Entrepreneurs With A Plan Win Big
The WPI Venture Forum names New Hampshire entrepreneur winner of biz plan contest
John Lai, founder and president of Milford, N.H.-based DataPacT LLC and winner of this year's Worcester Polytechnic Institute Venture Forum Business Plan Contest, says his company's clear cut value proposition is what "separated the men from the boys."
Lai has developed a proprietary digital file compression software that will enable massive medical image data files to be stored and sent using reduced bandwidth and digital storage space, which will cut costs for hospitals and physicians, he said.
Lai's software reduces the size of medical image files, a patient's MRI, for example, by up to 20 times, he said, while still retaining near-perfect image quality and readability. At the forum, Lai related stories of physicians physically saving such files to a disk and delivering them in person to colleagues, rather than using email, because it took less time.
John Lai, founder and president of DataPacT LLC, which won this yearˆs WPI Venture Forum Business Plan Contest.First Among Equals
The demand for such a product, and Lai's strategy for bringing it to market quickly, is what ultimately put his company over the top in the contest, according to Elliot Katzman, one of the business plan judges and a general partner of Commonwealth Capital Ventures, a Waltham-based venture capital firm.
Lai estimated the total market for medical imaging at $6 billion last year, growing to $10 billion next year. He is seeking $3.5 million in Series A venture funding to get the company up and running. Winning the contest lends his company more credibility with venture capitalists, Lai said.
Lai said he will use part of the $15,000 cash and service prize to travel to Chicago and market his idea at a large medical convention being held there at the end of this month.
DataPacT was one of three finalist companies in this year's forum. Sudbury-based Corum Medical made a strong case for its technology, which would eliminate costly and painful tests for anemia by examining the lower eyelid.
Falmouth communications company Vipcort presented its plan for assembling a clearinghouse for VoIP (Voice Over Internet Protocol) technology manufacturers and installers to come together to create package bundles that would bring better service and cohesion to the industry.
The three finalists were selected from a group of 19 semifinalists from across New England that presented their ideas at WPI in October.
New to this year's contest was a novel audience participation factor that allowed attendees of the forum to vote electronically on who they thought the best candidate was after all three presented. Katzman said the two medical device companies were very close in audience polling.
What Next?
So, what happens to a company after it wins the WPI Venture Forum Business Plan Contest? The contest has been active since 1992. The Worcester Business Journal decided to track down four of the past winners to see how the entrepreneurs have faired.
Crescent Innovations, Worcester
The second time around was the clincher for Al Prescott and his company, Crescent Innovations Inc.
After coming in second place in 2001's WPI Venture Forum Business Plan contest, Prescott said he spent the next 5 years refining and developing his idea, and he came back last year stronger and wiser. He walked away the winner, with $15,000 in cash and services.
Prescott did his research and ultimately conceived of an injectable medical device that he says looks like clear jell-o. Within this goo is a known biological agent, he said, that secretes a chemical which helps ease the pain of specific jaw and joint disorders, while simultaneously slowing joint degeneration.
His WPI experience taught him how to accurately pitch his product, he said, and helped him identify what was confusing about his product and what wasn't.
In 2001, when he first presented his idea at the Venture Forum, it was just that, an idea. By the time he came back last year, his idea was backed by NIH funding grants and numerous clinical studies that gave it more credibility, he said.
Prescott said he is now currently searching for funding to bring his product into Phase II clinical trials.
Energen Inc., Lowell
The world has changed a lot since Chad Joshi won the WPI Venture Forum Business Plan contest in 2000.
Joshi's company, Energen Inc. of Lowell, has changed as well.
Joshi's original business plan, the one that won him $10,000 in cash and services in 2000, was to start a manufacturing business with his proprietary magnetic smart material technology, making precision actuators and custom system controllers.
But a number of factors compelled Joshi to shutter his company's doors, not the least of which was 9/11 and the government's policy shifts immediately afterwards.
"We realized the government was not going to be building the high-energy physics machines we had envisioned, mostly due to 9/11," Joshi said.
Joshi also said his team, a cadre of highly-skilled engineers, was ill-suited to bring the company from an engineering firm to a pure manufacturing operation. His folks were simply too eager to constantly move on to new challenges, instead of focusing on a few core products, he said.
But Joshi has still managed to find a source of revenue with his patented technology. He is close to finalizing exclusive licensing deals of his technology to two New England companies and one international company.
The companies, which Joshi declined to identify, will pay him a certain percentage of their revenues generated from the sale of products that use Energen's technology, he said. In this way, the technology will continue to generate revenue for Joshi and a partner, while he focuses on exploring future investment and management options.
Nimbit, Framingham
Musicians on independent labels do a lot for themselves that would otherwise be done for them by major record labels, and Framingham-based Nimbit makes a lot of the music business stuff easier for those indie musicians.
The company shared the business plan contest award in 2005 with Design Medical of New Hampshire. Today, Nimbit has 12 employees, nearly breaks even, and is funded by $1 million from angel investor Common Angels of Boston.
Patrick Faucher, Nimbit CEO, said the venture forum played an important part in helping the company ready itself to take the stage. Faucher started the company in 2002 with his own money and that of his fellow founders. The business was sustained until the investment by Common Angels by money from family and friends.
"It was very valuable in terms of the feedback we got throughout the process," Faucher said. "We got direct feedback on the (business) plan and how to use it, and it was practical."
Faucher said he didn't know if the venture forum had a direct impact on getting Nimbit funded, "but it certainly helped us prepare."
Mouse Specifics, Boston
Dr. Thomas Hampton once worked as an engineer for General Electric, helping to efficiently turn out millions of circuit breakers. So when he switched focus and started down the road to becoming a biomedical engineer, he was surprised to see how researchers in that field conducted rodent experiments.
"In the lab it seemed that the trend was to do one, maybe two, experiments a day," he said.
Hampton began applying engineering techniques to get more data out of each experiment, and eventually founded Mouse Specifics. The company creates noninvasive instruments that measure various aspects of rodent physiology. Hampton says researchers at pharmaceutical companies and elsewhere use tens of millions of mice and rats to experiment with new drugs, so they might as well get the most out of each animal.
One product Mouse Specifics produces is an electrocardiogram instrument that can check animals' vital signs just by having them stand on the device, without anesthetizing them as conventional ECG instruments do. That provides a better parallel to the responses humans might have to a drug treatment.
Another company product is a system that videotapes a rodent's movements as it walks on a treadmill and then gathers precise information from the recording. Data on the animals' gaits can help researchers evaluate treatments for Parkinson's disease, arthritis, multiple sclerosis and other ailments.
Hampton said his award money from the WPI Venture Forum was helpful for the company, but the practice the forum gave him in explaining his ideas was just as useful. He said it was "incredibly valuable" to get in front of financial professionals who challenged his business model and encouraged him to refine his ideas.
Worcester Business Journal Staff Writers Livia Gershon and Matthew L. Brown contributed to this story.
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