Venture Capital : Innovation + Job News

In these challenging economic times, it's increasingly difficult for entrepreneurs to find needed funding to launch start-up businesses or expand an existing business. Private financing, such as venture capitalists and angel investors, can be one viable solution for entrepreneurs looking for business funding. The trick is how to find those funding sources that might be interested. A newly launched online platform has entered the financial scene with the goal of bringing together entrepreneurs seeking funding and lenders, venture capitalists, and other investors, as well as firms that specialize in providing business services.

Columbia based Venture Funding Network provides a place for entrepreneurs, investors, and business service providers to get connected online at its new website, VentureFundingNetwork.com. Registration is free and membership allows businesses to access an array of tools designed to promote customized connections.

"In today's business climate, it's the connections you make that open doors and help you succeed," says Phillip Bradford, Founder and CEO of Venture Funding Network, LLC. "Venture Funding Network offers our members the opportunity to make those door-opening connections that can lead to business and job growth."

Venture Funding Network offers entrepreneurs the opportunity to post investment-grade business plans and specialized profiles outlining their business funding needs. Entrepreneurs will also have access to a searchable database of lenders, venture capitalists, angel investors, and other financiers looking to make new investments. Business service providers will have the opportunity to post profiles to the site that help them connect with entrepreneurs looking for needed specialized services such as accounting and business plans. Financiers can use the searchable database of entrepreneurs to find the kind of loans or funding that fit their interests. The website also promotes opportunities for buying and selling businesses, as well as finding new business partners, joint ventures, or other collaborations.

"I'm excited about the opportunities for development and growth that Venture Funding Network provides for Maryland and D.C. area businesses." says Bradford.

As Venture Funding Network continues to grow, the Columbia firm looks to expand its national reach. The company will begin rolling out a national affiliate marketing program in the next few weeks.

Writer: Amy McNeal
Source: Phillip Bradford, CEO, Venture Funding Network, LLC

Can you build a booming business in a couple of days? The organizers of Baltimore Startup Weekend think it's possible. Over the weekend of Friday, April 15 to Sunday, April 17, more than a hundred business-types of all stripes -- programmers, designers, number-crunchers, and marketing gurus -- will assemble in small groups of five to ten each and seek to launch a business in one weekend.

Everyone starts on Friday at the Emerging Technology Center in Canton with individual ideas, and that evening teams start to coalesce around the best kernels of a company that are pitched to the group. By Saturday, work begins in earnest. The majority of that day is devoted to setting up enough of a company that by Sunday night each team can present a fully-formed enterprise to the plenum at the University of Maryland BioPark.

Aside from the knowledge that you've got what it takes to go through a 54-hour entrepreneurial gauntlet, successful participants will also compete for a piece of a cash prize pool estimated at around $10,000, in addition to non-cash prizes like workspace and free legal advice.

Organizers of Baltimore Startup Weekend include Sunrise Design founder Mike Brenner, Monica Beeman of Funding Universe and Startup City, Fulya Gursel of the Emerging Technology Centers in Canton and on 33rd Street in Waverly, and Edcosystem.com founder and CEO Khalid Smith.

"You don't have to know anybody. Just bring an idea or even just your talent," Brenner says.

"Startup weekend was an original concept developed by entrepreneur Andrew Hyde who lived in Boulder, Colorado and then New York, and sold the concept," Brenner explains. Startup Weekend now unfolds in 5 cities each weekend. With funding from the Kauffman Foundation of Kansas City, which promotes entrepreneurship, and sponsors like Red Bull, which promotes staying awake, Startup Weekend participants are provided with enough resources to allow them to focus on developing ideas into products. What follows the weekend can quickly become a real market force: within weeks of formation at a recent Startup Weekend in Los Angeles, Zaarly raised $1 million in venture capital funding.

Brenner is optimistic about what could come out of Charm City's Startup Weekend.

"I think it's great proof that we can do something in town in a weekend that can be viable, and that we can rapidly prototype it in the week or so after the event." When asked what kind of person might be attracted to such a short-term business incubator, he adds, "It's people like me that think they can spend a weekend dedicated and work their asses off and make something cool."

Writer: Sam Hopkins
Sources: Mike Brenner, Baltimore Startup Weekend

On February 16th entrepreneurs and business interests convened in Annapolis to show of support for the InvestMaryland bill. The legislation, spearheaded by Governor O'Malley, would act as a fund for state investment into the startup economy.

The bill would allow insurance companies to forward-pay their tax liabilities at discounted rates and thereby replenish the Maryland Venture Fund. The hundred-million dollar fund would then be invested as venture capital into Maryland startups. In his testimony, O'Malley said this fund would "help our businesses create thousands of jobs, injecting hundreds of millions of dollars into Maryland's innovation economy."

The legislation addresses a disparity between Maryland's economic potential and its available investment capital. "Great research, great technology, great innovation but we rank very low when it comes to availability of venture capital. So InvestMaryland is an effort to get venture capital flowing," said O'Malley.

Panel member David Troy said, "One of the great things about this bill is it will provide opportunities for parallel and future private investment and that's terrific. Anything that can prompt investors to get into the market is great in my book."

Questions, however, remain regarding the best methods of the fund's allocation. "The Department of Business and Economic Development has indicated a preference not to segment it, and I agree with that decision. There is no reason to create legislative lock-in for one sector vs. another; that would only serve to limit emerging opportunities," said Troy.
Mike Brenner co-organizer of Startup Baltimore said about the allocation, "I think the bill is great for small startups as long as it's distributed amongst a large number of businesses.  I'm not really in favor of seeing $30 million of this fund go right to one company."

Writer: Ryan LeRoy Kleeberger
Sources: David Troy, Mike Brenner, Karl Gurntow, Governer O'Malley, Christian Johansson, The Milken Institute

While the economy -- both nationally and across Maryland -- continues to slowly regain momentum, there are some bright spots to report according to recent reports released by the Maryland Department of Labor, Licensing and Regulation. 

Maryland continues to see modest job gains In June, despite a tepid national labor market, the agency repors. The state economy added 1,600 seasonally adjusted jobs, 1500 in the private sector,  for a 0.1 percent monthly growth, while, nationally the US lost 125,000 jobs for a 0.1 percent monthly loss. Maryland's total employment was up compared to year-ago levels (not seasonally adjusted) for the first time in two years. June marks the fourth month in a row that Maryland has added jobs in the private sector.

While the pace of job generation slowed considerably in June, just over 40,000 jobs have been restored to Maryland's business base since January.

Maryland leisure and hospitality employment grew by 5,800 seasonally adjusted jobs in June, more than any other major sector, driven by accommodation/food services job growth, according to the Maryland Department of Business and Economic Development. During the first half of the year, this sector added 21,900 jobs, ranking it best in the country with 9.7 percent growth. At the year's halfway point, the sector accounted for over 60% of total Maryland job creation and over 80 percent of private job creation Nationwide hospitality accounted for 14 percent of job gains.

Professional/business services added 2,800 jobs in June for a 0.7 percent monthly growth rate. Within this sector, professional, scientific & technical (PST) services employment grew by 2,000, for 0.9 percent monthly growth (sixth best in the nation). During the first half of 2010, PST added 7,100 jobs in Maryland, for 3.1 percent growth and third best in the country.

Construction added 1,300 jobs in June for 0.9 percent monthly growth and added jobs for four straight months (seasonally adjusted) for the first time in about three years. During the first half of the year Maryland construction added 6,600 jobs, good for 4.6 percent growth, sixth best in the country.

In more good news, Gallup's Job Creation Index for the first half of 2010 ranks Maryland No. 7 among the Best Job Markets.  During the first half of 2010, 32 percent of employed Marylanders said that their employers were expanding their workforce. This was the fourth highest positive response among states. Conversely, 21 percent said their employers were shedding payrolls. The Index is calculated as the difference between the former and latter poll result. Based on these polling results, Maryland's 2009 Job Creation Index was 11, tying for seventh best among states.

And as if that wasn't enough positive job news,  another just released report from the Center on Education and The Workforce at Georgetown University has found that the share of jobs in the U.S. economy which required postsecondary education increased from 28 percent in 1973 to 59 percent in 2008. That's good for Maryland because by 2018, 66 percent of jobs in the state -- some 2 million -- will require some postsecondary education. That will put D.C., Massachusetts and Maryland in the lead nationwide,  with the three regions sharing total jobs requiring a graduate degree, according to report.

Source: Deparment of Business and Economic Development
Writer: Walaika Haskins

The Maryland Technology Development Corporation (TEDCO), celebrated the funding of its 200th company. American Dynamics Flight Systems (ADFS) in Jessup, Md., which received $75,000 from TEDCO's NAVAIR Technology Insertion (NAVTI) program was lucky No. 200.  Over the course of TEDCO's 12-year history, the organization has provided more than $8.5 million in funding to Maryland businesses through its signature Maryland Technology Transfer and Commercialization Fund (MTTCF), which makes up over 75 percent of TEDCO's portfolio.

"TEDCO's has done an outstanding job in making Maryland one of the premier locations for technology-based economic development, bringing high-skilled, high-paying jobs to Maryland," says Senator Benjamin L. Cardin. "Today, I join TEDCO as it features its 10 most innovative companies and celebrates the funding of its 200^th company, American Dynamic Flight Systems. TEDCO understands the importance of nurturing high-tech companies with the capital they need to succeed so that we can ensure good paying jobs for Marylanders."

TEDCO is independent entity, was established by the Maryland General Assembly in 1998 to facilitate the creation of businesses and foster their growth in all regions of the State. TEDCO's role is to be Maryland's leading source of funding for seed capital and entrepreneurial business assistance for the development, transfer and commercialization of technology.

TEDCO connects emerging technology companies with federal laboratories, research universities, business incubators and specialized technical assistance. For the fifth consecutive year, TEDCO was recognized as the most active seed/early-stage investor in the nation in the August 2008 issue of Entrepreneur magazine and received the national Excellence in Technology-Based Economic Development award from the State Science and Technology Institute (SSTI) for the Maryland Technology Transfer Fund (MTTF) program in October 2008.

"I congratulate TEDCO on this important and significant milestone," said Governor Martin O'Malley. "TEDCO is a valuable resource which attracts companies to our state and sustains our reputation as a national leader in technology development. We are fortunate to have TEDCO in our backyard and I thank the organization for its role in moving Maryland forward."

 ADFS develops Unmanned Aircraft Systems (UAS), including its next generation AD-150 which is a maritime aircraft system capable of vertical take-off and landing, and high speed flight. As a result of TEDCO's funding and support, the company is currently working with NAVAIR and the Patuxent Partnership to assess the viability of its technologies with the U.S. Navy.

Since its inception TEDCO has provided funds for an array of the state's  most innovative companies including Fyodor Biotechnologies, which is developing novel technologies to improve the management of malaria, including a malaria test kit; HeMemics Biotechnologies, Inc., which developed a technology to dehydrate biologics (proteins, cells, etc.) in dried or partially dried format; Spiralcat, which developed a technology that recovers water, energy and third-generation biofuels using harvesting systems; and Oculis Labs, which developed a computer security technology that protects computer screens against eavesdropping.

""It's an honor to be the recipient of TEDCO's 200^th funding award," says Wayne Morse, president of ADFS. "TEDCO provides access to exclusive partnerships and resources which are hard to come by. Through this funding, we were able to advance our technology and gain a greater presence in the marketplace, which helped bring ADFS to the next level."

Source: The Maryland Technology Development Corporation
Writer: Walaika Haskins

The Maryland Biotechnology Center, the State of Maryland's portal to programs and resources intended to grow and strengthen the state's bioscience community, has awarded $270,000 through the Maryland Industrial Partnerships (MIPS) program to six biotechnology companies to their product development projects .

MIPS teams Maryland companies with faculty from the University System of Maryland to help the companies develop high technology, biotechnology, or technology-related agricultural products. Companies provide matching funds to help pay for the projects. All funding goes to participating faculty.

The Center recently signed off on initial funding for three projects. Each was in the second year of a two-year (phase 2) project. Three additional first-year projects were also made possible by freeing up MIPS funds to support them.

"As Maryland's resource center for growing and strengthening the state's bioscience community, one of the Maryland Biotechnology Center's charters outlined by Governor Martin O'Malley in his 2009 BioMaryland 2020 strategic plan is to provide funding to assist companies with late-stage commercialization objectives," says Judy Britz, the Center's executive director. "MIPS has a proven process for evaluating viable research projects and a strong history of successfully helping biotechnology companies develop commercial products, so by supporting MIPS, we are fulfilling part of our charter and are boosting key contributors to the growth of the state's bioscience cluster."

The phase 2 projects that the Center will directly support include Rockville-based Aparna Biosciences Corporation that has teamed with A. James Mixson, associate professor, University of Maryland, Baltimore to develop therapeutics to treat a variety of fungal infections; Encore Path Inc., based in Baltimore has, and Appa Anjanappa, professor, University of Maryland, Baltimore County, who are developing a new rehabilitative TREADTRAC Device to enable stroke patients to regain walking skills; and another Rockville-based company, VectorLogics Inc. and Vikram Vakharia, professor, University of Maryland Biotechnology Institute, who are working on a treatment for the hepatitis C virus that uses viral vectors to deliver therapeutic proteins.

MIPS was able to support three additional projects thanks to the Center funding, including, Rockville-based Celek Pharmaceuticals LLC and Susan Keay, professor, University of Baltimore, to evaluate the efficacy of a novel therapeutic for interstitial cystitis/painful bladder syndrome, a chronic and debilitating bladder disorder; Cellphire Inc., also in Rockville that has teamed with the University of Maryland Biotechnology Institute MDBioproSM (GMP Biomanufacturing Program) to establish a quality system and manufacturing processes for the current Good Manufacturing Practice (cGMP) production of the company's freeze-dried platelet products for both diagnostic and therapeutic indications; and College Park's Zymetis Inc. that is working with Robert M. Briber, professor, University of Maryland, College Park, in the development of low-cost solvent systems to reduce the crystallinity of native cellulose, reducing the need for enzymes in biomass digestion for the production of ethanol and other biofuels.

"MIPS has helped three of the most successful biotechnology companies in Maryland�MedImmune [part of AstraZeneca], Martek Biosciences, and Digene Corporation [now part of Qiagen]�develop products," says MIPS director Martha Connolly. "These companies have generated thousands of jobs, brought in millions in revenue and contributed tax dollars to the economy. The Maryland Biotechnology Center funding allows us to bolster what could be the leading biotechnology companies of tomorrow."

The Maryland Biotechnology Center contract with MIPS is for one year.

Source: The Maryland Biotechnology Center
Writer: Walaika Haskins

Maryland-based venture-backed companies averaged annual revenue growth of 9.3% and job growth of 3.7% from 2006 to 2008. Both rates were the second highest among states, according to a new report, "Venture Capital: The Economic Importance of Venture Capital-Backed Companies to the U.S. Economy" released by IHS Global Insight.

As venture-backed firms are overwhelmingly high-tech - and high risk - the success of these firms indicates Maryland's hospitable climate and strategic support of such companies, as demonstrated by the state's numerous tax credits for high-tech investment and strategic location near federal research laboratories and other companies engaged in complementary high-tech activities, according to the Maryland Department of Business and Economic Development (DBED).

Maryland ranked 14th overall for revenue earned at venture-backed companies with an average of some $40 million. Maryland, with its strength in the healthcare industry, edged out perennial powerhouses Massachusetts and Texas for second place with 3.7 percent compound annual job growth and bested fellow upstart Arizona for second place in revenue growth, according to the report.

Source: IHS Global Insight
Writer: Walaika Haskins

Arginetix, a Baltimore-based biopharmaceuticals firm, closed a Series A financing round after raising $10.75 million. The company is developing small molecule inhibitors of the enzyme arginase for the treatment of endothelial dysfunction, including pulmonary arterial hypertension, atherosclerosis and asthma.

Both Quaker BioVentures and MedImmune Ventures, a wholly owned venture capital fund of the AstraZeneca Group, led the financing.. Maryland Health Care Product Development Corp., Osage University Partners, Red Abbey Venture Partners, and company co-founder Acidophil LLC also participated in the round.

The financing will be used for continued research and development of Arginetix's first-in-class arginase inhibitors for cardiovascular and pulmonary indications. The company's scientific foundation is based on licensed intellectual property of its scientific co-founders, David Christianson, Ph.D. at the University of Pennsylvania and Dan Berkowitz, M.D. at The Johns Hopkins University.

"This financing is an important endorsement for the potential for Arginetix' discovery and development programs," said Gary Lessing, CEO and co-founder. "The company is fortunate to be working with a talented and experienced group of investors, including both traditional and corporate-based life sciences firms. Their expertise in the discovery and development of drugs and their track record at building world-class companies will be invaluable to Arginetix' continued success."

"Arginetix is pursuing major clinical opportunities using their technology for patients with cardiovascular and pulmonary diseases. The company's recent research has added further validation for this important innovation," says Dr. Geeta Vemuri, partner at Quaker BioVentures.

"Arginase appears to be an attractive target with therapeutic potential in a wide range of cardiovascular and pulmonary indications. We are pleased to support their development efforts through this investment and look forward to working with the management team," says Eva M. Jack, Managing Director at MedImmune Ventures.

Source: Gary Lessing, Arginetix
Writer: Walaika Haskins