AKRON, Ohio — After investing in a handful of early-stage companies, a student startup booster at the University of Akron is seeing the first fruits of due diligence.
On Wednesday, the Northeast Ohio Student Venture Fund accepted a check for $25,000 from Wastebits, an Akron company that designs software for the waste management industry.
The check was presented with some fanfare at a meeting of the ARCHAngels Network at Quaker Square. It heralded the first return on a NEOSVF investment.
Founded by UA graduate students in 2009, the venture fund is comprised of 16 student members who investigate proposals from startups. The students learn principles of business finance while some young companies get a financial boost.
“Our primary goal is to give students the opportunity to act like investors with real companies and real money,” John Myers, vice president of the venture fund and executive-in-residence of the University of Akron Research Foundation, told The Plain Dealer last April. “Students make the decisions.”
So far, good decisions.
After receiving the $25,000 loan last April, Wastebits has grown from three to 11 full-time employees.
“The NEOSVF provided us the needed funding to be able to accelerate our growth in 2014. Without their help, Wastebits would not be where we are today,” company founder and Chief Executive Officer Dan Collins said in a written statement this week.
NEOSVF expanded in 2014 to chapters at Case Western Reserve University, the College of Wooster, Kent State University, Notre Dame College and Walsh University.
The fund has received support from Burton D. Morgan Foundation and Ohio Third Frontier. In addition to Wastebits, its portfolio includes:
The Learning Egg
Event38 Unmanned Systems
Cleveland biotech startup heads west for venture capital
Entrepreneurs who complain that good ideas cannot find capital in Northeast Ohio might have another example with a fledgling biotech company that was showered with millions after moving west.
ChanRx left Cleveland for San Diego, accepted $30 million from venture capital investors, and changed its name to Laguna Pharmaceuticals, the Union-Tribune of San Diego reported this week.
The company was founded in 2006 in Garfield Heights, having spun out of ChanTest Corp, with the assistance of local business accelerator BioEnterprise. It’s conducting clinical trials of a drug to treat atrial fibrillation or flutter. The heart medication, vanoxerine, is a potential pain-free alternative to electrical defibrillation.
The newspaper quoted the new chief executive, Bob Baltera, as saying it was easier to find resources to exploit a bioscience innovation in San Diego.
“All the things you need … clinical people, finance people, lawyers familiar with this business, commercial people, you’re going to find them in three or four places in this country, one of which being San Diego,” Baltera told the newspaper.
Ray Leach, the chief executive of JumpStart, which invested $250,000 in ChanRx in 2010, said the company was clearly following the money. It moved to the hometown of its major funders.
“This was a very promising med-tech company that got a huge amount of money. But in order to get it, it had to move,” he said.
That happens to a lot of young companies, in a lot of cities, Leach said. But it’s not as common to Cleveland as many seem to believe. Of the 76 companies JumpStart has invested in during the past decade, only a small number have moved away, he said.
He noted that ChanRx chief executive R.K. Khosla stayed behind to live and work in Northeast Ohio and now has fresh capital to re-invest.
“I think we’re doing a whole lot better than I thought we’d be doing on this issue,” he said.