LC Bulletin: Getting widgets to market

June 6, 2014. Retrieved online June 9, 2014 from Alta LeCompte, Las Cruces Bulletin

Region addresses need for startup funding

[Excerpts below reprinted with permission: Read the complete Las Cruces Bulletin article]

Like an aspiring actor heading for Hollywood in the heyday of film studios, inventor Jeffrey Scott came to Las Cruces in 2012.

He was pursuing the dream of producing micro algae for pharmaceutical and nutriceu­tical use.

But he needed capital to scale up and go into production with his company, Aztec Algae LLC.

With help from the Hub of Human Innovation virtual incubator in El Paso, Scott has fine-tuned his presentation and is pitching to potential investors.

National, state and local perspective

Although Scott meets the criteria of inves­tors, a pessimist might say he is seeking inves­tors at the wrong time and in the wrong place.

Beto Pallares, professional investor and investor residence at New Mexico State University’s Arrowhead Center, said New Mexico and the Paso del Norte region tend to lag behind the nation in terms of access to startup capital.

Since venture capitalists typically reject 98 percent of the opportunities presented to them, the odds for any would-be entrepreneur are membrane-thin, according to recent Las Cruces transplant Guillermo Figueroa, a ven­ture capitalist.

New Mexico did not rank in the top 30 states.

DNA analyst Cheryl Lowe works in the Forensic Testing Laboratory located at the Arrowhead Technology Incubator. In a $5.3 million deal representing successful commercialization of innovations developed by faculty at NMSU, the lab and sister companies Genetic Testing Laboratories and Clinical Testing Laboratories were acquired by BelHealth Investment Partners in summer 2013. (New Mexico State University photo)

DNA analyst Cheryl Lowe works in the Forensic Testing Laboratory located at the Arrowhead Technology Incubator. In a $5.3 million deal representing successful commercialization of innovations developed by faculty at NMSU, the lab and sister companies Genetic Testing Laboratories and Clinical Testing Laboratories were acquired by BelHealth Investment Partners in summer 2013. (New Mexico State University photo)

Creating capital at home

The state’s angel investors include 75 mem­bers of the New Mexico Angels.

Individual angels invest as little as $5,000, while angel groups typically fund up to $1 million.

Innovators seeking more money than an­gels invest but too little to appeal to venture capitalists have a special challenge.

“I do know there’s a vacuum in access to capital between $50,000 and $250,000,” Pallares said.

He said NMSU is looking into creating a fund or investor group to “fill that gap in our entrepreneurial ecosystem.”

In addition to the initiative underway at NMSU to marshal funding for innovators, leaders of the area’s economic development and technology innovation communities also are looking at putting together a fund based in southern New Mexico to jump start local tech­nology commercialization.

Beyond intellectual property

While some local innovators say the uni­versity is not organized to facilitate technology transfer, Arrowhead administrators say change is underway.

Arrowhead Center took over the technol­ogy commercialization function in 2004, said Jason Koenig, director of entrepreneurship and technology commercialization.

Services are offered through the Studio G incubator, serving students and recent graduates, and two programs open to innovators from throughout the state – the Arrowhead Technology Incubator and Arrowhead Innovation Network (AIN).

Arrowhead in transition

“We are leaps and bounds ahead of two years ago,” said Zetdi Runyan Sloan, director of the Technology Incubator and AIN coordinator. “There had been no concerted effort to commercialize technology.”

Pallares said NMSU has great strength in research specialties such as clean technology, solar and agriculture.

“I’ve seen some pretty unique and novel work,” he said. “My perception is that NMSU is poised to take a tremendous regional and state leadership role as it realizes its muscle.”

Others, such as Scott and Las Cruces technology innovator Richard Majestic think NMSU and other New Mexico institutions could do more to get good ideas developed within their walls out into the world.

Majestic has taken the bully pulpit to address the national labs, universities and state economic development department.

“Arrowhead should be funding and managing student R&D ideas or programs as long as professional, dedicated, compensated and qualified professors oversee the program,” he said.

Engaging with the regional community

At the Hub, director Cathy Swain promotes a broad regionalism that encompasses El Paso, Ciudad Juárez and southern New Mexico.

“My personal, adamant commitment is to be a regional asset,” Swain said, “removing barriers when it comes to regionalism.”

Swain is a regional collaboration adviser for Arrowhead’s AIN and Jorge Ramos, director of corporate development at Arrowhead, is affiliated with the Hub.

One role that centers such as Arrowhead and the Hub can play is finding potential investors who may want to fund entrepreneurs but don’t know where to look.

“They’re not stepping up and saying, ‘Do you have any ideas we can invest in?’” she said.

In order to identify potential investors and meet their other goals, technology commercialization centers need to become very active in the entrepreneurial community around them, Swain said.

“In one word: engagement,” she said.


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