Worcester Business Journal

wbjournal.com | February 6, 2017 | Worcester Business Journal 13 B A N K I N G & F I N A N C E F O C U S Driving a long road together makes for a greater experience and leads to an extraordinary business. Let Clinton Savings Bank's Commercial Relationship Managers steer you and your business in the right direction, just like we've done with Michael Wade, owner of Motorsports International. Creating an innovation culture Worcester may not be a big VC mag- net, but there is infrastructure here to help entrepreneurs grow their ideas into companies. Through events at the Venture Forum, which spring out of Worcester Polytechnic Institute, stu- dents usually get their first taste of entrepreneurship outside the walls of their school, although events are open to all ages. Every year, the Venture Forum sponsors a pitch contest, where entrepreneurs present their companies in front of several judges for a cash prize. There are also incubator spaces in Central Massachusetts – like the Worcester CleanTech Incubator, TechSandBox in Hopkinton and Massachusetts Biomedical Initiatives – that help companies grow. Most com- panies within MBI come out of indus- try, not academia, said President and CEO Kevin O'Sullivan. "I tell people coming right out of col- lege, 'You know what you need to do: go get a job in that industry and spend three to five years learning the market.' If you do, you're going to come out with a much better opportunity for success," said O'Sullivan. WPI has a Tech Advisors Network, where student, faculty, staff and alumni entrepreneurs can get advice from other WPI people who have experience in entrepreneurship. "For all of its strengths, notwith- standing the fact that many do recog- nize Worcester as a center for innova- tion, it isn't yet recognized to the extent that it should be," said Donnelly. "Its light is still somewhat under a bushel." Reversing the early flight trend The trend was a Worcester company would get to a certain point of growth, see that there weren't enough opportu- nities here for them to grow, and then move closer to Boston, Vignaly said. That will change as the infrastructure grows, he said. At the Worcester CleanTech Incubator, Executive Director Joe Bush said he has hosted a couple of venture capitalists in his incubator space since it opened last year. "It's my job to line up as many poten- tially interesting meetings with this per- son as possible," he said. "If we reach into the network in this area and coor- dinate schedules, I haven't seen any hes- itation on the part of investors." Appealing to VCs Bush said one of the reasons there hasn't been more venture capital activi- ty in Central Massachusetts is that many of the companies here are in the earlier stages and seeking less money than VCs typically give out – as was the case with Blue Sky. Usually, VCs are looking to spend more money than Worcester companies have traditionally looked for, said Donnelly. "[VCs] have to spend a lot of time and effort on due diligence, whether it's a large or small amount of money," he said. A private equity group eventually bought the majority of Blue Sky in 2011. Five years later, the company was acquired by California-based LakePharma, which is looking to expand its Worcester presence. Wengender left Blue Sky in 2014, and served on the board until the Lake Pharma acquisition. He said Worcester is and should be a place for drug discovery – not just con- tract research. Boston-centric VCs Total amount Region VC deals invested Of the 397 venture capital deals in Massachusetts last year, 95 percent were for companies in the Boston metro region. Metro Boston 376 $5.7 billion Total Massachusetts 397 $6.1 billion Source: PricewaterhouseCoopers/CB Insights MoneyTree Report Vc deals total invested '16 '15 '12 '13 '14 0 $2B $4B $6B $8B 100 200 300 400 500 $6.1b 397 428 $3.7b Mass. VC growth Although it is happening almost exclusively in metro Boston, the amount of venture capital financing as exploded in Massachusetts over the last five years. Source: PricewaterhouseCoopers/CB Insights MoneyTree Report W

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