Financial Services : Innovation + Job News

Mid-level minority and women-owned businesses can often access financing through debt but not through equity investments. To remedy that problem, The Enterprise Center (TEC) has launched the Performance Fund through its Capital Corporation.

According to TEC, a Federal Reserve Bank of New York study revealed that "low-income populations and communities of color were being forced to engage in high-cost financing options for themselves and their businesses, as a result of limited access to basic financial services." This gap is due to a lack of community banks where they’re most needed and inequality in lending practices.

"Traditional [venture capitalists], they don’t look at deals that require less than $3 million," explains Chris Chaplin, TEC Capital Corporation director of public and private capital. "To a great extent, we recognized that there was a demand -- a need in the marketplace for companies to get at least some access to equity to take it from one level to another."

The funds for TEC’s first two Performance Fund equity investments came thanks to a grant from the U.S. Department of Health and Human Services (HHS). One of them is a $211,000 investment in Jidan Cleaning LLC, owned by Patricia Claybrook, with offices in Medford, N.J., and Philadelphia.

When vetting companies for these inaugural investments, TEC targeted businesses with revenue of at least $250,000 annually.

"A lot of these companies, they can get debt, but they need equity support to take it up to the next level," says Chaplin. For most women-and minority-owned businesses of this size -- already hampered by a lack of financial and social resources more easily accessed by white male entrepreneurs -- "getting equity is next to impossible."

TEC helped to finance Jidan’s growth in the past with a loan, which the business serviced well. The company has a long relationship with the West Philly organization: They clean its building and those of its partner organizations.

"What we’ve found is they’ve been growing rapidly," with larger and larger contracts, says Chaplin. "We recognized Patricia needed some financial support…but we didn’t want her to be caught in a situation where she was just servicing debt."

Over a three-year period, the $211,000 equity investment will help Jidan grow its full-time staff by 14, its part-time staff by 17, and provide benefits to employees. Chaplin predicts that with this investment, the company will surpass TEC’s staffing estimate.

"The focus of our work with HHS with these investments is not only to create wealth," he adds. "The real focus is to create jobs...sustainable jobs with benefits."

TEC is already looking toward the next cohort of Performance Fund recipients. While TEC may approach HHS with its decision by the end of April, the new cohort won’t be announced until September. 

Writer: Alaina Mabaso
Source: Chris Chaplin, The Enterprise Center

On February 4, Mayor Jim Kenney joined Mt. Airy USA Executive Director Brad Copeland and others for the official launch of the Philadelphia Immigrant Innovation Hub at 6700 Germantown Avenue.

In his remarks to the diverse crowd of immigrant entrepreneurs, funders and other supporters, Kenney called the room "a beautiful sight."

"This is what Philadelphia looks like," he said. "And this is what the country should look like."

Copeland added that a support and co-working hub for Philly's immigrant entrepreneurs was "very Mt. Airy" -- the neighborhood is already extremely diverse and civically engaged. He praised Hub members’ commitment, drive, energy, vision and "willingness to take risks."

The Hub was made possible by a 2015 Knight Foundation Cities Challenge grant. Speakers credited former Mt. Airy USA leader Anuj Gupta for the inspiration to pursue these dollars for the project. Out of 5,000 applications last year, there were 32 winners -- seven of those from Philadelphia, the most winners from any city in the country.

"[Knight] allows organizations like ours to dream crazy dreams and then challenges us to make them a reality," enthused Copeland.

Sarajane Blair and Jamie Shanker of Mt. Airy USA outlined the new space's offerings, which are made possible with additional financial support and guidance from the nonprofit community lender FINANTA. Services will include "core workshops" (offered through a partnership with the Welcoming Center for New Pennyslvanians), individual business and financial plan development, credit building tools, and community support and engagement helmed by Mt. Airy USA. Hub members will also have access to a co-working space on Germantown Avenue, five financial lending cycles a year, and dedicated networking programs.

"We will do everything we can to help you succeed," said Blair to program participants.

Those eligible for the program must be immigrants to the U.S. who want to be self-employed and have a business idea or plan, but need assistance in starting or growing their business. Applicants can head to piihub.org to get started.

Writer: Alaina Mabaso
Sources: Philadelphia Immigrant Innovation Hub launch speakers
 

What do Philly's women business executives have to say about their career journeys? To answer that question, the nationally operating CPA firm Citrin Cooperman hosted an inaugural "Women at the Wheel" forum at the Union League of Philadelphia. The January 21 event featured four of the city's most notable business leaders telling their stories and taking questions from the crowd.

Julie Coker Graham, a former Hyatt Regency Philadelphia general manager, is the new president and CEO of the Philadelphia Convention and Visitors Bureau. Suzanne S. Mayes, a 2012 Alice Paul Equality Award winner and leader at several women’s initiative organizations, is the chair of the public and project finance group at Cozen O’Connor. They were joined by Cheltenham native JoAnne Epps -- currently dean of Temple’s Beasley School of Law, she was appointed by Mayor Michael Nutter to chair the new Police Department Oversight Board and earned the Philadelphia Bar Association’s Justice Sonia Sotomayor Diversity Award. Catherine M. Cahill completed the panel. Originally a musician, she has had a distinguished career in arts administration and been the president and CEO of the Mann Center for the Performing Arts since 2008.

Citrin Cooperman partners Mary Brislin and Colleen S. Vallen moderated the panel.

In her opening remarks, Vallen noted that only about thirteen percent of U.S. business board and executive positions are held by women (though in local healthcare and higher education sectors, that number has topped twenty percent).

Graham touted her lifelong "passion for hospitality." Just a few decades ago it was virtually unheard of for a woman -- especially an African-American woman -- to pursue a four-year degree in hospitality management.

"The culinary scene here is just exploding," she said of moving Philadelphia in 2007.

Mayes spoke about her formative years at an all-girls high school where a you-can-do-anything attitude wasn’t aspirational or visionary, "it was a fact," with women leaders on sports teams and in school clubs. She took this attitude with her to college, where she remembers a "five-minute meeting" with her male undergraduate advisor -- she wanted to discuss her grad school options. He told her to focus on finishing college, not going to business or law school.

"Happily, I didn’t listen to him," she recalled, earning her law degree from the University of Pennsylvania.

"It didn’t occur to me that African-American women could run anything," said Epps of her school days; she thought becoming a legal secretary would be the apex of her career. She remembers her own mother, whose school counselor "laughed until he cried" when she said she was interested in medical school and put her on a secretarial track instead. Epps herself went on to attend Trinity College just after it became co-ed and was greeted on her first day with signs that read, "Co-eds go home, we hate you!"

But her years there were successful, leading to a prominent legal career.

"Be vigilant as to what is happening to us, and be vigilant as to what is happening to others," she advised attendees on improving gender parity in the workforce.

Cahill, a Temple undergraduate and Drexel graduate alum, has managed major music institutions such as Lincoln Center’s David Geffen Hall, the Dallas Symphony, the New York Philharmonic and the Toronto Symphony before landing in Philly. She touted a recent "sea change" in the world of leadership for women.

The panel took several audience questions, including one about coping with "imposter syndrome" in high-powered jobs.

"It’s about recognizing the moment of self-doubt," said Mayes. "What do you do about it?" There’s no such thing as a work-life or mom-career balance, she continued. Instead, it’s about "integration" with the right personal and professional support.

Writer: Alaina Mabaso
Sources: Citrin Cooperman Women at the Wheel speakers
 

In December, the Enterprise Center (TEC) in West Philly announced a special program to augment their 25-year mission: giving local women- and minority-owned businesses the tools they need to grow. TEC is one of only seven organizations nationwide -- and the only one in Philly -- chosen to receive over $1 million in federal funds through the U.S. Small Business Administration's ScaleUp America Initiative.

According to TEC, ScaleUp provides "growth-oriented" small businesses with a targeted twelve-week curriculum and six months of one-on-one mentoring from experts aimed at developing a three-year strategy. TEC narrowed the field of applicants down to 25 businesses featuring minority owners or executive managers.

Iola Harper, TEC's executive vice president of business programs, says that the companies served by TEC and ScaleUp America are often "sandwiched" between early startups "in the idea phase" and large firms that can attract venture capital. To qualify for participation in the ScaleUp program, businesses had to have local impact and have proven themselves in the market via $150,000 to $700,000 in annual revenue.

"We call them scalers," says Harper, and they are often neglected in the venture capital world.

One marker of companies like this is a relative lack of managerial experience, in addition to inadequate access to capital and technical assistance.

"I find that these businesses tend to work in their business and not on their business," explains Harper. "So this program forces the participants to step out of their businesses," encouraging management to look at the big picture: business goals, scalability and understanding the numbers.

The ScaleUp initiative is a mentoring curriculum, but another component of working with TEC is the access to capital. The organization can make in-house loans of up to $200,000 to qualified participants, and if a business’s capital needs exceed that, there are banking partners on hand.

Harper is excited about "the fact that these are all local or minority-owned firms, and they’re typically the pool that has the hardest time accessing these services that we’re offering."

That difficulty is two-fold: Not only does TEC focus on women and minority entrepreneurs who get a smaller percentage of America’s venture capital in general, but it also targets companies outside of the tech and pharmaceutical realms. Current ScaleUp participants include food, manufacturing, personal service and construction businesses.

TEC is focused on ventures that "bring a lot of social capital to our community," enthuses Harper. "They bring a lot of intellectual capital to our community, and most of all they bring jobs to our community."

Writer: Alaina Mabaso
Source: Iola Harper, The Enterprise Center
 

When Flying Kite last looked in on Kiva City Philadelphia, the crowdfunding platform had disbursed $200,000 to 50 local independent businesses. Now as the initiative celebrates its first anniversary, that has jumped to 71 loans totaling $318,000 – and manager Alyssa Thomas (who works out of the City’s Department of Commerce) estimates the program will approve up to seven more campaigns by the end of the year.

Kiva is a micro-loan service that caters specifically to aspiring entrepreneurs who lack access to traditional banking and fundraising avenues. Many of them have low incomes or are new arrivals to the United States. The Kiva system utilizes trustees -- such as local community development corporations (CDC) or neighborhood stakeholders -- to discover and sponsor recipients. Crowdfunding campaigns are then run through the Kiva site for $500 to $5,000.

This fall, Thomas has been taking a lot of “corridor walks,” touring commercial stretches throughout the city alongside CDC corridor managers.

"We talk to the businesses that we already know are in need of financing and would be good fits for Kiva," she explains.

A current campaign that stands out for Thomas is Cambodia native Chany's new venture Angela’s Boutique at 454 Wyoming Avenue (between Olney and North Philadelphia).

Chany and her nine siblings pulled together to support the family very early in life. Her father died when she was 12 and her mother, who was disabled, couldn’t support them on her own. The kids worked before and after school at a corner store they launched themselves.

After Chany married a U.S. resident and arrived here at 21, she and her husband had almost nothing. He worked in a factory; she used her sewing skills and took ESL classes. She also operated a Chinese food stand for a few years, but in 2008 decided to purchase the dry cleaner’s on Wyoming, which she and her husband now operate in addition to working four other jobs between them. Six months ago, with the help of the nonprofit Esperanza (one of Kiva’s new collaborators), Chany decided to pursue a longtime dream: opening her own custom formalwear boutique named after her daughter Angela. A campaign now live on Kiva’s site aims to raise a loan of $5,000 toward new signage, lighting and security for her storefront. 

On December 4, an anniversary party at the Center for Architecture honored the New Kensington CDC as Kiva City Philadelphia’s most valuable trustee of 2015 -- they sponsored the highest number of loan recipients, with a repayment rate of 100 percent.

According to Thomas, one continuing struggle is connecting an online micro-finance platform to entrepreneurs who may not have digital fluency or access to the Internet, an issue many low-income Philadelphians face.

"We’ve definitely seen the toll of businesses not being connected to the Internet," she says. Those that aren’t on Yelp or Google Maps suffer. "You don’t know they exist and it really stunts their growth."

Philly’s Kiva pays special attention to the trustees’ role of shepherding loan recipients through the online application and repayment process.

"It’s difficult, but we’ve learned now to work through it so it’s no longer a hurdle," adds Thomas. And ultimately, helping these business owners take their first steps online will benefit them in the long run. "[This] will inspire them to want to figure out how they can utilize those resources to grow their businesses.”

Writer: Alaina Mabaso
Source: Alyssa Thomas, Kiva City Philadelphia

Ten early-stage companies in Greater Philadelphia are at work on innovative projects, and they're getting a boost from $2 million in new investments from Ben Franklin Technology Partners of Southeastern Pennsylvania. 

Atrin Pharmaceutical is a Bucks County biopharmaceutical firm that centers its research on the treatment of cancers lacking effective therapies. Its technology will advance drug development for the treatment of solid tumors including breast, pancreatic, lung, ovarian and colon cancers.

Decision Simulation in Chester County is the creator of DecisionSim, a simulation-based learning platform that enhances decision-making by allowing organizations to easily create assessment, education and training programs. Leveraging adult learning and gaming concepts, DecisionSim allows custom learning experiences to be developed while evaluating the decisions of learners, and collects valuable objective behavioral data to allow for a greater understanding of decision-making.

H2Odegree (H2O) in Bucks County is a manufacturer of wireless sensors and Software as a Service (SaaS) that provides solutions for measuring, controlling and billing utility costs in apartments, allowing landlords to improve their overall financial performance. The company’s target market is multi-family housing customers who use the company’s products and services for tenant billing and energy conservation related to water, electric, gas, btus and thermostat controls. H2O has over 38,000 sensors installed in 13,000 apartments in over 130 properties throughout North America.

MilkCrate in Philadelphia engages and rewards users who want to live their values by providing sponsored civic and commercial opportunities related to sustainably. Its app serves as a central digital hub for municipalities, businesses and organizations to reach conscientious consumers with relevant and tailored information.

Philadelphia’s Pico is a real-time engagement tool for brands, allowing them to engage with fans during events through the fans' pictures. All fans' pictures are automatically uploaded to the brand’s Facebook Page. Using Pico’s auto-tagging abilities, a real bond between the fan and brand is created.

In Bucks County, PrescribeWell is a new Platform-as-a-Service that enables physicians, healthcare providers and integrated health systems to seamlessly implement a turnkey, self-branded prevention, wellness and obesity intervention business in their existing practice. Customers license the company’s "white label" solution as their own, enabling them to generate significant new revenue streams that leverage the changes in healthcare reimbursement policy for physicians in preventive medicine.

In Philadelphia, RistCall helps hospitals and skilled nursing facilities improve patient safety and satisfaction scores by updating traditional wall-mounted nurse-call buttons with wearable technology devices. RistCall currently focuses on reducing patient falls and improving hospital/patient satisfaction.

Philadelphia’s Textizen provides mobile technologies for public engagement. The company makes it easy for government, organizations and companies to connect with people on the device they use most -- their mobile phone. The platform sends, receives and analyzes text messages. Administrators can click one button instead of making 10 or 10,000 phone calls, and use real-time dashboards to inform policy changes or deliver better customer service.

TowerView Health in Philadelphia helps chronically ill patients manage complex medication regimens. Patients using TowerView’s service receive pre-filled medication trays that insert into a connected pillbox, facilitating complex regimens with preformed ease -- its akin to a single-serve coffee machine. The connected pillbox senses when patients forget medication doses and sends automated text message or phone reminders to patients and their loved ones.

Viridity Energy in Philadelphia, a software technology company focused on total energy management, has a software and technology platform that allows commercial and industrial users to identify inherent load flexibility in their operations and monetize it. The company says its"“software turns energy profiles into financial returns"” transforming how energy customers interact proactively and productively with the electric grid.

Source: BFTP/SEP
Writer: Elise Vider

The next wave of Bitcoin growth just got closer to shore with the announcement that AlphaPoint, a financial tech platform provider, has been selected by Bitfinex, a major digital currency exchange, to enhance its backend technology.

AlphaPoint, with offices in Philadelphia, New York and San Francisco, also recently announced $1.35 million in funding, including $250,000 from Ben Franklin Technology Partners of Southeastern Pennsylvania. 

Bitcoin, the most widely used digital currency with an estimated market value of $5 billion, experiences about 80,000 transactions a day. Bitfinex claims to be the largest U.S. dollar/Bitcoin exchange.

AlphaPoint's Exchange Platform is capable of processing nearly a million transactions a second.

"By offloading some of the backend functionality to the AlphaPoint Exchange Platform, Bitfinex can focus on strategic goals and its most important asset: customers," says Vadim Telyatnikov, a Philadelphia-based serial entrepreneur who joined AlphaPoint as CEO this summer. "As the digital currency market matures, our solutions allow organizations -- from powerhouse players like Bitfinex to startups looking to launch an exchange -- to remain one step ahead of the market."

The $1.35 million in funding will enable AlphaPoint to "significantly increase our development team and assist with our international growth; a large portion of those hires will be made in our Philly office," says spokesperson Natalie Telyatnikov. 

"The applications for digital currencies are just starting to take shape and we're at a key turning point," adds Vadim. "AlphaPoint will continue to help accelerate the growth of this industry by empowering businesses with the ability to provide every person in the world easy access to buy and sell digital currency.”

Source: Natalie Telyatnikov, AlphaPoint
Writer: Elise Vider
 

After five years of planning and building membership, the Kensington Community Food Co-Op (KCFC) is ready to sign a lease. Their current campaign, 60 in 60, aims to bring 60 additional members to KCFC in 60 days, and to secure enough funding to ensure holding costs. If these goals are met, KCFC will open a location in 19125 early next year.
 
"It's going to provide healthy, quality food to the community," says Lena Helen, president of KCFC. "No grocery store in the area is committed to doing that completely."
 
To assist the membership drive, KCFC is holding two meet-and-greets this month: the first was held November 4 at Pizza Brain and Little Baby’s Ice Cream and the second will be November 21 at Adorn Boutique. The co-op also holds bi-weekly marketplaces at Circle of Hope church on Frankford Ave. The evening marketplaces give new and prospective members the opportunity to ask questions about healthy foods.

KCFC plans to increase educational activities once the permanent location has been established. Due to the density of low income residents in the surrounding neighborhoods, the co-op expects to offer food access programs such as "Food for All," a neighborhood fund for subsidized memberships. 
 
KCFC is supported by local organizations including the East Kensington Neighborhood Association and the Norris Square Neighborhood Project. The New Kensington Community Development Corporation helped the co-op raise initial funds and conduct a feasibility study. KCFC has also held marketplaces at Greensgrow Farms and staffs a booth at Greensgrow events.
 
Source: Lena Helen, Kensington Community Food Co-op
Writer: Dana Henry

The fifth annual Regional Affinity Incubation Network (RAIN) Conference, held June 24 at the University City Science Center Quorum, kicked off with a simple request. Wayne Kimmel of SeventySix Capital asked the audience -- which featured entrepreneurs, investors and thinkers from across the region -- to forget about task forces and meetings. Instead, he wanted every attendant to show one local college student a piece of Philly.

"It's about engaging young bright minds," said Kimmel. "That's the amazing opportunity."

RAIN is a network of research parks and business incubators, including the Science Center, Select Greater Philadelphia, Ben Franklin Technology Partners, the Delaware Emerging Technology Center and the New Jersey Economic Development Authority. The conference launched in 2009 with the goal of fostering support for entrepreneurship in the tri-state area. It has grown from 40 to 100 attendees, including many local entrepreneurs.

This year's event, dubbed "Supporting Startups: Capital, Community and Collaboration," featured two panel discussions. The first delved into first-round funding and crowdfunding; the second looked more broadly at startup resources such as StartUp PHL and other local support organizations.

"Every startup needs funding, funding and funding," said Jeanne Mell, VP of marketing and communications at the Science Center. "But the options that are available are changing rapidly, especially in light of crowdfunding."

At several points, speakers identified a growing number of coworking spaces, incubators and networking channels that are changing the face of Greater Philadelphia.

"These formal organizations have been joined by coworking spaces and other spaces of cohabitation for startups," explained Thomas Morr, president and CEO of Select Greater Philadelphia. "It's very exciting."

The University City Science Center has partnered with Flying Kite to showcase innovation in Greater Philadelphia through the "Inventing the Future" series.

Source: Wayne Kimmel, SeventySix Capital Jeanne Mell, VP of Marketing and Communications at the Science Center, Thomas Morr, President and CEO of Select Greater Philadelphia
Writer: Dana Henry

On the path from breakthrough to cure, clinical trials present a conundrum: When one is successful, the next one gets bigger, more expensive and ultimately more challenging.  
 
Greenphire, a company that first won big name pharmaceutical clients by helping automate payrolls for clinical trials, is continuing to mitigate that problem. The King of Prussia-based company is partnering with international corporations IMS Health and Oracle Health Sciences to bring payment management solutions to the rest of the workflow process.
 
"We're working towards developing a whole system," explains Shana Jalbert, director of marketing. "It's part of a broader strategy to meet the entire financial [picture] of clinical trials so clients can focus on the trials themselves."
 
The expansion couldn’t have come at a better time. Clinical trials are increasingly global and one trial can have hundreds of sites. Those in charge of operations must negotiate multiple currencies, taxation policies and regulatory compliances at a cost of up to $125 per payment. Additionally, the Sunshine Act now requires trials to track and report every expenditure.
 
Greenphire's software, eClinicalGPS (Global Payment Solutions), executes and records complex payments. When added to IMS-Health's budgeting services, the product provides a platform for spending analysis. If a certain number of MRIs are needed, for example, IMS-Health can set the cost expectation and Greenphire will deliver the reality. eClinicalGPS is also expected to round out Oracle Health Science's remote data capturing services -- used to track real-time costs -- by automating necessary payments.
 
"We're making that connection between the different phases of clinical trials, from planning one to actually running one," says Jalbert. "Clients have access to all the analytics, so they can actually see how it's going."
 
In their sixth year, Greenphire has acquired over 300 clients, including several top 20 pharma companies. The company has grown its revenue by 300 percent in the past three years; they recently opened an office in London and are actively seeking Python developers for their Philly team.

Source: Shana Jalbert, Greenphire
Writer: Dana Henry

It's a big year for Drexel University's LeBow College of Business. The school is gaining a brand new twelve-story 177,500-square-foot building, launching an innovative student investment program and fostering the Dragon Fund, now one of the largest student-managed investment portfolios in the country.
 
The Fund -- which launched during the 2007 to 2008 school year with $250,000 from Drexel's Office of Endowment -- is managed by about 20 students enrolled in advanced finance classes. The group changes each academic quarter. Over the past five years, these student-analysts have earned over $200,000 in returns, despite the recession.
 
With additional contributions from the University, the fund now controls a record $1 million.
 
"It's very difficult to get experience in investment," says Daniel Dorn, associate professor of finance at LeBow. "Industries look for people with experience already. We wanted the students to get exposure."
 
To make the most of their gains, Lebow held ArchiTECH, a competition that paired students with faculty to develop best-uses for the new building. The winning team -- which included Dorn, Ed Nelling, a professor of finance, and David Hunt, a senior finance major-- created a program where student-analysts teleconference with investors from New York, Orlando and further abroad. They can also post their investments online for review by the broader finance community.

"We thought of ways to intensify this experience with industry," says Dorn. "We wanted to extend the classroom."

Such innovations are examples of "reverse mentoring," a new approach wherein students advise academics. "The Office of Endowment considers the Dragon Fund to be one of their investment managers," says Dorn. "It's the students who pitched their services to the university."
 
Source: Daniel Dorn, LeBow College of Business
Writer: Dana Henry

Even when it’s not Philly Tech Week, the region has an ever-growing schedule of hackathons and startup events. Despite the crowded landscape, Philly Tech Breakfast has already racked up over 200 members -- including local notables from Philly Startup Leaders, Technically Philly and Drexel's ExCITe Center -- and they haven't even held their first meetup yet.
 
The group will meet every third Thursday in Mitchell Auditorium at Drexel’s Bossone Research Enterprise Center. The morning will feature three-to-six presentations from local tech innovators. According to Enterprise Law Associates' Gary Smith, a founding sponsor, Tech Breakfast is "technology agnostic," meaning that folks working on any tech-driven enterprise -- be it a videogame platform or a medical diagnostic device -- are welcome to participate.
 
"We wanted focus more on the fact that the companies are early-stage and in technology than on the fact that they're in a particular vertical," explains Smith.
 
By joining the greater Tech Breakfast network -- a listserv boasting thousands of members from Baltimore, Washington D.C., Columbia, Md., and Northern Virginia -- Philly can engage a broader community. A venture capitalist from Northern Virginia, for example, is more likely to build relationships and invest in a Philly software company if they belong to the same community.
 
"We’ll become part of a larger flow of information," says Smith. "There's a lot of talk about that, but not a lot of practical facilitation of that."
 
Current sponsors include Namsa, a medical product consultancy, Outlook.com, Technically Philly and Bizelo, an inventory management company for e-commerce. The event was organized by Bizelo founder Ron Schmelzer.
 
While these breakfasts are free to the general public, they are tailored to tech startup members and supporters. Meetings start April 25 with presentations from AxisPhilly, SnipSnap and Acclaim, among others. 

Source: Gary Smith, Enterprise Law Associates 
Writer: Dana Henry

DreamIt Ventures -- the Philly-based accelerator that helped launch SnipSnap and CloudMine – is tackling a particularly challenging industry: Healthcare. DreamIt Health, which launched April 8, focuses solely on companies in healthcare IT.
 
The accelerator’s first class features ten companies including AirCare, a company developed by VenturePact that helps minimize re-admissions through mobile nursing; Osmosis, a tool that helps clinicians retain vast amounts of knowledge during medical training; and Medilo, a mobile healthcare card that details benefits and eliminates the need for forms.
 
Accelerator programs like DreamIt help validate business assumptions, minimize startup risk and guide businesses to market. With healthcare startups, that process is more complex. Aside from needing to comply with changing regulations, these companies deal with a market that's behind heavy hospital doors -- data is often difficult, if not impossible, to access. DreamIt has addressed these challenges through collaborative partnerships with Penn Medicine, the region's largest provider, and Blue Cross Blue Shield, the largest insurer.

Mentoring for the nascent companies will include time with industry experts who can explain the behind-the-scenes aspects of medical operations. Each company will also receive a a stipend of up to $50,000.
 
"It's about understanding the operational systems and getting access -- potentially to the systems themselves, but also to the experts,” says Karen Griffith Gryga, managing partner at DreamIt. "We provide the payer-provider element as well as access to the operational systems, the data and other resources that are often difficult for these companies to access."
 
Companies also need to navigate conflicting interests between payers and providers. Fortunately, those parties do agree on the need for improved quality of care and tools that enable patient self-management. An app regulating daily nutritional habits, for example, could help individuals treat their diabetes or obesity. The payer and provider also share an interest in big data management systems that can help hospitals treat more people.
 
"Now, more than ever, there is this desire among the different constituents of the healthcare ecosystem to find a way to work together in a much more collaborative fashion," says Griffith Gryga. "Hopefully that will continue."
 
Source: Karen Griffith Gryga, DreamIt Ventures
Writer: Dana Henry

For health care companies completing arduous clinical trials, there's a saying that every day is worth $1 million. Completing the paperwork required to meet regulations and pay doctors can cost pharmaceutical and biotech companies quite a few extra days.
 
CFS Clinical, based in Audubon, Pa., reduces the time and money spent on forms by automating the process. Using internal proprietary software called InSite, CFS reduces "study startup" -- the time spent signing up patients and proving a site's FDA compliance -- by 20 percent. The platform also works with a global banking network to manage payments to physicians, reducing wait time from up to four months to one month.  
 
According to Kevin Williams, VP of Corporate Development, CFS is the first company to focus exclusively on the business and financial management of clinical trials. The niche has proved lucrative. CFS currently works with seven of the top 20 international pharmaceutical companies and this past year the company (founded in 2001) has grown their revenue and employee base by 50 percent. They now have 75 employees and expect to hire 10 to 15 more within the next year. Positions are available in accounting, software development and project management. 
 
CFS continues to innovate. The company recently added a "Business Intelligence" service that shows clients all their InSite transactions. Starting next year, The Sunshine Act mandates healthcare providers disclose all payment information to the federal government.

"The process of actually making payments in the clinical research world is a bit backwards," says Williams. "We make the payments on the pharmaceutical company's behalf, then we aggregate that data and provide it back to them so they can report it."
 
The payments clinical trials make to physicians -- collectively dubbed "clinical grant spend" -- cover recruiting patients, screening patients, conducting trials and collecting clinical data. Williams says this portion accounts for 40 to 60 percent of a trial's entire budget. According to the February 2011 issue of Focus, clinical grant spend leads to $13 billion in worldwide clinical trial spending. By amassing data from thousands of trials, CFS can predict this cost for individual trials.
 
"Trials, in terms of their timelines, are very volatile," says Williams. "They speed up, they slow down, they're behind, they change timelines. That has significant financial impact. We’re basically empowering our clients to control their finances much better."

Source: Kevin Williams, CFS Clinical
Writer: Dana Henry

Last Tuesday, local university research in healthcare technology got a big boost. As a third component in the StartUp PHL portfolio, the University City Science Center's QED Proof-of-Concept program -- which invests exclusively in medical research from Greater Philadelphia’s academic sector -- was awarded a $500,000 loan from Philadelphia Industrial Development Corporation (PICD) Penn Venture Fund program.
 
QED -- the abbreviated Latin phrase Quod Erat Demonstrandum (proven as demonstrated) -- provides grant money and private sector guidance to help promising studies establish early stage proof-of-concept for commercial application, a cumbersome phase of the research-to-product process. Since 2009, the program has awarded $600,000 annually, divided into $200,000 grants for life science projects and $100,000 grants for research in digital healthcare, a growing field where life science meets information technology. 

According to Stephen Tang, President and CEO of the Science Center, university settings are ideal spaces for developing broad-scope medical science, thanks to their insulation from commercial interests. A diagnostic company, for example, might build a device to detect Alzheimer's disease. Meanwhile, a university has the freedom to research the molecular identity of the disease which can inform a range of diagnostics and treatments.
 
"The theory on innovation is you have to have very divergent thinking before you have convergent thinking," says Tang. "It's that very divergent thinking that [the Science Center] is trying to tap into and help to converge on commercial opportunities."
  
Past QED participants -- representing 22 regional institutions including Penn, Drexel and the Wistar Institute -- have gone on to launch promising companies. Vascular Magnetics, producers of a drug delivery apparatus created by Dr. Robert Levy, a professor of pediatric cardiology from Children’s Hospital of Philadelphia (CHOP) and his QED business advisor Richard Woodward, recently raised $7 million in their first round of financing. UE LifeSciences Inc., a medical device company that commercialized research in breast cancer detection by  Dr. Wan Shih of Drexel's School of Biomedical Engineering, eventually received a $878,422 grant from the Pennsylvania Department Of Health's Commonwealth Universal Research Enhancement (CURE) program.
 
While the "Eds and Meds" capital has long been hailed for life science achievements, Tang sees digital healthcare as the next frontier. Thanks to the Affordable Care Act, massive amounts of medical records have to be digitized. Furthermore, the bourgeoning field of Genomics -- the science of transcribing an individual's genome to detect genetic disease -- will require terabyte-sized data transfer and manipulation. 
 
Accordingly, the 2012 QED program made awards to mobile healthcare apps developed at Rutgers University. The $500,000 PICD loan -- which is repaid via licensing royalties and revenue from successful projects -- will expand QED within city limits, boosting Philly's role in the health IT industry. 
 
"[Philadelphia] has one of the largest concentrations of healthcare facilities, hospitals and doctors, as well as academic research," says Tang. "We're betting big that that domain will distinguish Philadelphia from other metropolitan areas in the world."

The University City Science Center has partnered with Flying Kite to showcase innovation in Greater Philadelphia through the "Inventing the Future" series.

Source: Stephen Tang, University City Science Center
Writer: Dana Henry