venture capital : Innovation + Job News

A medical device startup is moving from Tennessee to Cincinnati. Along the way, it's getting up to $2 million in venture capital and a new, locally based CEO.

NanoDetection Technology, relocating from Oak Ridge, is about two years from bringing its first product to market. Its patented Biosensor Detection System finds genes, antibodies or pathogens within a biological or environmental sample. It's designed to be used in emergency rooms, doctor's offices or by food safety or law enforcement organizations. The system works quickly; it takes just minutes instead of days to detect infections or bio threats, making it a potential game changer.

The company is currently looking for lab space in Cincinnati. CincyTech, the city's nonprofit venture capital investor, was instrumental in recruiting NanoDetection. This is the first company CincyTech has attracted from outside the state, and the nonprofit is participating in what's expected to be a $2-million venture capital round.

In the first round of financing, CincyTech has pledged $250,000, Southern Ohio Creates Companies is investing $100,000, and an unnamed private investor is putting in a sizeable stake. The U.S. Department of Agriculture awarded NanoDetection a $175,000 grant to research food-safety applications.

Joel Ivers, an experienced Cincinnati area executive, will come on as the NanoDetection's new CEO. Ivers has worked in biomedical fields in Greater Cincinnati and Northern Kentucky for more than 30 years, most recently as president of Union Springs Pharmaceuticals in Northern Kentucky.

"The funds raised now will allow the company to complete clinical trials and obtain regulatory approval to launch the system in the health-care market in early 2013," Ivers says.

Source: CincyTech
Writer: Feoshia Henderson

Six new digital companies are pitching to investors in Cincinnati, New York City and San Francisco after finishing an inaugural 12-week program aimed at developing promising consumer-based businesses.

These companies were housed at The Brandery, Cincinnati's first consumer marketing startup accelerator. The Brandery's founders are Cincinnati digital marketing executive David Knox and serial entrepreneur J.B. Kropp, vice president of channel development at social media branding firm Vitrue.

The companies -- ranging from an innovative online gift-giving service to a wedding vendor website -- were chosen in a competitive process. They were unveiled to about 150 potential investors, mentors, area media and fellow entrepreneurs in a Demo Day in mid-November. Each received $20,000 in financing from The Brandery in return for a 6 percent equity stake in the company.

The founders of two companies actually moved to Cincinnati from other states because of the opportunity The Brandery provided. The founders of Giftiki, which offers an online version of a greeting card with money enclosed, came from Texas. Founders of TurboBOTZ, a video game management service for consumers, also moved to the Queen City from the Chicago area.

"Both of these companies will be staying in Cincinnati now that The Brandery is over," Knox said.

The accelerator sought company founders who could prove their success potential, with big ideas, who devote a full-time effort to their company, Knox said.

"We didn't want "lifestyle" companies that would employ a few people, but instead businesses with the potential to one day employee hundreds," Knox said.

For a full roundup of The Brandery's first class, or to apply for next year's class, go the The Brandery's website.

Source: Dave Knox, The Brandery
Writer: Feoshia Henderson

Wireless technology already helps us with everyday tasks like changing TV channels, making phone calls and surfing the web. Before long, it will help people stay alive, too.

Endotronix Inc. is developing a system that enables doctors to monitor a patient's status remotely and therefore, be able to intervene quicker when life-saving action must be taken due to conditions such as hypertension, abdominal aortic aneurysms and congestive heart failure.

The system uses miniaturized wireless and implantable pressure sensors licensed from Cleveland's NASA Glenn Research Center in 2008.

The pressure sensors implanted in the patient's body collect valuable data that is sent to a hand-held or wearable device. That device wirelessly transmits the data to the doctor.

The company, which has facilities in Cleveland and Peoria, Ill., got $250,000 from JumpStart Ventures of Cleveland last month.

"We're excited about it," says Michael Lang, of JumpStart, citing the technology's ability to save time and money and extend life.

Endotronix also is a portfolio company of The Great Lakes Innovation and Development Enterprise, a project of the Lorain County Commissioners, Lorain County Community College, and the Ohio Department of Development; and reportedly has gotten $400,000 from a group in Illinois, too.

Source: Michael Lang, JumpStart
Writer: Gabriella Jacobs

Entrepreneurs, venture capitalists, service providers, educators and others will converge on the Hilton Garden Inn in Perrysburg next week for Venture Tech -- a series of events designed to support Ohio startups.

Sponsored by the Toledo-based Regional Growth Partnership (RGP), three events -- Venture Fair, Tech Connect, and Business Acceleration Tracks -- are all aimed at connecting entrepreneurs and those hoping to launch new business ideas with resources that can help them.

The Venture Fair on Wednesday will include a full day of exhibitor tables, networking opportunities, and panels, according to the RGP. Question-and-answer sessions with venture capitalists and successful CEO entrepreneurs, sessions focused on venture capital for biosciences and alternative energy and discussions on Ohio's capital ecosystem are included.

That evening, the RGP will host Tech Connect, which it describes as "a casual networking event which offers attendees the chance to meet the 'right people' to help launch their business idea. "

On Thursday, Venture Tech will offer what it calls Business Acceleration Tracks, designed to provide information about taking innovative high-tech business ideas to the next level. The half-day session is designed to "help attendees learn how to identify critical issues regarding their business plan and discover keys to planning, launching, and operating a high-growth business."

Tracks will focus on attracting capital through a strong business plan, business plan execution, bootstrapping strategies, government funding opportunities, venture capital and angel funding basics and how to develop relationships and present to such investors.

For more information and to register, go to www.rocketventures.org

Source: Regional Growth Partnership
Writer: Gene Monteith

It's uncertain how many Americans are playing console games for money. But with nearly 70 such games hooked to the Internet in North America, Beyond Gaming hopes to tap into at least 30,000 players within its first month.

The concept is simple: provide a site through which members can play console game tournaments for fun � no membership fee � or for stakes � $7.95.

Because the Toledo company takes no cut of the winnings, and because console games are considered games of skill, the service is legal, says President and CEO Tony Legeza.

Legeza and co-founder Justin Yamek, himself a competitive console gamer, came up with the idea after Yamek qualified for a west coast tournament last year but couldn't scrape together the funds to fly to LA.

Instead, they asked, why not build a Web-based service that allows gamers to connect with others, organize tournaments, and build relationships through a robust social media component?

The service was launched earlier this year as a closed beta site with 500 players, but quickly picked up an additional 500 after going public a little more than two weeks ago, Legeza says.

"When you go on the site you create a profile, you've got your friends and your wall that you can communicate with," Legeza says. "We've got different chat rooms and video chat rooms where you can share video and let other people watch you play in a competition. People have a space to come to where they can start communicating about something they're passionate about, share their experiences, provide content, upload photos, share video content."

The company had early help from Rocket Ventures, which invested an initial $100,000, and angel funding of more than $100,000. The company is in the midst of a $500,000 venture capital round as well.

Beyond Gaming currently has four employees.

Source: Tony Legeza, Beyond Gaming
Writer: Gene Monteith

Your fridge conked out and you need it fixed before the roast goes bad. Problem is, the repair company can't say exactly when a technician will be out. Does "sometime between 1 and 5 p.m." sound familiar?

TOA Technologies of Beachwood has tackled the problem by developing a system it says can schedule the repair technician, cable guy or TV installer in a one-hour slot with a 96 percent on-time rate.

On Tuesday, TOA released its 2010 Cost of Waiting Survey, which polled consumers in the U.S., Germany and the UK about their waiting experiences. TOA found that American adults wasted about 2.75 billion hours waiting in the past year � the equivalent of 1 million people being out of work for a year.

The cost to businesses is significant, says President and CEO Yuval Brisker, noting that 21 percent of respondents reported switching companies because of long waits. Nearly half called customer service to complain about their experiences � an additional cost to companies that contract with call centers.

TOA's approach rests on its ability to analyze individual employee performance to understand how long he or she will take for each assignment, Brisker says. Not only does TOA's solution generate employees' daily schedules, but it provides customer notification and tracking functionality, he says. All of which help service companies keep their customers.

Founded in 2003, TOA launched its services in 2004 and has raised $17 million in two rounds of venture capital, including assistance from two Ohio Capital Fund partners: Cleveland-based Early Stage Partners and Draper Triangle Ventures.

Brisker predicts current year revenues to rise 75 to 80 percent over last year. Meanwhile, TOA has grown from two employees in 2004 to 200 worldwide today � about 40 of which will staff the company's new headquarters building when it opens in Beachwood next month.

Source: Yuval Brisker, TOA Technologies
Writer: Gene Monteith

The algae may not be greener on the other side. Executives at Algisys LLC are looking at sites in Ohio for the Cleveland biotech startup's first manufacturing plant.

No timeline or other details about the site selection process have been disclosed.

Algisys specializes in cost-effective growth and harvesting of algae for the production of nutritional oils and high protein biomass. These " algal omega-3 oils" and high protein additives are used for the multi-billion-dollar supplement, food and beverage, pharmaceutical, pet food, and animal feed markets.

Current industry practice is to obtain the nutritional oils from fish, which eat algae.

Algisys has an exclusive global license on the intellectual property and technology created at Virginia Tech by Dr. Zhiyou Wen, its chief science officer, over a 12-year period.

Things are moving fast for the company incorporated in July, 2009.

"We have letters of intent from prospective customers, we are looking at manufacturing facilities in Ohio, we have secured new funding, and we will be one of the presenters at the Ohio Early Stage Summit VI put on by the Ohio Capital Fund," said Matthew M. Minark, vice president of business development.

Algisys has received funding from BioEnterprise in Cleveland, the Center for Innovative Food Technology in Toledo, and Tower Wealth Management in Shaker Heights.

Plus, this summer, Algisys got funding from the Cuyahoga County New Product Development and Entrepreneurship Loan Fund; this spring it was awarded a National Science Foundation Small Business Innovation Research Phase I grant.

Sources: Matthew M. Minarik and Charles L. Roe, Algisys LLC
Writer: Gabriella Jacobs

JumpStart, the Cleveland-based non-profit that provides resources to young companies throughout northeast Ohio, has been recognized for its economic development work by the State Science and Technology Institute.

JumpStart was selected by an independent panel of judges as the winner of the "Building Entrepreneurial Capacity" category of SSTI's 2010 Excellence in Technology-Based Economic Development Awards. The award was announced Sept. 15 at SSTI's annual conference in Pittsburgh.

It's the fourth year of the awards program and the second year JumpStart has received an award. JumpStart won last year for its work in increasing access to capital. Other categories include "expanding the research capacity" and "improving competitiveness of existing industries."

Ray Leach, JumpStart's chief executive officer, notes that "the work we do and the results we've achieved in building a robust entrepreneurial ecosystem is a direct result of the partnerships we've made with private organizations and public entities, especially the Ohio Department of Development and Ohio Third Frontier."

SSTI President and CEO Dan Berglund calls JumpStart "a remarkably effective program by and for entrepreneurs. Their efforts have bolstered the entire region through partnerships and collaborations with other organizations, and through programs that target underrepresented groups such as women and minority entrepreneurs."

JumpStart provides intensive entrepreneurial assistance, including selective investment in high-potential companies. Since its launch in 2004, JumpStart has assisted more than 36,000 entrepreneurs, leading to $17 million invested in 49 companies and a four-year economic impact of $267 million on northeast Ohio.

SSTI is a national nonprofit organization that works to strengthen state and regional economies through science, technology and innovation.

Sources: SSTI and JumpStart staff
Writer: Gene Monteith

Wendell Turner is no newcomer to the food service business, starting in 1981 in supplies and equipment and, later, as a packager and distributor of foods. In 1990, he discovered a gap in the ethnic foods arena and founded Heritage Fare, a successful, Atlanta-based packager and distributor of down-home Southern cooking.

Despite his previous successes, Turner was always looking for more volume.

"That's what led us to the Garrett Morgan program through NASA," he says. And that's how Cleveland-based HF Food Technologies was born.

The NASA program, which helps small businesses identify new technologies for commercialization, alerted him to a US Department of Agriculture-developed product that replaces existing fats with a substitute called Fantesk -- a mixture of starch, water, and one or more oily substances.

The value? The substitute can replace unhealthy fats in meats, pastries and other foods while preserving flavor, mouthfeel and reducing fat for consumers.

Now licensed by Turner's HF Food Technologies under the name Nutrigras, the substitute has made its way into the marketplace. Assisted with an initial $250,000 investment from JumpStart, HF Food Technologies is working "primarily with beef, pork and more recently bakery products," Turner says.

"If you could take a ground sirloin steak, you could take 15 percent of the meat block out and replace it with 15 percent of the Nutrigras," Turner explains. "And in bakery products, we've shown reductions of up to 80 percent in butterfat."

Turner, who is CEO of both HF Food Technologies and Heritage Fare, says the product is being sold through distributors and "we have a number of restaurants that are using the product. And we just received one of the most important certifications for us -- the Ohio Department of Agriculture."

HF Food Technologies is located in mid-town Cleveland, was formed in 2005 and currently has five employees.

Source: Wendell Turner, HF Food Technologies
Writer: Gene Monteith

A solar array gathers sunlight for electricity. But something has to convert that energy from direct current to alternating current before it can be fed into an electric power grid. Toledo-based Nextronex Power Systems says it has come up with a simpler and more efficient way of doing that..

Nextronex's target customers are utility-size solar installations. While competition is stiff, Peter Gerhardinger, the company's chief technology officer, says Nextronex has an advantage over suppliers that provide only inverters -- the box that converts DC to AC.
 
"They rely on the integrator to determine how he's going to wire it, how he's going to lay it out. And so there's spawned a whole lot of intermediate type products," he says. "We took a fresh approach and, based on customer feedback, decided there's a need for a wiring kit that is not only the inverter, but that combines all the switch gear, all the fusing, all the monitoring into an easy-to-assemble system."

The resulting cabinet is smaller than most in the industry, he says, and can be easily installed. Not just that, but rather than relying on only one big inverter, the Nextronex system uses multiple inverters that switch on and off as energy from the sun ebbs and flows during the day, resulting in less loss of power than typical one-box systems.

Nextronex's system is in use currently at the 180th Air National Guard base in Toledo and at a site in Roswell New Mexico, with another three projects nearing implementation. The company has received $1.4 million local investments, including those from the Science, Technology and Innovation Enterprises and Rocket Ventures, the venture capital arm of the Regional Growth Partnership.

The company was formed in 2008 and currently employs 10, says company founder James Olzak. But Olczak says Netronex expects to have "greater than several dozen people next year at this time."

Sources: James Olzak, Peter Gerhardinger and Scott Thompson, Nextronex
Writer: Gene Monteith

Those who run customer contact centers are constantly challenged with scheduling scores of agents to handle calls. While they may have a good idea of how many agents they'll need tomorrow, most can't predict with any accuracy how many they will need a week or two from now.

WorkFlex Solutions has developed software to do just that, says Larry Schwartz, Chairman and CEO of the Montgomery-based firm.
Schwartz formed the company last year with Mitesh Desai, two years after leaving Convergys to open a consulting firm.

The company's signature product, WorkFlex Manager, is based on the manufacturing industry's concept of real-time supply chain management. The turning point in forming the company was the convergence of Schwartz's idea with an application built earlier by Desai that was helping the hotel industry schedule rooms and rates. WorkFlex Manager is now in service with a major outsourcer, and a number of other clients are preparing to implement it, Schwartz says.

WorkFlex's potential has been recognized by the venture capital community, which has invested $1.5 million in the young company. CincyTech, which invested $250,000, led the round, making WorkFlex its 16th portfolio company.

The company currently employs two in North America, and another dozen in India. But as it grows, Schwartz says the company will add business development and marketing jobs, primarily in the Cincinnati area.

There also is the potential to leverage the company's workforce solution to create more call-center jobs here in Ohio and elsewhere in the United States, he says.

Source: Larry Schwartz, WorkFlex Solutions
Writer: Gene Monteith

Entrepreneurs, venture capitalists, angel funders and economic development officials will descend on Columbus Sept. 27 and 28 to network and to hear the latest developments within Ohio's entrepreneurial ecosystem.

Sponsored by the Ohio Capital Fund and the Ohio Third Frontier, the Ohio Early Stage Summit will focus on the vitality of Ohio's early stage companies and investors, says Paul Cohn, the Capital Fund's vice president and regional director.

While past events have provided an opportunity for a handful of early stage companies to pitch their services and products to potential funders, popular demand has led to an expansion of that portion of the summit on the event's first day.

"For the past two years, we had half a dozen companies make pitches during the conference," Cohn says. "That's resulted in companies actually getting funded. We've expanded that to a separate event -- a half a day leading up to the summit."

Other presentations and panel discussions this year will include the state of the Ohio Third Frontier and what capital needs continue to exist across Ohio.

"Now that the Third Frontier has been investing for a number of years in early stage companies, is there a need for some later stage money as these companies are starting to mature?," Cohn explains.

Another discussion will focus on minority early stage businesses and both the opportunities and challenges they face. And participants will hear about the state of venture capital in Ohio.

Cohn notes that about 350 people from throughout Ohio attended last year's event.

The summit is free of charge, but attendees should register by Sept. 22. That can be done by going here. 

Source: Paul Cohn, the Ohio Capital Fund
Writer: Gene Monteith

iSqFt has merged information technology with traditional bidding and construction planning methods to realize a 30 percent increase in revenue and a 230 percent jump in employment over the last two years.

Founded in 1993, the Blue Ash-based firm began as a client-based software firm, says Dave Conway, president and CEO. That started to change when the company became serious about leveraging the Internet.

The result was Internet Plan Room and Private Construction Offices.

"The Internet Plan room is a service for subcontractors to gain access to bidding projects," Conway says. "They get a list of the projects in their market area and are able to view those projects on blueprints, view the specifications, search queries and they can find the kind of projects they would like to bid on. We connect subcontractors to the general contractors who are actually bidding the job. And then the general contractors will use an online tool (Private Construction Office) to manage the bidding process so they can manage their documents, manage their data base of subcontractors as well as all the communications that occur during the bidding phase."

The technology improves business processes, which reduces costs and increases efficiencies and effectiveness, he says.

Not only has iSqFt been recognized as one of Ohio's fastest-growing companies, but as one of the best places to work. Along the way, employment has increased from 150 to 350 in the last two years.

The company has received both Ohio Third Frontier money -- $2 million in 2006 and another $1 million earlier this year to further develop its platform -- and venture capital from Ohio Capital Fund participants like River Cities Capital Fund, Chysalis Ventures, Tri-State Growth Capital Fund and Reservoir Venture Partners.

Source: Dave Conway, iSqFt
Writer: Gene Monteith

Rocker Bret Michaels has one. Patriots linebacker Tedy Bruschi has one. Beau Biden, son of Vice President Joe Biden, has one too.

What they have is a hole in the heart known as a patent foramen ovale, or PFO. It's a problem shared with millions of other Americans -- one that, left undetected, can lead to strokes and death.

Until now, detecting a PFO has required the skills of two physicians, use of a heart catheterization lab, mild sedation and a plastic tube shoved uncomfortably down the throat, says CardioX CEO Larry Heaton. That procedure is so uncomfortable that many patients refuse follow-up tests to determine if treatments have been effective.

But if all goes as planned, the Dublin-based CardioX will complete clinical trials this summer -- and next year begin marketing -- a siimpler process that requires only a small injection of dye into the blood, sensors attached to a person's ears and a tube into which a patient blows to open the flap covering the PFO. (Because blood passing through a PFO doesn't go to the lungs as it should, the dye will reach the ears ahead of schedule -- proving the existence of the hole).

CardioX, founded in 2008, has raised about $4 million in outside investments, including two rounds led by Reservoir Venture Partners and Early Stage Partners, respectively. The company has also benefited from angel funding led by Ohio TechAngels and $500,000 through the TechColumbus Regional Commercialization Fund.

"The combination of (state) initiatives, along with the source of capital, have combined to make a very nice climate for CardioX to stay here in this area," Heaton says.

The company has five full-time employees and a network of about half-a dozen outsourced or part-time people, Heaton says. More will come on board as the system goes to market.

Source: Larry Heaton, CardioX
Writer: Gene Monteith

Columbus-based DoMedia was founded in 2007 to help bring some order to the "out-of-home" media marketplace. Since then, it's tripled its employee base and is ready to ride the booming digital media wave.

Out-of-home advertising is anything out of the home on which you can place a branded message, explains DoMedia CEO Andy Mansinne. Bus huts, aerial banners, pizza boxes -- just about anything can be used as an advertising medium.

However, "it's very fragmented and very opaque and there aren't very many ways to get your arms around what's out there, measure its efficacy and then systematically and efficiently secure and purchase those media assets," Mansinne says.

DoMedia provides an online marketplace for finding, planning, buying and selling alternative, traditional and digital out-of-home media. Media providers (like billboard companies) use DoMedia to create detailed online profiles, while advertisers and agencies can use DoMedia's database to plan and build their out-of-home campaigns.

While traditional out-of-home is alive and well, "digital out of home has come screaming to the forefront in the last year," Mansinne says. Think of those big screens you might view while waiting in line at the movies -- "anything that can be delivered from an extended video format or even like Captivate, which is static art in elevators."

Mansinne says 400 agencies are now registered DoMedia users as well as 1,200 media sellers worldwide. The company has benefitted from funding led by Columbus-based NCT Ventures as well as support from the Ohio Third Frontier's Innovation Ohio Loan Fund -- DoMedia received more than $1 million from the fund for 2010, Mansinne says.

DoMedia has 10 employees today compared to three two years ago, and expects continued growth behind new services and the rise of digital out-of-home media.

Source: Andy Mansinne, DoMedia
Writer: Gene Monteith