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Newest resident at Port Business Incubator plans to disrupt cancer treatment

Quantitative Radiology Solutions is the latest company to hang its shingle at the University City Science Center's Port Business Incubator

By taking up residency at the Port, Quantitative gains access to an extensive network of resources to grow its business. Quantitative is also a participant in the Phase I Ventures Program, which allows early-stage companies to test their business feasibility in a low-risk environment. Quantitative received $213,000 in direct financing from P1V and additional grants from the National Institutes of Health and the National Science Foundation.

The startup is developing a technology that promises to disrupt radiation therapy and treatment for cancer patients. We asked Joe Camaratta, Quantitative's president and CEO to tell us more.

What is your big idea? 

Quantitative Radiology Solutions helps physicians make optimal treatment decisions through analysis of medical images. Our initial product, Automatic Anatomy Recognition (AAR), supports recognition, delineation and quantification of anatomical objects and diseased tissues in multiple body regions using CT, PET/CT and MR images. 

Unlike existing automatic segmentation approaches that work on only three to five objects in a specific body region and require an unacceptable number of manual adjustments, AAR recognizes and delineates all anatomical structures in a given body region accurately and efficiently.  

What is your origin tale? 

The company was [founded by] Drs. Jayaram Udupa (computer science) and Drew Torigian (radiology) at the University of Pennsylvania.

Dr. Udupa was developing a novel image segmentation algorithm that used hierarchical modeling and machine learning techniques for object identification and delineation. Dr. Torigian, who focuses on quantification of disorders using computer-assisted techniques, applied the algorithm in body fat quantification and obstructive sleep apnea to demonstrate its usefulness in radiology.  

Dr. Udupa presented the new approach during a seminar to physicians and physicists from the Department of Radiation Oncology, and was approached by Drs. Peter Bloch (medical physics) and Charles Simone (radiation oncology) about its application in radiotherapy planning. Drs. Udupa and Torigian contacted the Penn Center for Innovation and created Quantitative Radiology Solutions as part of the UPstart program to commercialize technology. I joined as president and CEO to lead these efforts. 

What is ahead for Quantitative Radiology Solutions?

Our initial application area is radiation therapy planning. We believe there are applications of our technology in medical oncology to help assess tumor response to therapeutic interventions. There are also potential applications in surgical planning and 3-D printing using medical images. 

Why does the marketplace need your company? 

The global market for medical imaging is forecasted to reach $50 billion by 2020, and advanced modalities such as CT, MR and molecular imaging will account for 50 percent of that market. The rise in the number of imaging exams and number of images per exams necessitates new approaches to augment a physician’s ability to effectively evaluate exam results in a timely manner. A quantitative approach to medical imaging interpretation can improve early disease diagnosis, standardize assessment of disease response to treatment, and enable the discovery of new disease biomarkers. 

What is your elevator speech? 

We combine 75 years of expertise in clinical imaging, computational theory and algorithm development, and product development and commercialization [experience] from industry-leading organizations in medical imaging. When applied to the field of radiation therapy planning, our approach enables a robust standalone software solution that significantly improves the speed and accuracy of imaging contouring to support initial treatment planning and adaptive radiotherapy.

WRITER IN RESIDENCE is a partnership between the University City Science Center and Flying Kite Media that embeds a reporter on-site at 3711 Market Street. The resulting coverage will provide an inside look at the most intriguing companies, discoveries and technological innovations coming out of this essential Philadelphia institution.
 

The Enterprise Center launches a new fund to provide equity to businesses that need it most


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

Promising healthcare technologies win $600K investment from the Science Center


A new way to gather DNA for testing. A better tool for training healthcare workers. Improved physical therapy. An innovative approach to stem cell therapy. These technologies are all under development at regional universities and have been funded by the latest round of the University City Science Center’s QED Proof-of-Concept Program

Launched in 2009, the program provides a boost to novel university-born technologies with market potential, bridging the gap between academic research and commercialization. To date, 28 funded QED projects have attracted over $15 million in follow-on funding and led to seven licensed technologies.

QED goes to the heart of the Center's mission as a nonprofit organization that supports early-stage innovation. In its latest funding round -- the eighth -- QED awarded $600,000 to support researchers at the University of Delaware, Penn State University and Rutgers. The awards are half funded by the Science Center and half by the researchers’ institutions.

The four awardees were selected from a pool of 62 applicants and 12 universities in the Greater Philadelphia region.

Amy Cowperthwait of the University of Delaware is revolutionizing healthcare training by addressing the shortcomings of mannequin simulation. A qualified nurse, Cowperthwait has teamed up with lead engineer Amy Bucha to develop a tool for teaching healthcare workers airway management in emergency situations, improving patient safety and providing feedback from the patient’s perspective.

Dr. Judith Deutsch, professor of rehabilitation and movement science at the Rutgers University School of Health Related Professions, led a team of physical therapists and engineers to create a customized low-cost rehabilitation technology that selectively tracks movement and heart rate. The technology will aid in balance, mobility, coordination and fitness training for older adults as well as persons with neurologic and musculoskeletal conditions such as a stroke.

Dr. Melik Demirel of Penn State is using proteins to coat the surfaces of biomedical swabs, improving DNA capture. These swabs will allow gene analysis from even tiny amounts of blood or other biological samples; the DNA swab industry is the primary market for this product.

Dr. KiBum Lee, an associate professor of chemistry and chemical biology at Rutgers, is developing an innovative platform for programming human patient-derived stem cells for use in stem-cell therapies. His methods would help people with incurable and debilitating diseases and disorders. Lee's strategy is unlike conventional approaches because it doesn’t rely on the use of viruses to modify the cells' genes.

"The QED program excels at finding innovative, commercially relevant solutions for pressing problems in healthcare and life sciences," notes Science Center President and CEO Stephen S. Tang. "Our latest round looked for innovative approaches to collaboration as it emphasized partnerships between two groups that don’t typically work together: medical professionals and engineers. Putting together these groups’ different skill sets and perspectives -- as exemplified by Amy Cowperthwait’s and Judith Deutsch’s projects -- creates another path to improving patient care. You can expect to see more of these special emphasis areas in the future."

WRITER IN RESIDENCE is a partnership between the University City Science Center and Flying Kite Media that embeds a reporter on-site at 3711 Market Street. The resulting coverage will provide an inside look at the most intriguing companies, discoveries and technological innovations coming out of this essential Philadelphia institution.
 

The Philadelphia Immigrant Innovation Hub launches in Mt. Airy

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
 

Venture Capital: What it takes to be an angel (investor), and to get a blessing

If it takes fortitude to be an entrepreneur, it arguably takes even more to be an angel investor -- a high-gamble endeavor for those with deep pockets and an appetite for risk.

Joe Herbst is active with Robin Hood Ventures, an angel consortium based at the University City Science Center. At a recent "Coffee & Capital" event at the Science Center’s Quorum, he shared his thoughts on what it takes to be a successful angel -- and what it takes to get a blessing.

Herbst is one of 40 Robin Hood members who meet monthly at Quorum to consider pitches. Founded in 1999, the group has invested in over 50 companies; Herbst, an active angel since 2004, has 20 companies in his personal, early-stage technology portfolio. (Robin Hood members invest individually, not as a group.)

What drives Herbst and his fellow angels? His personal motivation is the potential for higher returns. (Members typically look for at least a 20 percent return on investment.) As for the group, "Robin Hood invests in companies in the Philadelphia region," he explains. "I believe it is important to support rapid-growth, early-stage businesses to retain talent and create good paying jobs in the local community."

The organization's investors usually focus on capital-efficient, business-to-business companies in the technology sector. They typically make about six new investments per year -- ranging from $150,000 to $400,000 -- and aim to exit profitably within about eight years.

They look for enterprises that are scalable and have already demonstrated a market for their product or service.

"We like to see a product running -- not a prototype or a test... -- that has been bought, paid for and re-bought," says Herbst. The members also look for an entrepreneur who has invested some of his/her personal money and demonstrates "deep domain knowledge: Someone who has lived and breathed in that industry for a decade and has seen problems that are not getting solved."

Still, there are exceptions. Herbst cites LuxTech, an LED lighting company whose young CEO pitched three times to Robin Hood before winning funding.

Robin Hood's success stories include the sales of Locus Energy to Genscape, LiveLOOK to Oracle and Novira Therapeutics to Johnson & Johnson. 

Still, according Herbst, "We have more losers than winners. That’s why we spread it around. And the winners have to be big winners."

WRITER IN RESIDENCE is a partnership between the University City Science Center and Flying Kite Media that embeds a reporter on-site at 3711 Market Street. The resulting coverage will provide an inside look at the most intriguing companies, discoveries and technological innovations coming out of this essential Philadelphia institution.
 

Scaling Up: A West Philly landscaping and home improvement business gets a boost

Recently, we took a look at the Enterprise Center’s ScaleUp America Initiative, a federally funded curriculum targeting mid-range Philadelphia businesses that have had success in their markets but need additional support to get to the next level.

West Philadelphia native Jameson Harris, 35, is a member of ScaleUp’s Elevate! Cohort 2016; he got started with the year-long program earlier this month. In 2002, Harris founded Brothers of Nature, a West Philly-based landscaping, home improvement, and property maintenance company.

The business started with three part-time employees, grew to about eight by 2014, and 16 this year. In 2005, Harris won a minority business plan competition with the Enterprise Center -- grants totaling $35,000 went towards supplies to expand the venture.

When he got started, Harris was one of the only landscaping companies based in his West Philly neighborhood. One of his largest early clients was the nonprofit ACHIEVEability, an affordable housing program with over 150 homes. As Harris expanded, the landscaping work expanded to include property maintenance for ACHIEVEability tenants and others.

Brothers of Nature now offers mowing, pruning, and leaf and snow removal, in addition to home improvement services such as painting, flooring, kitchen and bathroom installations, plumbing and electrical services. The company’s clients include the City of Philadelphia: They maintain vacant lots (keeping them mowed and clear of debris) in a span between 33rd and 15th Streets, Washington and Snyder Avenues.

Harris realized early in his career that entrepreneurship was the way to go.

"I knew a regular job couldn’t support what I need to get done," he says of finding something he could rely on in tough times. He’d been working for a landscaping company and decided to launch his own venture in the same field.

2016’s ScaleUp cohort will attend a total of seven seven-hour class sessions throughout the year, as well as one-on-one mentoring for targeted challenge areas and plenty of networking opportunities. One major goal for Harris this year is transforming his business from a sole proprietorship to an LLC.

"ScaleUp has taught me to involve my guys more in the business of what’s going on and how to grow, how to take on more customers," he says. That shift is not just about lightening his load, but about letting him focus on crucial administrative aspects of the business including his longterm business plan. Upcoming goals include growing his employee roster and transitioning part-time workers to full-time.

Writer: Alaina Mabaso
Source: Jameson Harris, Brothers of Nature

 

Science Central: Five questions for Choosito!

For young students, the Internet can be a big, messy, cluttered, unreliable or even dangerous place. Choosito!, a University City Science Center startup, has devised a technological solution to help K-12 teachers find age appropriate resources for their students. The company's tagline sums up its mission: "Because the web is not a library and search engines are not librarians."
 
We asked co-founder and CEO Eleni Miltsakaki five central questions about his growing enterprise.
 
What is your big idea?

Although progress has been made in returning quality search results, the focus is on improving the relevance of results to the query, not the user, and on improving the online shopping experience. 
 
Choosito! is a web search filtering application designed to personalize search specifically for learners. To achieve this, we shift our focus from the keyword to the user.

Let's take the example of the query "polar bears." The user making the query could be a second or fifth grader searching for cool facts about polar bears to bring to class the next day; a group of middle school students working on a science project; a language teacher looking for a short story or news about polar bears at different reading levels; a foreign language learner; or even a polar bear expert.
 
The key to personalizing results for learning is understanding who the user is, what she wants to learn and what she knows already. Choosito is building technology that combines text analysis algorithms with statistical representations of each user’s current and evolving experience with the topic of the query to make adaptive recommendations of relevant resources.
 
What is your origin story?

I am a linguist and natural language processing scientist. In 2006, I started teaching educational technology at the University of Pennsylvania’s Graduate School of Education and was quickly confronted by frustrated teachers who were reluctant to let their students use the web because it was a distraction, took a long time to find something useful and was not reliable.
 
Co-founder Christos Georgiadis and I started operations in 2012. We are now surrounded by a talented team of educators, technologists and entrepreneurs dedicated to personalized learning.
 
What is your timeline for growth?

We launched our beta Choosito! Search and Learn in October 2014. Users can establish search criteria to filter websites by reading level and theme. Since our launch, we’ve gotten over 30,000 users.
 
On our first anniversary, we released our premium product Choosito! Class to help K-12 teachers integrate the teaching of information literacy into their curriculum. Choosito! Class also helps teachers assess the progress of their students’ critical thinking and information literacy skills by accessing quantitative data about their students’ methods of inquiry and evaluation of information.
 
In March, Choosito received a $1 million Innovation Award from the National Science Foundation. We’re currently at work to extend our machine learning text analysis technology by offering website recommendations based on what each student already knows and understands about the topic of inquiry.
 
Why does the marketplace need your company?

There is currently no other tool that can leverage the power and size of digital content to offer a sustainable solution not only for K-12, but lifelong personalized learning. Choosito!’s competition offers either automatically retrieved non-leveled resources or limited collections of resources organized by reading or grade level that become obsolete in less than a year.
 
What is your elevator pitch?

Choosito is a linguistic application that personalizes learning by making adaptive recommendations of resources that are not only relevant to the topic of interest but also relevant to the user and what they already know.

WRITER IN RESIDENCE is a partnership between the University City Science Center and Flying Kite Media that embeds a reporter on-site at 3711 Market Street. The resulting coverage will provide an inside look at the most intriguing companies, discoveries and technological innovations coming out of this essential Philadelphia institution.
 

Federal dollars from ScaleUp America come to West Philly

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

 

Message from Quaker Partners Founder: Startups, do your homework!

It goes without saying that the University City Science Center is home to many innovative and promising healthcare startups. But as Brenda Gavin, a founding partner of Quaker Partners Management, a Philadelphia-based healthcare investment firm, reminds entrepreneurs, it takes more than a good idea to win funding in a competitive investment climate.

Gavin answered questions last month at Quorum’s "Coffee & Capital" event and offered this concrete advice. 

"Both established companies and startup companies should do their homework and know their customer," she said. "That is, they should know as much as possible about the fund they are pitching: When was the fund established? What types of companies are in their current portfolio? What is the previous experience of the partners? How much capital do they have under management? What is their preferred company stage for investment? Don’t waste time pitching a fund when your research indicates they are unlikely to invest.

"All entrepreneurs should remember that most venture funds are limited partnerships with a 10-year life," she added. "This means that a fund must assemble its portfolio, grow value in the companies and get to a profitable exit in 10 years. Most funds invest in companies during the first five years of their life, and harvest in the second five years. So, if a company is a very early-stage discovery company, it is unlikely a fund that is over five years old will invest -- it is unlikely the fund will get to the profitable exit in five years. Entrepreneurs should definitely explore investment from corporate venture funds. They are typically not limited partnerships, so do not have the 10-year limitation."

Since its own founding in 2002, Quaker has invested in dozens of innovative, high-impact healthcare companies at all stages of development and in subsectors including pharmaceuticals, biotechnology, healthcare services, and medical technologies such as devices, tools and human diagnostics. Quaker manages over $700 million in committed capital, and is currently investing its second fund.

Quaker typically invests between $5 million and $25 million in each company, with a focus on the East Coast. Its portfolio includes Science Center alum BioRexis, which was acquired by Pfizer in 2007 only five years after its establishment.

From her vantage point at Quaker’s Cira Centre headquarters, Gavin believes that Philadelphia’s venture capital climate still has room to grow. 

"There is an abundance of scientific expertise and pharmaceutical development talent in this region," she enthuses. "Unfortunately, there is a shortage of entrepreneurial leadership talent and local venture capital for later stage investment. On the plus side, there is substantial early stage investment from Ben Franklin, BioAdvance and the Science Center. These groups are unique to this area -- in addition to their capital, they bring contacts and mentoring. So while our climate is not as robust as that in Boston, the raw materials are here, and I am optimistic that we will see more companies growing here."

WRITER IN RESIDENCE is a partnership between the University City Science Center and Flying Kite Media that embeds a reporter on-site at 3711 Market Street. The resulting coverage will provide an inside look at the most intriguing companies, discoveries and technological innovations coming out of this essential Philadelphia institution.
 

An innovative all-natural deodorant goes from Philly kitchen to TV's 'Shark Tank'

Philly entrepreneurs Jess Edelstein and Sarah Ribner have been brainstorming together ever since their elementary school lemonade stand in Allens Lane Playground. Now they’re 26 years old, and on December 11, they pitched their latest product -- the world’s first all-natural activated charcoal creme deodorant -- on an episode of ABC's Shark Tank.

The duo founded PiperWai with the mission of offering customers a safe, effective, fragrant, gender-neutral, aluminum and chemical-free deodorant. It took a while for them to realize that the activated charcoal in the product -- which users apply with a fingertip -- was the key. A lot of research into body odor and deodorant competitors led to experiments in a Philly home kitchen. 

"I was looking up activated charcoal for my stomach, actually," recalls Edelstein, "chief maker" and CEO. She got interested in the substance’s absorbent properties. "I kind of had that lightbulb moment to put it in the deodorant."

This was a few years ago, before activated charcoal became a trendy ingredient in cosmetics.

CFO Ribner tested the new concoction during a volunteering trip in Guyana. The stuff worked.

In its current incarnation, PiperWai is a creme blend of organic oils such as coconut, vitamin E, shea butter and cocoa butter, the signature charcoal (which won’t discolor clothes), and a proprietary blend of 11 "therapeutic-grade" essential oils that keep men and women equally fresh.

After finalizing their recipe, the founders began producing deodorant in batches of 300 at Greensgrow Community Kitchen, using pastry piping bags to get it into the jars.

The company's name has two parts -- the first is for Edelstein’s beloved family dog Piper; the "Wai" is borrowed from the name of the Waiwai tribe, who Ribner spent time with during her travels in Guyana.

The pair never saw being woman entrepreneurs as a roadblock to success, but actually launching their business taught them that while there are many programs and funds geared specifically to female entrepreneurs, there are still major gender imbalances when it comes to venture capital.

"I never knew that female entrepreneurs have a hard time in business until we launched a company," says Edelstein. "At some pitch competitions, there were very few women."

Ribner points to the fact that venture capital funds in the U.S. overwhelmingly favor male-founded companies.

A year ago, Flying Kite spoke with DreamIt Ventures’ Archna Sahay, who explained that businesses with female CEOs receive less than 10 percent of venture capital funding nationwide, despite women founding businesses at one and a half times the national average -- and delivering 12 percent more revenue with one third less capital than comparable male founders.

"That’s what led us to do crowdfunding instead," explains Ribner; over $27,000 from an Indiegogo campaign boosted their capacity. "We didn’t have to give away equity and it got us to the next level…So it was one of those situations where one door closes and another door opens."

Now, the two are setting their sights on expanding their deodorant line, developing a stick version of the creme, an extra-strength version and travel sizes. Currently selling their product with 40 independent retailers, they’re working on a deal with Whole Foods in the mid-Atlantic area, starting with Philly.

"You can show people that your gender doesn’t matter," says Edelstein. With the right product and great customer service, "you can still kill it in business."

Writer: Alaina Mabaso
Sources: Jess Edelstein and Sarah Ribner, PiperWai

 

Kiva City Philadelphia celebrates one year of boosting local small businesses

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

Exciting new partnerships will boost Philadelphia's startup scene

The startup stars are aligning in University City, where a quartet of major players has announced several new partnerships aimed at boosting the burgeoning community of entrepreneurs.
 
First up, Drexel University and Ben Franklin Technology Partners of Southeastern Pennsylvania are teaming up to create the Drexel Ventures Ben Franklin Seed Fund, a $10 million early-stage seed fund that will support spin-off companies from the university. The fund will initially invest in enterprises that have licensed technologies from the university and have already taken advantage of Drexel's extensive commercialization programs. Its candidate pool will eventually be expanded to include startups founded by alumni and students. 
 
Concurrent with the launch of the new fund, Ben Franklin will join Drexel and the University City Science Center’s efforts to strengthen the offerings at Innovation Center @3401 ([email protected]). Ben Franklin will establish a physical presence at the collaborative workspace on Market Street, providing member companies a variety of services and support including industry consulting, market analysis and access to capital.
 
At the same time, Safeguard Scientifics is joining [email protected] as its first "sustaining member." The Radnor-based private equity and venture capital firm specializes in healthcare and technology companies, and will help to recruit and mentor member companies while bringing in new industry collaborators, providing critical resources and offering perspectives on the evolving economic landscape.  
 
"Together the Science Center and Drexel have built a strong foundation for startups at [email protected]," explains Science Center President and CEO Stephen S. Tang. "Adding Ben Franklin to the partnership and Safeguard Scientifics as a sustaining member strengthens the ecosystem that is in place at [email protected] and allows us to draw on our collective assets and expertise to attract and support a critical mass of high-growth startups and a diverse set of members."
  
Drexel President John A. Fry is also excited about the partnerships.

"Teaming with a visionary organization like Ben Franklin, a group with a proven track record of fueling Philadelphia’s innovation economy, will not only empower our entrepreneurs, but also attract others to University City and serve as a model for the type of partnerships that will form the foundation of the Innovation Neighborhood," he enthuses.
 
Source: University City Science Center
Writer: Elise Vider

WRITER IN RESIDENCE is a partnership between the University City Science Center and Flying Kite Media that embeds a reporter on-site at 3711 Market Street. The resulting coverage will provide an inside look at the most intriguing companies, discoveries and technological innovations coming out of this essential Philadelphia institution.
 

Wharton study finds that socially conscious investing can also be profitable

Do people investing money in companies geared for social or environmental good have to give up the prospect of market-rate returns in exchange for working towards a better world?

No. At least according to the first systematic academic research to address the young but extremely broad field of "impact investing," the Wharton Social Impact Initiative's (WSII) new report, "Great Expectations: Mission Preservation and Financial Performance in Impact Investments." In some arenas, socially or environmentally conscious investors can see their returns hit market-rate performance.

"It’s difficult to talk about the report because there is so much nuance in it," explains co-author Harry Douglas, a full-time impact investing associate at WSII, who continues to follow the data of this growing field. However, he hopes that the findings will be accessible enough to spread the message that, contrary to longtime perceptions, impact investing doesn’t "necessitate a concessionary return."

What does that mean?

Investors who choose to put their private equity dollars into companies with missions like micro-finance, healthcare in low-income regions, education technology or green energy don’t have to accept smaller returns than folks who put their money into more traditional profit-driven avenues.

The study tracked the performance of 53 impact investing private equity funds that represent 557 individual investments, and debunks the widespread assumption that lower investment returns are inevitable when investing in socially focused funds.

How do we define impact investing? According to the Global Impact Investing Network, the receiving company’s intentionality of impact (meaning their bedrock commitment to the good outcomes they espouse), the measurable impact the company makes, and the expectation of a financial return.

So since impact investing is such a broad field, with many investors valuing a specific social interest over maximized profits, how did WSII identify a stable of funds to follow? WSII asked participating fund managers to self-identify in one of three categories: those seeking to simply preserve the capital invested, those seeking below-market-rate returns, and those pursuing market-rate returns.

"Our report doesn’t make any type of value judgements about what’s appropriate there, because there’s important work to be done in each of those three segments of the financial expectation," says Douglas. But this study focused only on the latter group of investors: those whose fund managers were seeking market-rate returns.

They did this because they wanted to get the best understanding possible of what the industry’s going to look like over the next couple of years, given the typical five-to-seven-year life cycle of a private equity investment. Funds launched around 2010 are nearing the time that fund managers will exit the companies involved. So there are the questions of whether those investments will prove profitable, whether the companies' missions continue after the exit, or if fund managers seeking higher returns abandon the ideals when mission protections aren’t built into the language of exit agreements.

"We focus on this market-rate seeking segment because we felt the tension would be greatest in this group," explains Douglas. "They would be trying to balance these competitive market-rate returns with preserving portfolio company mission."

This research is just the beginning.

"We’re really hoping to grow this sample size, so we can make more definitive statements about the industry," adds Douglas. 

Writer: Alaina Mabaso
Source: Harry Douglas, Wharton Social Impact Initiative 

Breakfast Club at The Exchange: Talking Social Innovation


Last week, over 30 Philadelphians set their alarms and woke early to head to the Friends Center for breakfast. On offer was much more than just bagels and coffee -- organized by The Exchange, a co-working space comprised of nonprofits and philanthropic organizations, the event was an opportunity to discuss social innovation in Philadelphia.

The crowd included local leaders in development, government, nonprofit administration, startups and philanthropy. All are working towards making this city a national leader in uncovering thoughtful solutions to society's problems, whether through policy, programs or entrepreneurial ventures.

One of the key questions that arose from the discussion -- led by Matt Joyce of the GreenLight Fund (who works out of the Exchange) -- was, what are the things that limit great ideas? It's often not just economics, but also politics: being in the right rooms at the right times, and making the right arguments to the right people. That often takes a different type of expertise -- founders may have knowledge and drive, but they also need pitching help and matchmaking with investors and stakeholders. How can the entrepreneurial and nonprofit communities help nurture initiatives and organizations from creative spark to potential investment to surefire success?

Fortunately, the city has more and more avenues to incubate those great ideas, from the Philadelphia Social Innovations Lab to the Commerce Department's StartUpPHL program, to accelerators at established venture funds like DreamIt and Good Company Ventures. And even if every promising startup or pilot program doesn't make it, the founders earn valuable experience and become better bets in the future. 
 
Luke Butler, Chief of Staff to the Deputy Mayor for Economic Development, talked about how when First Round Capital (a Commerce Department partner) is looking to invest in early stage companies, the idea is important, but they invest primarily in the founder and the team. As an example, he mentioned Curalate -- a company that pivoted from trying to build an Airbnb for parking spaces to designing marketing campaigns for social media platforms. The company has become a shining star in the city's ascendent startup landscape.

And it's not only companies that have to be agile. A group of Temple students founded Philly Urban Creators, an urban farm at 11th and Dauphin. Their goals were to grow produce for the neighborhood and engage the local community. Five years in, they weren't making enough money to sustain themselves. How do you get from a nonprofit that's doing good, to a more sustainable revenue model? 

The organization went through the FastFWD program, a public/private partnership between The City of Philadelphia, GoodCompany Group and the Wharton Social Impact Initiative, funded in part by a $1,000,000 grant from the Bloomberg Philanthropies. Via that process they came to the conclusion that they needed new revenue streams. The team created a 12-week course targeted at formerly incarcerated youth, covering urban agriculture, carpentry and entrepreneurship. Combatting recidivism was a goal that could dovetail with their original mission, and funding for their first cohort came from the Department of Justice.

Other success stories were bandied about: Coded by Kids, Textizen (which was recently acquired and also went through FastFWD), Springboard Collaborative, an organization that seeks to stop the summer slide for low-income students. Eventually, though the conversation was still humming, folks had to get to work. Fortunately, the bigger picture discussion is just getting started.

Breakfast Club at the Exchange will return November 19. Stay tuned to Flying Kite for more details on the upcoming topic and how you can get in on the coffee talk. You can also join the discussion on twitter using the hashtag #ExchangeBreakfastClub.

 

Dear Startups, the Digital Health Accelerator wants you!

The University City Science Center  is now accepting applications for the sophomore class of its Digital Health Accelerator (DHA), a program that helps launch companies in the digital health or health IT sectors.

Need convincing? Consider UE Lifesciences, one of the startups in the inaugural DHA class that wrapped in July. UELS recently announced that it has raised $3 million in venture capital to commercialize its handheld breast health examination tool.

iBreastExam, a painless and radiation-free device, can be easily operated by nurses and social workers to provide standardized breast exams with instant results at the point of care. The product uses patented ceramic sensors invented at Drexel University to detect subtle variations in the stiffness of breast tissue that can point to tumors.

The implications for women in the developing world are enormous. Survival rates for women in the U.S. diagnosed with breast cancer are 80 to 90 percent compared to less than 50 percent for women in the developing world.

"iBreastExam may provide a fighting chance for them by enabling early detection on a large scale," explains Dr. Ari Brooks, director of the Integrated Breast Center at Pennsylvania Hospital.

According to the Science Center, UELS and the six other companies in the first DHA class went from prototype to commercialization, created 53 new jobs, generated $600,000 in sales and raised almost $4 million in follow-on investment.

For the next class, they're is looking for companies ready to establish operations in Greater Philadelphia with a product or concept ready to be sold -- or that will be ready with DHA support -- on the U.S. healthcare market. The six companies will each receive up to $50,000, office space at the Science Center, professional mentorship, access to investors and introductions to appropriate decision makers in their target markets.

The program will run for one year beginning in February 2016. Applications are due October 26.

Source: University City Science Center and UE Lifesciences
Writer: Elise Vider

WRITER IN RESIDENCE is a partnership between the University City Science Center and Flying Kite Media that embeds a reporter on-site at 3711 Market Street. The resulting coverage will provide an inside look at the most intriguing companies, discoveries and technological innovations coming out of this essential Philadelphia institution.
 
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