Companies vie for investments at AlphaLab's Demo Day
October 26, 2012 4:00 AM
Ryan Bove, one of the founders of Aurochs Brewing Co., pitches the company at AlphaLab Demo Day. Aurochs Brewing uses ancient grains to brew gluten-free beer.
By Deborah M. Todd Pittsburgh Post-Gazette
Less than six months after his first AlphaLab Demo Day and i6 Agile Innovation and University Technology Preview pitch for his gluten-free beer company, Ryan Bove returned to the event with a transformed business.
Initially a member of the i6 program -- an initiative between Innovation Works and Carnegie Mellon University to commercialize innovations created in local universities -- Mr. Bove's Aurochs Brewing Co. joined the AlphaLab accelerator program in June.
Since that time, the gluten-free beer company has raised $75,000 of a planned $125,000 round of funding; has secured a location for the brewery; and is working toward getting permits for its official launch in 2013.
"When we first started this project in the i6 program last rotation, we were actually growing the grains in my Shadyside apartment," said Mr. Bove.
"We've come a long way since then and we're now ready to go to market."
Mr. Bove's update was only one of 13 pitches made by the most recent AlphaLab and i6 classes during the Demo Day event Thursday. More than 300 people showed up at New Hazlett Theater on the North Side to hear from university faculty, startup CEOs and local business representatives who served as mentors to entrepreneurs.
Started by South Oakland-based tech incubator Innovation Works about a decade ago, AlphaLab has invested in more than 150 companies through its seed fund, and those companies have gone on to raise more than $1.3 billion in follow on private sector capital.
The i6 Agile Innovation program, launched in 2010, connects startups with local entrepreneurs, existing incubators such as Carnegie Mellon University's Project Olympus and other sources to help build companies based on faculty research.
Since its launch, i6 has evaluated more than 250 companies, funded more than 30 entrepreneurial teams and engaged 50 community mentors. The program is funded through an award for a contest sponsored by the U.S. Department of Commerce's Economic Development Administration.
Dave Mawhinney, director of the i6 program, said university leaders have tons of great ideas but the key to commercialization is finding the idea that can go straight to the market with a little help.
"During this two-year award, we've had a number of university teams accepted into the program that were great ideas but ... we're trying to find if there's a 'there' there," said Mr. Mawhinney. "I think you'll see today we have a few where there's a 'there' there."
Four of the seven companies presenting during the i6 and university preview program focused on products geared toward the medical field, such as a computer program that helps physicians discuss obesity by Fitwits MD or QuantMD's program that uses algorithms and medical image data to address treatment of patients showing heart attack symptoms.
The remaining companies covered areas ranging from screenshot selection software from Neon to autonomous robotic boats by Platypus.
As for the six graduating AlphaLab companies, many have generated more funding and attention in their early stages than previous classes, according to director Jim Jen.
In addition to what's been raised by Aurochs, beauty products company FutureDerm has raised $35,000 toward a $300,000 round of funding, has generated more than $25,000 in revenue from its first product, and has increased its blog traffic by 220 percent, with approximately 250,000 page views per month.
CollegeZen, an online college decision-making tool, has partnered with professional social media site LinkedIn to provide career data info and has guidance counselors in 26 high schools nationally, including schools in the Pittsburgh Public School District, using the product.
AutoRef, a comparative shopping site for used cars that also offers financing, has made $70,000 in revenue and formed partnerships with thousands of dealerships nationally.
"Fifty-two thousand dealers nationwide in four months -- we're killing it!" said CEO Michael Pena.
Mr. Jen said the companies' progress, revenues and the size of the markets they're entering have attracted early investor interest, but the biggest factor may have been customer feedback.
"We can all kind of speculate whether something will sell or if customers will like it, but the most important thing is the customers themselves are validating it. I think these companies all have a significant amount of customer validation," he said.
Whether a company's experiencing a rise similar to AlphaLab graduates or a climb like an i6 company, Mr. Mawhinney said its success will ultimately hinge upon whether leaders take advantage of help being offered at any stage.
"A lot of it comes back to the entrepreneurs themselves. They're talented, go-getting people who really want to succeed and they're taking advantage of these programs," he said.