High-tech start-ups could get a boost
NEWS BUSINESS REPORTER
A Cleveland-based nonprofit with a record of success turning that community's medical research into high-tech businesses is joining forces with a consortium of 19 western counties in the state in an attempt to replicate the experience here.
JumpStart Inc. and the Erie County Economic Development Agency are the lead organizations of a project -- the Regional Entrepreneurship Action Plan -- that has received a $445,000 federal economic development grant and raised another $230,000 from area organizations and businesses.
As explained by Al Culliton, CEO of the ECIDA, the purpose of the project is to create a business plan that will give high-tech start-ups from Syracuse to Rochester to Buffalo access to the public and private capital and the management expertise necessary to turn research and ideas into profitable businesses. To get them, he said, "from the napkin stage to sustainability."
The creation of the partnership and the awarding of the grant from the U.S. Economic Development Administration were announced at a gathering Wednesday at the New York State Center of Excellence in Bioinformatics and Life Sciences at the downtown Buffalo Niagara Medical Campus.
"We have had a venture capital fund at ECIDA for 16 years," Culliton said, "and we have consistently watched businesses fail because they lack capital, they lack experience and they lack support."
Marnie LaVigne, director of business development at the Center of Excellence, said the result of the grants and the 12-month project will not be just another study, but a plan of action that will match marketable ideas with the investors and the business-minded managers who can turn those ideas into ongoing businesses.
"This is not just another planning study," LaVigne said. "This will be a business plan with all the key pieces we will need to enter the entire entrepreneurial ecosystem."
LaVigne said that JumpStart, established in Cleveland in 2004, has provided 84,000 hours of free technical advice to high-tech start-ups and raised $17 million to invest in 49 of those firms. JumpStart clients, she said, have gone on to raise $300 million in capital and create more than 800 jobs. It has since launched similar operations in Michigan, Indiana and Minnesota.
The federal money is from a Department of Commerce program that has long provided funding for economic development, with a focus on helping areas in economic distress. LaVigne said that, under the Obama administration, the emphasis of the program has shifted from mostly providing physical infrastructure -- roads and utility access -- to investment infrastructure, such as writing business plans and attracting private capital.
The money to match the federal grant came from Buffalo's John R. Oishei Foundation, the University at Buffalo, National Grid, ECIDA, Excell Partners, High Tech Rochester and Greater Rochester Enterprise.
Robert Gioia, president of Oishei, compared Wednesday's announcement to the foundation's decision in 2000 to provide a $100,000 seed grant to what was then known as the High Street Project, and has since become the Buffalo Niagara Medical Campus.
"Tens of millions of dollars in investment have come to the campus since then," Gioia said. "The infrastructure is now in place. We have the scientists. What we need now are the entrepreneurs."
Culliton credited the area's congressional delegation -- Reps. Brian Higgins, Chris Lee and Louise M. Slaughter and Sens. Kirsten Gillibrand and Charles E. Schumer -- with helping to secure the federal funds. Higgins said that the success of the new medical campus, combined with the long-standing work ethic found in the Buffalo area, impressed the federal officials in charge of allocating the money.
"What's going on here at the Buffalo Niagara Medical Campus is extraordinary," Higgins said. "It is creating jobs. It is creating a demand for housing."
The counties participating in the project are Erie, Niagara, Chautauqua, Cattaraugus, Orleans, Genesee, Wyoming, Allegany, Monroe, Livingstone, Wayne, Ontario, Yates, Seneca, Cayuga, Oswego, Onondaga, Courtland and Madison.