Worcester Business Journal

10 Worcester Business Journal | February 20, 2023 | wbjournal.com Mass. is a national leader in venture capital funding, but for startups to become investment- ready companies, entrepreneurs oen must rely on their own time and money PHOTO | COURTESY OF MASSACHUSETTS TECHNOLOGY COLLABORATIVE BY KEVIN KOCZWARA WBJ Staff Writer T he story usually starts in a garage. ere's a man – almost always a man – sitting behind a computer with the garage door lied open. He's working frantically. A camera would pan slowly in front of it as time lapses. From sunup to sundown, he works bringing an idea to life. Long hours. ese are the origin stories we've been told of Silicon Valley and its entrepreneurs. e story of Microso Corp. and Apple Inc. It's Google and Alphabet Inc. For Facebook – well, Meta Platforms Inc. now – the garage myth was swapped out for a dorm room. We've been told these stories countless times. Amazon.com, Inc. was a warehouse for books and then became AMAZON. Now Jeff Bezos is one of the richest people in the world. Steve Jobs and his turtleneck were one of those too when he was alive. Bill Gates still hits near the top of the list. But those stories are myths. Legends. ey pulled themselves up and made their dreams a reality. But, the garage – if it even existed – was the beginning, and it wasn't as simple as dreaming. To move on from the garage to the real world isn't as easy as "I have an idea!" In the world, we cherish ideas and people who bring them to life, but what is oen lost is to make something, to start a company, to build something new, money is required. Capital. Investment. And there are a few ways to go about it. For Aaron Birt and the team at Solvus Global in Worcester and Leominster, when they started their company, the goal was to solve problems. ey wanted to incubate ideas. Birt and co-founders Sean Kelly were graduate students at Worcester Polytechnic Institute and saw an opportunity to start a company not focusing on one thing, but searching out specific dilemmas in markets like scrap metal recycling and additive manufacturing, with the idea of incubating ideas to become answers and eventually stand-alone companies. Solvus bridges the gap between an incubator and a venture studio. A venture studio rolls out multiple companies in quick succession so they can build out an idea and reinvest capital. Incubators have been around for a long time and usually they're places where entrepreneurs can get office space, management training, and other services in the hopes of getting venture capital. Solvus hasn't taken any venture capital funding because its model is a bit different. Birt and Kelly don't want to send a specific idea into the world and hope someone ponies up money for the research. Instead, they want to build a company and spin it off into its own entity ready to make a product. ey keep equity in the spinoff. ey provide the tools, the people, and the training for the new company, and when the product is ready to stand alone, they send it out into the world. To do all of this, Kelly and Birt had to raise their own capital. at took some ingenuity and patience. Kelly and Birt looked for loans from friends and family. ey scoured for money they could acquire via government programs. ey eventually went to banks to take out loans. ey tested the patience of their partners, burned through savings, and maxed out credit cards. ey even sold Bitcoin. ey found a way to sell their time and expertise to raise money to start Solvus. "Aer a year or so, we were able to sort of have those consistent consulting projects," Birt said. "We started winning some government programs for a combination of ideas we had, as well as technology that we had developed while in grad school." State support for startups One of the programs where Solvus was able to find funding came in the form of a $1.6-million grant from the Massachusetts Technology Collaborative, which is a state-funded economic development agency headquartered in Westborough. Solvus received a Massachusetts Manufacturing Innovation Initiative grant, which supports later-stage startups with commercialization through capital investments. In Central Massachusetts, companies like LEAP R&D Corp. at WPI and FLEXCon Co., Inc. in Spencer have received the grants. "From there we kept rolling it, so we kept reinvesting everything we had back in the organization. ere was no money paying us back for not taking a salary for Paying for an idea B A N K I N G & F I N A N C E FOCUS Top states for venture capital funding State 2021 VC funding California $97 billion New York $28 billion Massachusetts $22 billion Texas $5 billion Washington $5 billion New Jersey $5 billion Pennsylvania $4 billion Illinois $4 billion Colorado $4 billion Florida $3 billion Source: Pitchbook Solvus Global Co-founder Aaron Birt speaks at the opening of the company's 32,000-square-foot Leominster facility, where it received $1.6 million from Mass. Technology Collaborative.

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