname.lastname@example.org.
St. Louis CEO Named Missouri Entrepreneur of the Year
In 2011 Chad Stiening was working for an entrepreneur support organization in Louisville, KY and contemplating the next steps to take to grow Kypha, the medical device company he co-founded with Dr. Paul Olson. He decided that the best chance at success might mean relocation. Stiening considered Chicago, Indianapolis, Madison, and Minneapolis, but it was the BioGenerator along with St. Louis’ deep base of strong university research, affordable facilities, and talented workers that caught his attention and convinced him that St. Louis was where Kypha would flourish.
“We chose St. Louis based on a healthy abundance of intellectual, physical, and early-stage financial capital, including a unique asset in BioGenerator and its shared lab facility,” Stiening said. “The regional assets and strong bio-entrepreneurial support in general has accelerated our progress and put Kypha within striking distance of launching its first product.”
The move paid off. Kypha has tripled in size, employing 10 people based in their offices in the BioGenerator Accelerator Labs. To date, Kypha has raised more than $3 million from local investors including the BioGenerator, Missouri Technology Corporation, St. Louis Arch Angels, Billiken Angels, and Holton Capital Group.
Stiening’s success hasn’t gone unnoticed. Earlier this month, Missouri Governor Jay Nixon named him this year’s Missouri Entrepreneur of the Year, an award given to an entrepreneur demonstrating significant leadership in launching a new business, creating private sector employment opportunities, or developing a new technology or adopting/applying an innovative manufacturing process.
News About the Biosciences in St. Louis
- St. Louis develops a reputation as pre-eminent plant science hub [St. Louis Beacon]
- WUSTL bucks global trend in female entrepreneurship [Washington University]
- BioGenerator to triple in size [St. Louis Business Journal]
- Certara announces partnership with C-Path to test TB drugs [Vaccine News Daily]
- BioGenerator wins national award [St. Louis Post-Dispatch]
- St. Louis Economic Development Partnership [STL Partnership]
- MediBeacon raises $3.5 million in less than a year [St. Louis Business Journal]
- Medical startup hatched at Washington University continues strong performance [Washington University]
- SAFC® Strengthens Biopharmaceutical Position With Innovations to Established CHOZN® Portfolio [Sigma-Aldrich - BioMedReports]
- Entrepreneur of the year sets sights on tracking head injuries [St. Louis Business Journal]
The BioGenerator was named a winner of SSTI’s 2013 “Excellence in TBED” (technology-based economic development) award, recognizing BioGenerator and its programs as national models for investing in science, technology and innovation to grow the economy and create high-paying jobs. SSTI is a national nonprofit organization that leads, supports and strengthens efforts to improve state and regional economies through science, technology, and innovation.
StartUp Connection’s Innovation Showcase and Entrepreneur Resource Fair brings together two key parts of the St. Louis region’s entrepreneurial ecosystem: the community of innovative startups and the resource organizations that support them. This year, 60 entrepreneurs will pitch their startups, 20 of which are bio-related. BioSTL will be sponsoring two awards for presenting bioscience companies. To attend the event, click here.