ny state governor 2011 economic development intiative · 2011 economic development intiative ......
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NY STATE GOVERNOR 2011 ECONOMIC DEVELOPMENT INTIATIVE
$785 Million NY State Grants, Regional Economic Development Council program
Meager Funds for Tech!!!!!!
NYC Seedstart Accelerator LLC : supports new technology companies
Catholic Health Care System : grant for e-medical records training
NYIT: grant to expand industry-academic partnerships
Accelerate Long Island: supports start-up technology firms
REGIONAL PRIORITIES
Source: Green Establishment Database and National Establishment Time-Series Analysis: Collaborative Economics.
ASEE 4-16-2013
Polaris: Proprietary and Confidential 6
POLARIS OVERVIEW
17 Polaris-founded companies · 475% IRR
18 medical products approved · 80 million lives touched
From 25 Universities/Institutes/Teaching Hospitals
UNDER MANAGEMENT $3.5B FOUNDED 1996 DIVERSIFIED
FUNDS 6
Pioneering companies Akamai (MIT) deCODE Genetics (Beth Israel/Harvard) WordPress (Automattix) Alnylam (MIT & Max Planck) AdiMAB (Dartmouth)
POLARIS ACCESS: UNPARALLELED UNIVERSITY CONNECTIONS
Return 4.5x
Companies spun out of academia
46 23 companies
161% IRR
13 companies
222% IRR
6 companies
105% IRR
Pervasis
IRR
176%
Returned to LPs
$900
TRANSFORM Cima/ Langer McGuire
AIR
Edwards/ Langer McGuire
AERO DESIGNS
Edwards McGuire
MOMENTA
Ram/ Langer Crane
VISTERRA
Ram Crane/ Bitterman
CERULEAN
Ram Crane/ Bitterman
BIND
Farokhzad/ Langer
Nashat
PERVASIS
Edelman/ Langer
Nashat MICROCHIPS
Langer/ Cima McGuire
T2
Jacks/ Cima
Nashat/ Crane
SELECTA Farokhzad/
Langer Nashat
SEVENTH SENSE
Langer Crane
ACUSPHERE
Langer McGuire
Polaris Family Tree
ADIMAB
Gerngross McGuire
SUSTAINX
Hutch McGuire
GLYCOFI
Gerngross/ Hutch McGuire
ALNYLAM
Schimmel/Sharp
ATYR
Yang/ Watkins Nashat
SIRTRIS
Sinclair/ Westphal
Crane/ Bitterman
GENOCEA
Sinclair Bitterman
CUBIST
Schimmel McGuire
KALA
Hanes Bitterman
46% IRR
56% IRR 105% IRR
Westphal
TARIS Cima/ Langer Bitterman
KREOGENE
Gerngross McGuire
Proprietary and Confidential 8
ARSANIS
Gerngross McGuire
PULMATRIX
Edwards/ Langer McGuire
ARSENAL
Langer/ Whitesides
McGuire
480
Langer/ Whitesides
McGuire
Xtuit Langer/Jain Crane
POLARIS FAMILY TREE
SUSTAINX
Hutch McGuire
AVITIDE
Gerngross McGuire
En
Polaris Family Tree
105% IRR Proprietary and Confidential 9
POLARIS DARTMOUTH FAMILY TREE: POTENTIAL LIVES TOUCHED
Energy Storage >2B
SUSTAINX
Protein drugs > 1B
GLYCOFI
Cancer & autoimmune disorders > 100M
ADIMAB
KREOGENE
Infectious Diseases > 50M
ARSANIS
AVITIDE
Protein Therapeutics >1B
ASEE EDI Conference
Habib Kairouz
Managing Partner
Rho Capital Partners
Rho Ventures
• 30 year old Venture Capital Firm – Evolved from a family office to an institutional manager in 1993
– Principal activities: Rho Ventures and Rho Fund Investors
• Stage and Sector Agnostic Investment Strategy – Seed to Growth Equity; average cumulative investment of $25mm
– Information Technology, New Media, Communication, Alternative Energy, Biotech
– Offices in New York, Palo Alto and Montreal
– 6 US Funds and 2 Canadian Funds
– Latest Funds: RV VI: $500mm in the US and RC II: $100mm in Canada
• Habib Kairouz – Managing Partner
– 20 years with the firm
– Focus on IT, New Media and Communication
– Select Past NY Transactions: iVillage, Tacoda, OMGPOP, Intralinks, EverydayHealth
Our Experience with Universities
• Overall limited, and mostly in Biotech and Alternative Energy
• In Information Technology and New Media, mostly working with students launching ideas post graduation rather than with the university itself – Tripod: Williams
• Select Deals: – Anacor: Penn State and Stanford
– Solarbridge: University of Illinois
– Enerkem: University of Sherbrooke
– Nuventix: Georgia Tech
Current Experience with East Coast Universities
Encouraging Signs
• Growing interest and initiatives from universities: – Cornell campus in NY
– Columbia and NYU Business Plan competitions
• Rising student interest fueled by: – Tough job market
– Renewed enthusiasm for startups
– Declining capital requirement to launch a startup
• This conference
Frustrations
• Still too many binders of research and patents vs business plans
• Most business plans driven by graduating students vs university initiatives
• Seeing more commercial facing initiatives out of business schools than engineering schools
Recommendations and Wish List Based on Numerous Meetings with Individuals in Universities
• Initiative has to come from the top: The Dean’s Office
• University and Faculty buy-ins are critical
• Faculty and Students need to follow a structured research path towards commercialization with spinout and funding as objectives
• Licensing office should be very efficient
• Business Schools students should be involved to turn deep science/research into business plans with a value proposition towards addressing large markets and … attracting VC funding
• Present VCs actual business plans vs patents, through structured events and forums
THIS IS A RHO WISH LIST. NO SIZE FITS ALL.
Somak Chattopadhyay, Partner April 16, 2013
ASEE Meeting New York City
TVP is an early-stage venture capital firm that partners with world class
entrepreneurs in New York leveraging emerging technologies and
business models to create and disrupt huge markets.
Information Technology Innovation:
From Core Tech to Applied Tech
1960s Mainframe
1970s Minicomputers
1980s Personal Computers
2000s Internet, E-commerce 1.0
1990s Client/Server
2010s Mobile, Cloud, SaaS, Social
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Numerous market leading tech companies emerged out of Boston and SV university
ecosystems
Boston: Teradyne, DEC, Akamai
Silicon Valley: Google, Sun, HP, Yahoo
NYC tech exploding but most startups do not come out of university ecosystem
Corporate drop-outs, spin-outs, incubators
Industries in contraction influencing more people to start their own companies
Clusters of innovation much more fragmented and occur around industries (finance,
media, advertising) vs. university labs
Not concentrated geographically in same way as Silicon Valley or Boston
In Silicon Valley and Boston, engineers who come out of university often start businesses
and recruit business people later. In NY, it’s reverse (huge opportunity for engineering
schools)
Innovation in NYC tech is often in application, content, data layer vs. core tech that is more
reliant on university IP (storage, hardware, medical devices, natural language search)
Tech Innovation and Academia: NY metro vs. Silicon Valley and Boston
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Tech entrepreneurship has not (until recently) been a major focus
Major employers who have hired grads in NYC historically came from legacy
industries (media/publishing, finance, etc).
No culture of collaboration between depts or coordinated outreach with industry.
Lots of fiefdoms and bureaucracy
Very little knowledge sharing and cross-pollination of ideas among schools
Universities marketing “entrepreneurship” as a strong focus vs. actually investing in space
Cost of tuition has skyrocketed over last 10 years – very difficult for students to take plunge
with soaring student debt
Local schools doing inadequate job of training engineers for tech startups
Gap starting to be filled by accelerators and tech schools like General Assembly
Over-reliance on traditional programs in classroom vs. other programs (online, on-site)
Challenges with Today’s
Engineering Schools in NYC
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Technical Co-founders –most common complaint of any NYC tech entrepreneurs
Universities could play a key role in helping connecting students/alumni
Few technologists trained in key skills needed for startup tech leadership
Knowledge of agile software development techniques
Thinking architecturally -how decisions impact UX, scalability
Recruiting/managing/retaining engineers
Communicating with non-tech business leaders or investors
How do you translate business requirements into roadmap
How do you make case for key product decision by communicating business
value vs. technical mumbo jumbo or focusing on features?
Understanding startup career paths– sales, prod mgmt., CTO, as well as career
progression/comp (what are stock options, how is startup wealth created?)
Why are there not more programs focused on engineering practice school like those that
exist at MIT/Stanford– merging academic theory with real-life experience in larger and
smaller tech companies?
Human Capital Challenges and Opportunities for Engineering Educators
My Wish List for Engineering
Educators Spend more time with local tech companies to understand key hiring needs and invest more in
courses and faculty that will offer students practical experience (ex. Practice School)
Sponsor internships at local tech companies (ex. Turing Fellows Program or HackNY)
Help those of us in industry better understand how to use university resources for our own
companies –Encourage knowledge-sharing across departments and between undergrad/grad
Help us connect our companies with university technical talent of all levels –students, alumni,
faculty. Provide better ways of identifying top startup talent –decoupling credentialing from learning
Teach students key skills outside of engineering theory
Communications, Design, Management
Business Plan Competitions – great opportunity to collaborate across schools
Understanding of key tech industries in NY – advertising, fin tech, healthcare IT, e-commerce
Offer cost-effective corporate training for engineers ( similar to General Assembly or via MOOCs)
Invest in multiple sources of instruction -online, offline, group collaboration and find ways to keep
tuition costs low. Price to value of undergrad, grad or executive education is not sustainable -
forcing many students to avoid startup careers
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