MIT Enterprise Forum DFW

Can DFW Supplant Silicon Valley? Can MITEF Lead the Way?

Posted by lawtech on July 11, 2010 · Leave a Comment 

There is one key reason that Silicone Valley is the epicenter of launching innovative companies, thus creating massive numbers of jobs and creating massive amount of wealth.

The simple reason is that there is in place already very single non-core support component and/or service needed to launch a new company which offers a sustainable competitive advantage  over existing providers in that industry.

Thus, all that an entrepreneur needs is a vision of the elegant and optimum solution to an under-served market, for which there would be pent-up demand for a superior product/service to those that they need or have to put up with currently.

They have IP law firms, accounting firms, contract manufacturing, angels and VCs, companies with in place global distribution infrastructure, uber-scalable entrepreneur office/warehouse facilities ( the term for this escapes me at the moment ), PR professionals, uber-scalable staffing companies which handle all the employee benefit and administrative minutia which can drag a new company owner under with its mind-boggling detail, and a lot of interaction facilitating infrastructure.

This could easily be replicated in the DFW Region, and thus we could surpass Silicone Valley as the epicenter of innovation, given the self-destruction mode of the California government, which has public policy leading to the extinction of its business sector and the enormous costs of operating there.

California’s trajectory from a ) paying its firemen annual retirements of over $200,000, b ) its Prop 13 which causes Warren Buffett to pay more in ad valorum taxes on his orange shag carpeted home in Omaha, NE than on his ocean-front cottage in La Jolla, CA, c ) draconian cuts in its higher education and public secondary and elementary schools budgets, d ) the enormous home costs that a newly hired creative class human capital asset would have to pay on top of his/her mid six figure student loans, e) the unbelievably unshakable ( almost ) pit bulls at the California Franchise Tax Board, who seek to tax the air one breathes,

f ) the California Coastal Commission which can defer start of construction on a production facility until the next decade with its red tape unsurpassed by any bureaucracy on earth and absolute authority, g) the massive challenge of air travel scheduling to most parts of the country from having few east-bound commercial flights departing after 6pm, h) the legal framework which allows propositions with insane consequences to business easily becoming law of the land,and finally i) the horrific condition of the air and gridlocked traffic as well as the availability of water on the tipping point of collapse.

Other that, it is a pretty nice place.

Given the enormous complexity and costs an entrepreneur faces at getting her/his company off the ground in California, as well as the constraints on cash and time for a start-up with meteoric growth, many would choose the DFW Region as far more business friendly and a better place to grow one’s business.

I would suggest that the MIT Enterprise Forum might provide the leadership to build a coalition along with the established North Texas Commission to move the epicenter of innovation to the Central Time Zone where we have unmatched airline connections to the nation and to the world and very few weather shutdowns.

Dormand Long

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SBIR Workshop: Funding Your Innovations with Government Money

Posted by lawtech on October 27, 2009 · Leave a Comment 

On Saturday, October 24, 2009, attendees of this limited space event heard about winning Small Business Innovation Research (SBIR) awards. This highly interactive seminar discussed how to write winning proposals and how to deal with “registration” with the Government’s on line sites and the various required codes, numbers, and identifiers. Attendees learned what is involved in running an SBIR contract or grant and the significant benefits that an award brings to the winning firm. These include “sole source” treatment in certain Federal contracting situations, retention of “data rights,” including software by the firm, and ownership of principal worldwide rights to intellectual property. We will likely repeat this event in the near future. Here are the slides for the workshop.

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SBIR Workshop: Funding Your Innovations with Government Money

Posted by lawtech on October 27, 2009 · Leave a Comment 

On Saturday, October 24, 2009, the DFW MIT Enterprise Forum and the DFW MIT Club presented a Workshop to help individuals and firms learn how to win SBIR (Small Business Innovation Research) contracts and grants.

The Workshop was co-sponsored by TECH Fort Worth, who provided the venue and some great assistance. Our thanks to them!

Here are the slides that were presented at the Workshop.

Nick Lawrence, who has personally written and won nearly a score of SBIR awards, presented the Workshop. He started with an overview of the SBIR program, what firms are eligible, the credentials needed to be Principal Investigator, and how to strategize and plan your SBIR effort.

The Workshop then focused on the proposal. We examined in detail how it should be structured and what each section should contain. We emphasized clear, simple communications in the technical portion of the proposal, concise language, and not wasting the reviewers’ time. The cost proposal should be as elaborate as necessary, but definitely as simple as possible.

Next, we turned to the “registration” process. Doing business with the Federal Government requires you to have obtained certain numbers and codes, such as a Taxpayer Identification Number, a DUNS code, a CAGE code, and both SIC and NAICS codes. You need to have online accounts with Central Contractor Registration, with ORCA (online reps and certs), with WAWF (Wide Area Work Flow, used for invoices and payments), and potentially several others. It is not hard to get all of this done, but it needs to be done in a certain order or you will encounter delays. And it needs to be done well ahead of the time when you submit your proposal.

Finally, we covered the substantial benefits for your firm to win an SBIR award. These benefits go beyond the financial support such an award provides. Under certain broad circumstances related to your SBIR project, your firm becomes entitled to “sole source” treatment by Federal Agencies. You retain principal “data rights” (data sets and software) and patent rights for work you do under such a sole source contract. These contracts can be for your products, production, services, R&D, or any combination.

The SBIR Workshop was very well received by the participants. The Workshop filled up and sold out early. We already have several people signed up for a repeat of the Workshop in the near future. Subscribe to our newsletter to be kept informed, or check back often with the front page of this website.

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MIT EF DFW at the MedTech New Ventures Conference

Posted by lawtech on August 12, 2009 · Leave a Comment 

On July 29, 2009 I attended the MedTech New Ventures Conference presented by NTEC, Inc. It was held at the Embassy Suites Hotel’s Frisco Conference Center in Frisco, TX. As the representative of the MIT Enterprise Forum, Dallas/Fort Worth Chapter, which was a sponsoring organization for the event. I staffed a table and met people interested in finding more about our activities. It was a great event! For example, did you know that Texas is 2nd or 3rd in the nation in annual patents filed, but only in the teens in businesses started? This was shared by Mike Lockerd, Executive Director of North Texas RCIC.

My report on this event is posted here. An excerpt of the Q&A is shared below.

Question: How do you protect Angel investors from later round Venture Capitalists?
Paddison: Angels, friends, and family need to keep expectations in control if VC round(s) are likely to follow.
Karleski: Keep it simple. DON’T follow multiple paths or opportunities. Pick one and focus.

Question: How do VCs evaluate 8(a) status?
Karleski: 8(a) doesn’t enter in much. The evaluation is the same.

Question: What are the conditions for startups getting early stage VC funding?
Gutch: We need to see technology results. We need to be VERY confident that these results will
actually get to the clinics.
Crawford: You need to show capital efficiency. You need to show that after the early stage funding, it is unlikely that you will need any new capital.
Paddison: Where are your competitors? What is your differentiation?
Paiva: We look for demonstrations of intellectual honesty. Do you have a good handle on your competitors and show your competitiveness? How are you going to create a new market or make life difficult for incumbents? Show some disruption.
Karleski: Most of our first round deals have already achieved $1M to $5M in revenue, but are not
necessarily making money yet, and show a clear path to a substantial market position.

Question: Do Venture Capitalists compete?
Karleski: In general, no. We seldom meet each other as competitors. We do cooperate a lot.

Question: Where is Medicare cutting costs?
Karleski: Ambulatory care. Look for radiology clinics and other nonhospital abulatory services to go back to hospitals. A “dirty little secret” is that such outpatient ambulatory care are huge profit centers for many doctors. Look for Medicare to no longer reimburse outpatient ambulatory care.

Question: Are there regional entrepreneurial opportunities in North Texas?
Lalande: North Texas is tops in R&D and Technology. What’s been lacking is entrepreneurial activities. Look for strong entrepreneurial growth in North Texas. Note that North Texas is still lacking one key thing. There are still no large biotech employers to absorb entrepreneurs during an entrepreneurial down cycle, a place for entrepreneurs to go back into during down cycles, then pop back out in up cycles. But
the situation is changing.

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MIT Enterprise Forum DFW