Upstate New York has a growing infrastructure that provides support for early-stage companies, meaning those companies that are already established with some initial funding and staff. However, an ongoing challenge to the goal of building more such companies is how -- at a much earlier stage -- to identify and support new technologies that have the most promising potential for commercialization.
These ideas emerge daily from universities, R&D labs, and the broader community. And the inventors and researchers behind these creations often want to start a company to make products based on their discoveries. But these tech-focused individuals often have no business education or experience, and no effective way to determine whether or not their idea has commercial viability.
In other words, there are billions spent for private and government funding of R&D, and there are equity investors and grants available once a company is formed. However, very few resources are applied to the period after a technology or idea is realized and before the initial seed investment is made in a start-up company -- a period that often lasts several years.
The result is that the world never benefits from many discoveries that actually have commercial potential and, conversely, resources are often wasted trying to build an invention-based business when a quick systematic analysis might have revealed that there was little chance of commercial viability.
For a decade, AM&T has been collaborating with universities and a Rochester-based company to help address this "pre-seed gap" -- the phase between idea realization and the initial or seed investment in a new company. This program is in the form of a series of Pre-Seed Workshops ("PSW"), with the most recent example occurring in May at the University at Buffalo Center of Excellence in Bioinformatics and Life Sciences.
The PSW curriculum used in Buffalo was developed ten years ago by Neworks LLC, launched in Rochester, and was quickly adopted by university communities throughout New York State; and AM&T became involved at the outset. Ed Gaetano, AM&T’s executive director, explained: "Most people associate AM&T with our primary mission --assisting established manufacturing companies.
However, an important secondary focus is for us to support entrepreneurs in becoming the manufacturers of the future. With this in mind, AM&T has provided Pre-Seed Workshops with a decade of financial support and staff consultants who work directly with the workshop participants."
More recently, Michael Meador, an AM&T principal consultant, became a certified PSW facilitator, and co-led the Buffalo event as well as recent workshops at Cornell, Binghamton, and Stony Brook Universities.
Mark Wilson, one of the original PSW creators, described the PSW as, "...a two and a half day, build-a-company event that rallies community talent and resources to investigate and transform potentially commercializable technologies into pre-seed stage companies. We take 6-8 ideas, assemble teams to work with each inventor, and give them a range of assignments that examine all the critical aspects of moving their idea from the concept to the pre-seed stage. Each team that conducts the analysis simulates a real start-up company with members who have diverse expertise in technology, business, finance, law, etc., and includes a designated facilitator -- a coach".
At the Buffalo PSW, eight teams were assembled to focus on ideas that included new tools for medical and dental procedures, a drug safety screening device, and software to support better autism treatment and education. During the initial day and a half, the teams built the foundations of their assessments in a series of intense hour-long sessions. They continued working over the following week, and then re-convened for a day to put the finishing touches on a summary of their findings. Each team delivered a 15-minute presentation to a panel of experts representing decades of experience with marketing, investing, and business management. The panel members’ feedback included observations and opinions about the conclusions reached by the teams, as well as recommendations about what next steps should be taken.
Here’s a sample of comments from participants in the Buffalo PSW:
- 'This has exceeded my expectations and opened the door to so many possibilities. I’m glad to attend and for the opportunity to advance my product.'
- 'Thank you for the PSW, it has really helped us have a much better idea of our strengths and weaknesses, and to understand and prepare for the challenges we are about to face.'
- "The core activities (you) have put together is quite relevant to challenges (that) cities like Buffalo have in nurturing their innovation base."
While there is an inevitable sense of competition that emerges among the teams, there are no declared winners or losers in a PSW event. Wilson explained that, "Our primary goal is to help potential entrepreneurs move off the point of indecision. Recognizing and acknowledging that an idea doesn’t have commercial merit is valuable at this pre-seed stage -- it enables the potential entrepreneur to move on, to reallocate energy and resources to a new project."
That said, the PSW does have an impressive track record for helping ideas move forward. Seventy Pre-Seed Workshops have been held involving 2,697 participants, with 401 teams analyzing the same number of ideas, inventions, and innovations. The PSW has helped create or strengthen over 170 high-tech, for-profit ventures, and many PSW participants have gone on to win local, national, and international business plan competitions. Many have also received grants and/or secured seed and venture capital funding. Based on survey results, Wilson estimates that about $100M in follow-on capital has been raised and over 600 jobs created.
Gaetano said that fostering regional collaborations are an integral part of AM&T’s strategic plan. "We have outstanding internal resources, but our ability to best serve all manufacturing companies, including start-ups, is to link arms with the best resources throughout the state -- and the national MEP network of organizations that share our mission. Our work with the Pre-Seed Workshop is a prime example of that philosophy."
See this and other newsletter articles at http://amt-mep.org/files/8814/0430/1033/2014-07.pdf
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