Worcester Business Journal

10 Worcester Business Journal • April 27, 2015 www.wbjournal.com I nside a former mill building in Worcester, a potentially new wave of businesses toils away. One has launched a new way to read the news while another is honing a robotic wok. These entrepreneurs are part of a growing number of college students seeking to evolve their ideas into busi- nesses. And officials with the city and the chamber of commerce want to keep them here and help them grow. That's the idea behind the two orga- nizations – RunningStart and Technocopia – that occupy the building at 95 Prescott St. and offer space and resources entrepreneurs need to hone their ideas. The two spaces are becom- ing gathering sites for a growing num- ber of people looking for office space or manufacturing equipment. These are just two examples of an entrepreneurial push that's growing out of programs at Central Massachusetts colleges, such as Becker, Clark, Holy Cross and WPI, which emphasize entre- preneurial studies. Worcester has a long history of companies launched by col- lege graduates, dating back to the city's manufacturing heyday. But now, they just look different, says Commerce Bank President Brian Thompson. "It is a little different than if you wound the clock back 15 years ago," when such startup ventures "would have been more mechanical." "I think that we are in a very exciting time in that more people are thinking about starting their own businesses ... than anytime before." The Worcester business community has tried to foster these new startups by strengthening connections to the col- leges, facilitating internships and utiliz- ing Startup Worcester, a program that each year gives 12 businesses member- ships in RunningStart, the Worcester Regional chamber and The Venture Forum, says Karen Pelletier, the cham- ber's director of higher education and business partnerships. "The chamber recognized that we needed to be doing more overall in terms of talent retention," Pelletier says. "We recognize there is a real void in opportunity for students when they graduate to start their own businesses here." But some businesses have made their start here, with positive results. Sam Shepherd co-founded his company Ashland biotech plans new clinical trials A shland biomedical device maker BioSurfaces Inc. has kept a rela- tively low profile through much of its 12-year history. But new develop- ments are creating some noteworthy buzz for the small company and its portfolio of products designed to treat renal, heart and vascular diseases. Last week, the U.S. Small Business Administration named BioSurfaces the state's Microenterprise of the Year for its "life-changing" medical technologies. Those technologies, which include arti- ficial blood vessels, stents and sutures, employ the company's patented electro- spinning process. BioSurfaces' first spin-off, NuVascular Technologies, was launched last year. Its focus is bringing to market a material called NuSpun Access Graft, which was created to mimic the body's own cell scaffolding. It's intended for use in the company's artificial arteries, which would be implanted in the forearms of patients who need hemodialysis for end-stage kidney disease. The devices allow drugs to be infused into the products' fibers to promote healing after they're implanted, and the materials have properties that allow the artery to seal after needle injections. This makes the products more tolerable for patients and less likely to fail than those that have been on the market for decades, according to Matthew Phaneuf, who founded the company with his wife, Tina. Phaneuf said NuVascular hopes to complete pre-clinical trials by the end of the year, then begin clinical trials in the first quarter of 2016. After a dozen years of development, the biochemist said he and his wife, a textile chemist, are excit- ed that commercialization is in sight. Launching NuVascular was a turning point, he said. "It was time for us to grow up and start getting a product out that could help people," said Phaneuf, who esti- mated that about 500,000 Americans require dialysis due to renal failure. Wound care next? Once clinical trials begin, Phaneuf said he expects it will take about two years to bring NuSpun to market (though a version of the product that doesn't use drugs faces a shorter approv- al process) in the U.S. and Europe, a relatively short span in the world of medical device approvals. He noted that the materials used in the platform are already used in different ways by other companies, so the approval process isn't as involved. But NuVascular is just one piece of the business strategy for BioSurfaces. The company plans to spin off multiple companies, as the NuSpun platform can be applied to many different medical devices for treatment of myriad medical conditions. The next one the Phaneufs are working on is called EmergeStat, and that company will specialize in wound care products. EmergeStat has not been officially rolled out, and probably won't be until NuVascular's products approach commercialization, Phaneuf said. Diabetes boosts need for products The common thread between NuVascular and its planned sister com- pany is the population their products treat. Phaneuf said the increasing inci- dence of diabetes in the U.S. has led to an increase in renal and vascular dis- ease, and that population will only grow. Plus, many of these patients are now covered by health insurance after the passage of the Affordable Care Act in 2010. "You're going to get more patients that will get more treatment and come out of the shadows," Phaneuf said. "So the numbers will go up." Q BY EMILY MICUCCI Worcester Business Journal Staff Writer Matthew Phaneuf on BioSur faces and its spi- noff, NuVascular Technologies: "It was time for us to grow up and start getting a product out that could help people." Worcester lays foundation for young entrepreneurs Skyscope, a video production and mar- keting services provider, in Worcester after he graduated from Clark University in 2011. Shepherd decided to stay because of the resources that were already here, along with the more rea- sonable costs of living and office space. "We like the value that you get and the flexibility it gives you to take big risks," Shepherd says. "We have a whole floor of the (office) building and it would (cost) 10 times as much" in Boston. Joshua Croke, the CEO and creative director at Origin Consulting, decided to launch in Worcester partly because of the city's financial benefits, but also its sense of community. Having lived in San Francisco and New York City, Croke found that Worcester is large enough to have a thriving social scene and small enough that one person can step in and make an impact. Croke recently started his own not- for-profit, Action! Worcester, which helps engage college students with the community and connect with the schools. There's a need to educate stu- dents about the city and show them that it's a safe, vibrant community they can be part of, he said. "It's important for our future to have new businesses start and develop here," Thompson said. "Expecting a New York stock exchange company … to locate a plant here and hire 200 people, you are always hopeful (of that) but that doesn't happen as often as we'd like." Getting more entrepreneurs to stay will mean maintaining the work that's being done and increasing the efforts. Chief among their needs is money, said Shepherd and Croke, and a grant pro- gram for seed money would go a long way toward providing another incentive to remain in Worcester. There are competitions set up by The Venture Forum and Holy Cross that offer cash prizes, but a few thousand dol- lars isn't enough, said former Holy Cross student Ben Kaplan. He started his own business, WiGo, an app that lets students communicate their social plans, in Boston because that's where his financial backer was located. The company is now valued at $14 million. Connecting entrepreneurial minded students with local businesses is also important, the entrepreneurs said. Many students pursue internships with start- ups in New York or Boston, according to Kaplan, so having this kind of connec- tion here would help retention. Also, encouraging the growth of feeder com- panies, such as digital solutions provider ten24, where enterprising students can work for a year before striking out on their own, is important, Shepherd says. That will take time, says Gina Betti, associate director and co-founder of WPI's Collaborative for Entrepreneurship & Innovation. "Worcester is once again on the cusp of building a culture and I think we will see (the) emergence of more start-ups in the next five years," Betti says. "I believe when the city targets an area, offers incentives … and actively invests in working at the table with all of the play- ers, then you will see clusters of new start-ups emerging." Q BY SAM BONACCI Worcester Business Journal Staff Writer U.S. Rep. James McGovern speaks with Drew Wilson from Vegfest New England during a recent tour of the RunningStart co-working space in Worcester. P H O T O / S A M B O N A C C I

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