i&E Magazine Summer 2010 by Shannon Carr

Summer 2010

PATHWAY TO

SUCCESS Selexys Pharmaceuticals targets inflammatory disease with Oklahoma-developed drugs

RURAL ROOTS

Durant-based REI takes economic development mission statewide

CAPITAL MILESTONE

Historic proof-of-concept funding awarded to water remediation business

GOVERNORâ&#x20AC;&#x2122;S CUP ROADMAP Pointing college students in the right direction

The Selexys Pharmaceuticals management trio of (from left), David Falconer, vice president of business and development; Scott Rollins, chief executive officer; and Rick Alvarez, vice president of operations and research, have the Oklahoma City company on track to begin human clinical trials by early 2011 for drugs to treat Sickle Cell and Crohnâ&#x20AC;&#x2122;s diseases.

A free resource for small businesses & entrepreneurs. SourceLink Tulsa provides: »»

Easy»access»to»a»large»network»of»service»providers»

»»

A»comprehensive»schedule»of»entrepreneurial»education» opportunities»and»events»

»»

A»library»of»how-to»guides,»checklists,»online»resources»and» other»valuable»materials

Connect with us: »»

Call»918•560•0275»or»toll-free»at»888•4•BIZ•411» (888•424•9411)

»»

Go»online»to»sourcelinktulsa.com

C o n t e n t s

C O N T E N T S Introduction

About i2E

i & E Profiles Sigma Blood Systems Veracity Technology Solutions

6 7

Access to Capital Funding Oklahoma’s Technology Based Companies A3 Environ Interactive Collegiate Solutions Capital Gains for Oklahoma Entrepreneurs

8 9 10

Entrepreneurs Selexys Pharmaceuticals

Economic Development Rural Enterprises Inc.

COVER STORY

Educational Collegiate Entrepreneurs Tackle Big Markets with High-Tech Solutions 22 Outreach Room to Grow

Governor’s Cup Outreach

25 Innovators & Entrepreneurs

is produced by i2E, Inc.

innovators

& Entrepreneurs

Summer 2010

A B O U T

i 2 E

a MESSAGE FROM THE PRESIDENT

lmost a million Americans suffering from a debilitating intestinal inflammation known as Crohn’s Disease have found little relief from the condition in which white blood cells leave the circulation and enter nearby tissue, resulting in pain and discomfort. Based on discoveries by a pair of Oklahoma scientists, Selexys Pharmaceuticals has created promising drugs that block the P-selectin and PSGL-1 molecules that are responsible for both Crohn’s and Sickle Cell diseases. In this issue of i&E magazine, we profile Selexys, which is only months away from beginning human clinical trials to prove the effectiveness and safety of its treatments for Crohn’s and Sickle Cell diseases. Selexys CEO Scott Rollins reveals some striking similarities between the Oklahoma City-based company and New Haven, Connecticut-based Alexion Pharmaceuticals as it travels along the drug development path. Here’s a hint: Rollins and David Falconer, vice president of business and drug development at Selexys, both played key roles in the success of Alexion, which today is a $4 billion publicly traded company. In this issue we also profile two upand-coming i2E client companies that are making an impact on their respective industries. Oklahoma City-based Sigma Blood Systems has created a suite of software products that help blood collection agencies with quality control and blood tracking issues. In Tulsa, Veracity Technology Solutions is using medical grade imaging technology to perform what is known as nondestructive evaluation or inspections of aging military aircraft and turbines used to generate electricity Also, we celebrated a milestone award earlier this year in the history of the

i2E TEAM The i2E management and staff is composed of professionals with extensive experience in technology commercialization, business development, venture investing, finance, organizational management, and marketing. Tom Walker

President and Chief Executive Officer

David Thomison

Vice President, Enterprise Services

Rex Smitherman Vice President, Operations

Tom Walker

Technology Business Finance Program, and in this issue we look at the history of our proof-of-concept fund and the company — A3 Environ — that became the 100th to be awarded. Another company, Tulsa-based Interactive Collegiate Solutions, recently repaid the proof-of-concept funding plus interest. You will want to read the article in this edition in which founders Paul and Peter Dudley talk about their successful company. Elsewhere in this issue, you will read about Durant-based Rural Enterprises Inc. and discover that it is having a positive impact in areas of the state far outside its Southeastern Oklahoma roots. Finally, we recently completed the sixth Donald W. Reynolds Governor’s Cup competition, which once again drew some of the top emerging entrepreneurial talent from campuses across the state. Our stories look at the winners and also detail the milestones that students follow to create and present their business plans. I know that after reading this issue of i&E magazine you will be encouraged by the innovative companies and the entrepreneurs that our team works closely with every day.

Sarah Seagraves Vice President, Marketing

Tom Francis Director, Investment Fund Administration

David Daviee Director, Finance & TBFP Administration

Richard Gajan

Director, Enterprise Services

Richard Rainey

Director, Enterprise Services

Casey Harness

Commercialization Associate

Scott Thomas Network Administrator

Grady Epperly Marketing Specialist

Jim Stafford

Communications Specialist

Michelle Odom

Meeting and Event Specialist

Cindy Williams Administrative Assistant

www.i2E.org

Tom Walker i2E CEO and President 4

innovators

& Entrepreneurs

Summer 2010

A B O U T

i 2 E

ABOUT As a single point of entry for technology commercialization services, knowledge and advice, i2E works with innovators and entrepreneurs on how to analyze risk, create business plans, pitch to investors and partners and network with business professionals. We strive to build a pipeline of young talented and skilled entrepreneurs through a statewide collegiate business plan competition that is based on innovation and technology, and we foster entrepreneurship by matching start-up technology businesses with college students to gain hands on experience and develop networks. Over the past decade, i2E clients received 90% of all venture capital invested in Oklahoma technology companies. In the past year i2E launched the SeedStep Angels as an independent manager-led angel group meeting the SEC’s qualifications for accredited investors. Our efforts were recognized when we were accepted as a full member of the Angel Capital Association.

Our Proof-of-Concept fund provides critical capital to support early product or business development. Managed as a revolving fund, it acts as a catalyst for additional private investment, with paybacks from entrepreneurs funding nearly 30% of all proof-of-concept awards. Awardees have gone on to raise over $210M in additional private capital, leveraging the state’s investment over 28:1. These clients represent 53% of al i2E client companies receiving true venture capital investment. The Oklahoma Seed Capital Fund was created to provide seed and start-up equity financing to Oklahoma advanced technology companies. In 2009, i2E concluded the investment cycle of the first Series of the fund with investments in 7 Oklahoma companies that attracted over $16M in co-investment. i2E has been acknowledged internationally for their success in helping Oklahoma entrepreneurs, college students and researchers turn their INNOVATIONS TO ENTERPRISES………i2E.

i2E BOARD of DIRECTORS Roy Williams, Chairman and Mike LaBrie, Secretary Robert Barcum, OKC Unisource Program Administrators

Phil Kurtz, Jenks Benefit Informatics

Stephen Prescott, OKC Oklahoma Medical Research Foundation

Howard Barnett, Jr., Tulsa Oklahoma State University-Tulsa

Hershel Lamirand, III, OKC Oklahoma Health Center Foundation

Darryl Schmidt, OKC BancFirst

Sean Bauman, Norman Immuno-Mycologic, Inc.

Merl Lindstrom, Bartlesville ConocoPhilips, Inc.

Craig Shimasaki, OKC BioSource Consulting

Bob Berry, Enid DC Bass & Sons Construction

Dan Luton, OKC OCAST (non-voting)

Sheri Stickley, OKC Oklahoma Department of Commerce

James Bode, Tulsa Bank of Oklahoma, N.A.

Fred Morgan, OKC The State Chamber

Wes Stucky, Ardmore Ardmore Industrial Development Authority

Mike Carolina, OKC OCAST

Mike Neal, Tulsa Tulsa Metro Chamber

Roy Williams, OKC Greater Oklahoma City Chamber

Bob Craine, Tulsa TSF Capital, LLC

David Pitts, Stillwater Stillwater National Bank

Dick Williamson, Tulsa TD Williamson, Inc.

Steve Cropper, Tulsa

Amy Polonchek, Tulsa

Duane Wilson, Tulsa LDW Services, LLC

Mark Poole, Tulsa Summit Bank

Don Wood, Norman Norman Economic Development Coalition

Phil Eller, Tulsa Eller Detrich, P.C. David Hogan, Tulsa Hogan Taylor, LLP.

innovators

& Entrepreneurs

Summer 2010

P r o f i l e s

Max Doleh Sigma Blood Systems President and CEO Year started: 2009 Office location: Oklahoma City No. of employees: 10 Product or technology: Process optimization, risk management, and software solutions for blood centers, plasma centers, and donor-based centers. Products: Quality control, blood and product tracking, platelet manufacturing and blood management. Market: Sigma Blood serves the worldwide blood and plasma banking industry specifically, bio science and healthcare industry in general. Future plans: The company is developing new patent-pending technologies to complement its current solutions to optimize and automate more processes of a blood bank and integrate with third-party equipment and systems. Funding: The company has been selffunded along with a proof-of-concept award of $100,000 from i2E. Successes: Key milestones include Blood Tracker deployed June 2007; Platelet Manager deployed August 2008. A Director of business development was hired in June 2009, followed by the director of marketing in August 2009. QC Manager was launched in October 2009. Web address: www.sigmablood.com

innovators

& Entrepreneurs

rom the moment it flows from the arm of a donor into the inventory of a blood bank, donated blood must be tracked, manufactured and tested before it can provide the “gift of life” to a recipient. Sometimes the flow of donated blood and blood products is interrupted by poor documentation, tracking or processing, which can leave hospital emergency rooms and surgery centers in short supply. Sigma Blood Systems founder Max Doleh conceived a high–tech way to track donated blood so that virtually every drop can be used to make a difference for patients in need. Sigma Blood developed a suite of patented software tools to automate blood center tracking, processing and quality assurance operations and help eliminate much of the loss of this vital product. “We discovered the nation’s blood centers needed a way to track sample tubes and units internally, as well as create efficiency in platelet manufacturing and track quality control of manufactured products,” Doleh said. “With that knowledge in mind, we created our Sigma Blood Software Suite using Six–Sigma optimization principles.” The Sigma Blood software was created specifically for blood centers after assessing the needs of the Oklahoma Blood Institute and the general industry, Doleh said. The relationship between Doleh and the Oklahoma City– based OBI began with a chance encounter at a conference with Randy Stark, OBI’s Chief Financial Officer. At the time, Doleh was commercializing inventory management systems using wireless RFID and Wi-Fi technologies through Productive Technologies, which is still operating today. Doleh began a conversation with Stark during a break at the conference in which he had the opportunity to pitch Productive T’s specialized software development and inventory management expertise using RFID.

Summer 2010

That encounter led to a series of phone conversations from which the relationship blossomed and a blood-tracking prototype was developed. “We used existing technology that we customized a bit to fit their need,” Doleh said. “That helped us gain their confidence.” Eventually, Sigma Blood Systems developed three trademarked and patent– pending industry specific software applications called Blood Tracker, Platelet Manager and QC Manager. The blood tracking, manufacturing and quality assurance products were so well received by the Oklahoma Blood Institute that it signed on as a strategic partner with the company. The OBI relationship has opened doors for Sigma Blood Systems throughout the blood banking industry, as has the addition of industry veterans Patrick Saxton and Susan Conner to the team. “Our biggest competitor in this industry is the status quo,” Doleh said. “When the client is comfortable with what they are doing, sometimes you have to actually show them the product to generate that need. There is a cultural change that has to go on. That’s why we are going now with blood banks that are known to be early adopters. Clients immediately realize the value our applications bring to their operations in terms of risk reduction and improved bottom line” A long–standing relationship with i2E continues to benefit Sigma Blood, both from professional mentoring to financial assistance. “i2E has been extremely helpful in many ways,” Doleh said. “One of them is just having someone who understands entrepreneurship. When you are an entrepreneur you need someone to tell you how it really is and not sugarcoat it because that will hurt you down the road. “They understand how to manage risk and reward.”

P r o f i l e s

Gary Hensley Veracity Technology Solutions President Year started: 2006 Office location: Tulsa No. of employees: 9 Product or technology: Veracity provides non-destructive evaluation services for power generation equipment and military aircraft using various methods that allow it to see cracks and weaknesses in airframes, turbines and other structures. It has developed a unique ultrasonic inspection technique and instrument that provides a 3-D image of the article under inspection. Market: Aerospace and defense; power generation Future plans: Veracity continues to evaluate the commercial aerospace market, and hopes to enter this market soon. It is in the process of a major upgrade of its 2400 ultrasonic instrument. Funding: i2E and Acorn Growth Cos. start-up funds. In addition, Veracity has obtained project funding through Tinker and Robins Air Force Bases. Successes: Veracity has completed three Small Business Innovation Research awards, and one has been approved for a Phase III commercialization award. It recently received the Aviation Week 2010 MRO of the Year award for supplier/ service provider for the world in 2010. Web address: www.veracityts.com

he KC–135 Stratotanker has served the U.S. Air Force as a mid–air refueling station for more than a half a century. The first of the massive jets rolled off the Boeing Co. assembly line and were put into service in 1957; the last in 1965. Generations of pilots have passed through its cockpits, and technology not yet invented in the mid–1950s now adorn its instrument array. More than 50 years after its debut, the KC– 135 continues to serve a vital role refueling the nation’s strategic fighters and bombers. So, how does the Air Force keep the aging tankers flying? That’s where Tulsa–based Veracity Technology Solutions, an AGC Aerospace & Defense Company, steps in, along with a host of other private and military entities. Veracity plays a key role in ensuring the KC– 135 and other military aircraft such as the F–15 remain airworthy. Veracity uses high–tech imaging equipment that enables engineers to see weaknesses and cracks in critical airframe parts. It’s called non– destructive evaluation. “We are problem solvers,” said Veracity President Gary Hensley. “If someone has a need to investigate a particular component and wants to understand what it looks like or look at damaged areas or evaluate those components for life extensions, we can develop an inspection methodology to do that and monitor those parts. “Typically, we can do your inspections cheaper, better and faster.” Veracity recently was named 2010 Aviation Week MRO of the Year award winner for what the industry magazine called outstanding achievement in aviation maintenance, repair and overhaul. The company also boasts an impressive array of intellectual property developed through its work with various customers. “That’s a very prestigious honor,” Hensley said of the Aviation Week award.

Veracity is a portfolio company owned by Oklahoma–based Acorn Growth Companies, an investment company that specializes in the aviation industry. Veracity devised its patented non– destructive evaluation techniques by adapting medical grade ultrasound technology to the inspection of metals, composites, steel alloys and other materials found in aircraft engines and airframes. Tulsa–based USUT Labs is a minority owner in the company. “It allows you to see defects in a 3D format,” Hensley said. “It allows you to measure them and see how deep they are.” Veracity technology also provides non– destructive evaluation services to the power generation industry, using its high-tech equipment to inspect gas–powered turbines that provide much of the generation capacity in Oklahoma and elsewhere. “Power generation is an extremely important part of our business,” Hensley said. “Right here in Oklahoma there are probably 12 to 15 gas turbines within 200 miles of me.” After establishing a strong niche for the military and power generation markets, Veracity is working to move into the commercial aviation market, Hensley said. American Airlines operates a major maintenance operations center in Tulsa. The development of Veracity into a major player in the military and power generation markets has been aided by its relationship with i2E, said Jeff Davis, a partner in Acorn Growth Cos. i2E’s proof–of–concept funding helped Veracity secure critical seed investment, Davis said. “i2E has continued to be very supportive as the company moves from its early stage roots to maturity,” Davis said. “There is little doubt in my mind that Veracity would not be the success it is today without i2E.”

innovators

& Entrepreneurs

Summer 2010

A c c e s s

t o

C a p i t a l

Funding Oklahoma’s Technology-Based Companies

Milestone award

Technology Business Finance Program Funds 100th Company

proof-of-concept program that has provided critical funding for some of Oklahoma’s technology success stories achieved a major milestone in January. A3 Environ became the 100th Oklahoma company to receive funding through the OCAST Technology Business Finance Program, which is managed by i2E for the Oklahoma Center for the Advancement of Science and Technology. A3 Environ joints a list of proof–of– concept funding recipients from across the state, including the Oklahoma City and Tulsa metro areas, Ada, Ardmore, Chickasha, Owasso, Ponca City, Sapulpa and Stillwater. Companies that received funding over the life of the program include Novazyme, a drug development company that was awarded $100,000 in 1999 and later was acquired by pharmaceutical giant Genzyme for more than $200 million. Other notable companies that received proof-of-concept funding from i2E include Advanced Academics, Anyware Mobile

innovators

& Entrepreneurs

Solutions, Hostbridge Technology, SouthWest NanoTechnologies. “When this fund was created by the state legislature in the late 1990s, there was little proof–of–concept capital available to help Oklahoma entrepreneurs advance their technologies,” said Tom Walker, i2E’s President and CEO. “Now, more than a decade later the fund has provided an essential element in the start-up and growth of literally dozens of Oklahoma companies.” As of Dec. 31, 2009, i2E had funded $9.3 million in proof-of-concept funds though the program’s history. Recipients can use the funds to build prototypes, make equipment purchases, hire critical employees, validate the target market and other key needs for companies working toward commercialization of a new product. “Success has been the best word we can ascribe to the OCAST Technology Business Finance Program since its beginnings more than a decade ago,” said Michael Carolina, executive director of OCAST. “It is rewarding

Summer 2010

to think of the Oklahoma companies that have received TBFP funding, how they have prospered, and how they have given back so that other companies can apply for funds and create both wealth and job opportunities for Oklahomans. “My congratulations to our partner i2E for their due diligence in making this program work for our fellow citizens.” The program requires companies to obtain matching funds and also has a payback provision through which $3.5 million has been repaid. That means 37 percent of total funded awards over the life of the program have been returned to fund new companies. Tulsa–based ICS is the most recent company to repay its TBFP award, returning $35,000 awarded in 2004 plus interest. Designed as a catalyst for attracting additional investment capital, more than $220 million in private investment has been generated by the companies participating in the program, attracting $28 for every $1 of state investment.

A c c e s s

t o

C a p i t a l

A3 Environ

tackles contaminated gas well “flowback” water

brewing controversy in Congress over the use of a gas well drilling technique called hydraulic fracturing has opened the door for an Oklahoma-based company that proposes a non-legislative solution. The Fracturing Responsibility and Awareness of Chemicals Act — better known as the FRAC Act — was introduced in both houses of Congress last summer. Among other things, the Act would reclassify wastewater from hydraulic fracturing. If passed, the act would put wastewater under Environmental Protection Agency regulation and significantly increase the overall cost of developing some of the most promising natural gas fields in the United States, according to the American Petroleum Institute.

A3Environ Inc. offers an alternative approach to federal regulation, said its founder and President, Jay Glasscott. A3Environ would treat the frac wastewater, called “flowback,” using a patented, low-cost Advanced Oxidation Process that eliminates all chemicals in the flowback. “The CLEANFRAC H2O™ process that we designed can eliminate the chemicals and organics in that wastewater,” Glasscott said. “That means that flowback wastewater now should be acceptable within state environmental regulations and not require additional federal regulations. In addition, after treatment, the flowback wastewater could be recycled to the next frac job reducing freshwater requirements. ” For shale gas wells, millions of gallons of freshwater are used in the hydraulic fracturing process. The freshwater is mixed with chemicals and sand before being forced into a well hole under high pressure. The fluid fractures the shale below, allowing the gas to migrate out of the well. However, a portion of the frac fluid flows back out of the well as wastewater. Most of the flowback wastewater is transported off the well site and remediated or pumped into off-site disposal wells. “The use of hydraulic fracing has opened up huge natural gas resources in the United States and the world,” Glasscott said. “The

benefits of developing our U.S. natural gas reserves are well documented, but hydraulic fracturing process is very messy. Opponents claim, among other things, that flowback wastewater is contaminated with chemicals that are hazardous to both humans and the environment. Their solution is to have the EPA regulate the wastewater as hazardous waste, which will significantly increase disposal costs. In some regions, flowback disposal costs are already high, up to $10 per barrel to transport and dispose of the wastewater. That includes the Marcellus Shale area of Western New York and Pennsylvania, one of the most promising natural gas regions in the U.S. A3Environ’s process would reduce those costs for well operators by up to 20 percent, Glasscott said. The company plans to build what it calls CLEANFRAC H2O™ Mobile Transportation Systems (MTS), each of which would be capable of treating up to 430,000 gallons of wastewater per day. An MTS would be dispatched to a client’s well where the flowback wastewater would be quickly decontaminated. “Oil & gas companies get that green label of being a good guy — cleaning up their wastewater, being environmental friendly — and at the same time improving their bottom line,” Glasscott said. “It’s a win-win for everyone.”

innovators

& Entrepreneurs

Summer 2010

A c c e s s

t o

C a p i t a l

ICS dominates fraternity, sorority recruiting market with Internet- based software

n 2002, brothers Paul and Peter Dudley developed a Web-based software application that organized the chaotic task of recruiting and enrolling new members into the Greek system of fraternities and sororities at Universities. They called their Tulsa-based company Interactive Collegiate Solutions (ICS). It offered a product called Collegiate Recruiter and began with one beta test site: the campus of Texas Tech University. The next year Collegiate Recruiter was adopted by about 30 customers, and Paul and Peter realized their software solved a membership management problem that plagued Greek organizations on campuses across the nation. Collegiate Recruiter provides all aspects of recruitment in an Internet subscription-based solution. ICS needed financing to launch a marketing campaign nationwide. But because its market was limited to several hundred campuses with Greek organizations, the opportunity appealed to few potential investors. “We didn’t need huge dollars, but the investment opportunity didn’t have the typical exponential return projections that

innovators

& Entrepreneurs

a lot of seed investors are looking for,” said Paul Dudley, Managing Partner/Chief Information Officer. In stepped i2E and its proof-of-concept fund, the Technology Business Finance Program. ICS won a $100,000 proof-ofconcept award in 2004 and drew only $35,000 of that amount to go with matching dollars the founders raised. “The TBFP was a perfect type of fund to get the company bootstrapped with some friends-and-family money plus the TBFP matching dollars,” Paul Dudley said. “It was a critical instrument for us to accomplish that early, quick growth to get out in front of the customers on a nationwide basis before the competitor knew we were on the landscape.” ICS and Collegiate Recruiter went on to be so successful that the software is used by more than 400 campus Greek organizations today. ICS dominates this market niche with more than 90 percent market share. The company recently repaid the proof-ofconcept award, plus interest in full, as well as its original investors. Collegiate Recruiter was conceived by Peter Dudley, who was a fraternity president at Texas Tech while in college and then an adviser to the Greek organizations on campus. Today, Peter Dudley is Managing Partner/Chief Operations Officer of the company. Paul Dudley was operating a software consulting company at the time. “Peter saw an opportunity and asked me if my consulting firm could solve a recruitment issue for the men, the IFC (Inter Fraternity Council),” Paul Dudley said. “They didn’t have any formal way of collecting applications, distribution of recruit information, scheduling parties,

Summer 2010

and matching membership of the guys who wanted to be in these fraternities.” The Internet-based software application was developed for fraternities then quickly adopted by the sororities — or Panhellenic — side of the Greek world, as well. With i2E’s proof-of-concept funding in hand, ICS quickly grabbed a huge share of the market from unprepared, PC-based competitors. ICS grew from 30 campuses the first year to 80 the second to the more than 400 colleges and universities that use their software today. “With the funding we received from i2E, we were able to jump into action instead of slowly working into the market,” said Peter Dudley. “We were able to develop the software quicker, increase marketing and attend more conferences in which our potential clients were attending. All of these reasons allowed ICS to beat potential competitors to the clients and setting us as the primary provider in this market.” ICS since has added a National Recruiter application and a chapter member management add-on to its original Collegiate Recruiter. ““When we came in with a true Internetbased system we fundamentally changed the way the campus, chapters and advisors worked; they could remotely log in and accomplish things that used to require paper and being tied to the office at all hours,” Paul Dudley said. “We quickly transitioned most customers to our system in about a three-year time frame. “I think i2E was instrumental in helping us understand how to formulate and build and deliver a business proposition to the investor community,” Paul said.

A c c e s s

t o

C a p i t a l

CAPITAL GAINS for Oklahoma entrepreneurs

hen members of the SeedStep Angels invested in an Oklahoma technologybased company this spring, it represented a milestone in the life of the new investment group that was organized and is managed by i2E. Tulsa-based Emotion Media became the first equity investment made by the SeedStep Angels, which is composed of high net-worth Oklahomans who were organized into a formal investment group in mid-2009. It promises to be the first of many investments by the SeedStep Angels in Oklahoma-based technology start-ups. “The SeedStep Angels are part of an overall strategy to build organized capital in the region,” said Tom Walker, i2E President and CEO. “It is already one of the biggest groups in a 300-mile driving radius.” Until the SeedStep Angels began weighing investment opportunities on a monthly basis, Oklahoma entrepreneurs in need of capital to build new businesses had few private capital alternatives beyond credit card debt or money provided by friends and family. The Oklahoma legislature provided some state-funded solutions to the early stage capital void by appropriating money for the OCAST Technology Business Finance Program and the Oklahoma Seed Capital Fund. Those two programs have funded scores of early stage Oklahoma companies over the past decade. But there was little private equity available to Oklahoma entrepreneurs.

The existence of the SeedStep Angels provides private capital and something less tangible but equally important to new entrepreneurs: mentoring from investors seasoned by years of business experience. Angel investors often are former entrepreneurs themselves and have successfully built their own companies. For Emotion Media, the SeedStep Angels investment complements the funding the company already has received from i2E through both the proof-of-concept fund and the Oklahoma Seed Capital Fund. Emotion Media was awarded $100,000 in TBFP funding in 2007. It was among the first class of Oklahoma companies to received equity investments from the seed capital fund in 2008, receiving more than $600,000 in the first and subsequent rounds. Founded in 2004, Emotion Media is a multi-media design firm that provides Internet-based, automated digital photography proofing services to the professional photography industry, as well as high definition quality slide shows for both consumers and photographers. Since mid-2009, the SeedStep Angels have screened approximately four deals monthly and selected 15 for presentations before the whole group. Other investments by members of the angel group followed the Emotion Media deal, said Tom Francis, i2E’s director of investment funds. Deal flow is generated largely by the i2E team from among companies that also have

What are angel investors?

Angel investors are high net-worth individuals who invest in start-up companies in exchange for an equity share of the business. Many are former entrepreneurs. They make a return on their investments when the entrepreneur successfully grows the business and exits it, generally through a sale or merger. It is estimated that angels invested $19 billion in more than 55,000 start-up business across the nation in 2009. (Source: Angel Capital Education Foundation)

presented for proof-of-concept funding or seed capital investment. Although the SeedStep Angels consider deal opportunities as a group, they make investment decisions individually. With virtually no other organized private investments available to Oklahoma entrepreneurs, the SeedStep Angels already have become an important source of capital. “There are no venture capitalists in Oklahoma right now looking at these kinds of deals,” Francis said. “This is the only place any of these companies are getting any private investment capital.”

innovators

& Entrepreneurs

Summer 2010

Grady Epperly Returns to i2E after service in Afghanistan G

rady Epperly took a leave of absence from i2E in October 2009, put on a U.S. Air Force uniform and for the next seven months distinguished himself through a tour of duty with U.S. and NATO forces in Afghanistan. Technical Sergeant Grady L. Epperly served as Chief of Media Relations for NATO Training Mission-Afghanistan and Combined Security Transition CommandAfghanistan from Oct. 17 until he returned to the United States in late April. He returned to his position as marketing specialist at i2E in mid-May. During his tour of duty in the Afghanistan combat zone, Grady was awarded the Joint Service Commendation Medal for exceptionally meritorious service, Afghanistan Campaign Medal, Air Force Overseas Short Tour Ribbon, Air Force Expeditionary Service Ribbon and the NATO Medal. A member of the U.S. Air Force Reserves since 2000, Grady’s service as part of Operation Enduring Freedom in Afghanistan was his second tour of duty in a combat zone. In 2007, he also served in support of Operation Iraqi Freedom. In a narrative summary in support of the commendation medal, Chief Petty Officer Julian Carroll wrote: “Working well above his pay grade, Technical Sergeant Epperly personally managed and directly supported more than five NATO media tours and 250 media visits and engagements. Additionally his tireless efforts aided international–level media visits and more than 85 media briefings and media preparation sessions with key leadership, directly supporting the Command and Afghan National Security Forces by directing pinpoint messages

innovators

& Entrepreneurs

Technical Sergeant Epperly personally managed and directly supported more than five NATO media tours and 250 media visits and engagements. of security, stability and sustainability to international media, to include the Associated Press, Reuters, CBS, ABC, BBC, BBC Persian, NBC, CNN, CNN International, FOX News, Al Jazeera English and Arabic, CBC, 60 Minutes, C-SPAN, Washington Post, Agence France Presse, New York Times, LA Times, Wall Street Journal, El Mundo, Daily Telegraph, The Guardian, Air Force Times, Army Times, Stars and Stripes, McClatchy News, German Financial Times, The Christian Science Monitor, The National Journal and various freelance and local Afghan media outlets.” Grady took media calls and answered inquiries with a candor that earned respect from media and praise from his commanders. “I felt privileged to have the world’s press calling me on a daily basis, allowing me the opportunity to tell them what was really happening in Afghanistan,” Grady said. “My job was to give the true story, good, bad or ugly. “We would take them wherever they wanted to go and they could decide for their selves what was really happening.” In the commendation narrative, Chief Carroll wrote: “His actions allowed the NATO Training Mission — Afghanistan and Camp Eggers to be showcased to an

Summer 2010

estimated 32 million viewers concurrently making NTM-A a household name worldwide. His hard work and efforts did not go unnoticed by senior leadership … Technical Sergeant Epperly’s tireless dedication to job and position surpasses what is expected of his rank.” “To be honest I don’t think I could have performed to the level needed over there if I didn’t know that everything at home was taken care of,” Grady said. “My wife, Theresa, did a great job at taking care of our daughter, Lydia, and holding down the fort by herself.” Grady described his Afghanistan duty as a “great opportunity,” both professionally and personally. “Professionally, to have the opportunity to serve as the chief of media relations for an organization with a billion dollar budget each month was something that most people in the public affairs world never get to do,” he said. “Personally on this deployment I got to work in a truly joint environment, with militaries from around the world, mentor the Afghan Ministries of Defense and Interior on public affairs and media relations and go on more than 120 outside-the-wire missions. It was an incredible experience,” he continued. “When I look back it seems bizarre that I got to do all of that.” For Grady, service in the military is a way to give something back to his country and to help people in a part of the world that has been embroiled in war for more than three decades. “If I had been born in Afghanistan, my entire life would have been lived in a war zone,” Grady said. “There is so much of the world that is totally destitute. They have nothing compared to what we have.”

Business Accelerator Opens for Business In Stillwater

The Michael S. Morgan Business Accelerator Building at the Oklahoma Technology and Research Park has opened for business. The Michael S. Morgan Business Accelerator Building is a certified business incubator with 25,000 square feet of furnished offices, buildable lab space and common space. It is located on the campus of the Oklahoma Technology and Research Park in Stillwater, Oklahoma. As a business incubator, the Morgan Building offers not only space but also access to a myraid of business support services that greatly improve the chances of success for start-up and young companies. A joint venture of Oklahoma State University, Meridian Technology Center and the City of Stillwater, the Oklahoma Technology and Research Park is designed to provide customized facilities for technology-based or knowledge-driven firms in all stages of development. Site-ready spaces are available for long-term land leases and relocation incentives also exist. For more information visit www.oktechpark.com or call Ron Duggins at 405-377-2220.

E n t r e p r e n e u r s

Selexys on

Mission to relieve suffering, build prosperous Oklahoma company

espite differences in geography and current level of commercial success, Oklahoma City-based Selexys Pharmaceuticals and New Haven, Connecticut-based Alexion Pharmaceuticals share some striking similarities. Both were built around technology developed in Oklahoma. Both focused on developing therapeutics for rare blood diseases.

innovators

& Entrepreneurs

Summer 2010

Dr. Ziad Kawar, senior scientist at Selexys Pharmaceuticals, releases precise amounts of fluids to be tested in the laboratory the company shares with Cytovance Biologics.

E n t r e p r e n e u r s

Selexys

Pharmaceuticals has developed monoclonal antibody inhibitors against molecules discovered by University of Oklahoma researchers Drs. Rod McEver and Rick Cummings. The molecules, P-selectin and PSGL-1, play a significant role in the pathology of devastating

]

diseases such as Sickle Cell and Crohn’s Disease, among others. The molecules mediate the migration of

Selexys, which is working to duplicate the success of its Connecticut counterpart by developing therapeutics that target Sickle Cell and Crohn’s diseases.

white blood cells from the circulation into nearby tissue, resulting in inflammation. After discovering the molecules, Drs. McEver and Cummings created inhibitors that prevented them from causing inflammation. Patents were generated by OU and licensed to Selexys.

And Oklahoma native Scott Rollins has played a key role in each company. A native of Moore, Rollins left a postdoctorate position at Yale University in 1992 to co-found Alexion, which developed and eventually won FDA approval for a drug called Soliris. Soliris provides the only FDA approved treatment for patients with a rare blood disorder known as PNH. The drug has won similar approval by regulators worldwide. The success of Soliris helped push the market cap of publically traded Alexion (ALXN) to $5 billion. Soliris was based upon discoveries during the 1980s in Oklahoma Medical Research Foundation laboratories in Oklahoma City, where Rollins worked as he earned his Ph.D. at the University of Oklahoma. Rollins returned to his native Oklahoma in 2008 to become President and Chief Executive Officer at Selexys, which is working to duplicate the success of its Connecticut counterpart by developing therapeutics that target Sickle Cell and Crohn’s diseases. “There are striking similarities between

Alexion and Selexys,” Rollins said. “For me, that was one of the biggest attractions, because I have already been there and done this before. At Alexion, I headed the effort to take a monoclonal antibody through preclinical and clinical development and ultimately to receive approval from the FDA as a treatment for a rare blood disease.” Rollins isn’t doing it alone. Coming to Oklahoma with him was David Falconer, who was executive director of drug development and project management at Alexion. Falconer is now vice president of business and drug development at Selexys. “In Oklahoma in general, there are two things that keep biotechnology companies from advancing to the key milestones of human clinical trials,” Rollins said. “It’s a lack of sufficient capital and the lack of an experienced management team that understands the intricacies of how to move the drugs forward in clinical development. Those are two elements that Selexys lacked until 2008.” Selexys has its roots in drug discoveries in the University of Oklahoma Health Sciences Center laboratories of Drs.

The next milestones were studies in different animal models to gauge effectiveness of the inhibitors. “We think the strongest data are in the Sickle Cell disease models and Crohn’s Disease models,” said Scott Rollins, Selexys CEO. “Those are the two most promising clinical indications, but there are many other diseases that could be treated Therapeutic formulations for Selexys were produced at Cytovance Biologics and are in use now for primate toxicology studies. Continued on page 17.

innovators

& Entrepreneurs

Summer 2010

E n t r e p r e n e u r s

Dr. Ziad Kawar, senior scientist at Selexys Pharmaceuticals, uses a handheld device to draw precise amounts of fluids out of a tube for analysis in the laboratory the company shares with Cytovance Biologics in the Presbyterian Health Foundation Research Park.

Rod McEver and Richard Cummings. The pair discovered the P-Selectin and PSGL-1 molecules that are responsible for causing white blood cells to bind other cells and thereby enter tissue, resulting in inflammation. Monoclonal antibody inhibitors were developed that blocked the actions of the P-Selectin and PSGL-1 molecules. Selexys was created in 2003 to commercialize the “Selectin Inhibitor” technology. Rick Alvarez led Selexys from 2003-2008 and provided Selexys with a great start by negotiating the license with the University of Oklahoma and by raising the early capital necessary the get Selexys off the ground. “When David Falconer and I made the move to Selexys, the science was here, the technology base was in place, Selexys was initiating the development of the monoclonal antibodies, but there was not significant capital to carry the technology forward into human clinical trials,” Rollins said.

innovators

& Entrepreneurs

After Rollins and Falconer joined a Selexys team that already included Alvarez, a co-founder who is now the company’s vice president of operations and research, the company quickly gained momentum. The group raised $3.5 million in a seed round from Oklahoma investors, which included i2E’s Oklahoma Seed Capital Fund and the Oklahoma Life Sciences Fund. This seed round also included $2.5M invested by Oklahomans including the entire Selexys management team and several physicians, among them Dr. Philip Jones of Norman who spearheaded the effort. Selexys was awarded a $3.2 million SBIR grant to advance its Sickle Cell drug from the National Institutes of Health, a record amount for an Oklahoma-based company. Selexys was awarded $1.8 million for its Crohn’s Disease therapeutic from the EDGE Endowment Fund. Selexys also won $300,000 in Oklahoma Applied Research Support funding from the Oklahoma Center for the Advancement of Science and Technology to develop a bio-

Summer 2010

assay laboratory for biologic drugs. A $4 million SBIR award is also pending from the National Institute of Diabetes and digestive and Kidney Diseases. The science began to move forward, as well. A partnership with biologic contract manufacturer Cytovance Biologics, a Presbyterian Health Foundation Research Park neighbor to Selexys, recently manufactured the first supply of the Sickle Cell drug for use in primate toxicology studies. Another manufacturing campaign is scheduled in the next few months to support anticipated human clinical study. Rollins expects the primate studies to be completed by August followed by a preliminary meeting with the FDA that month and filing with the FDA for an investigative new drug status in October that will allow human clinical trials to begin. Those trials are expected to begin in January in patients with sickle cell disease. A similar course is set for the Crohn’s Disease drug, with clinical trials expected to begin in late spring 2011. The relationships with both Cytovance and i2E have been especially beneficial to the company’s advancement. The proximity between Cytovance and Selexys in the Research Park has led to partnerships for both EDGE and OARS funding. Rollins calls it a “symbiotic” relationship. “Venture capitalists that we are working with greatly appreciate the dynamic between the two companies,” he said. “They perceive the relationship as a unique asset in that we are both in Oklahoma City. In addition, Darren Head, the chief executive officer of Cytovance is a great friend and colleague who has built a first class organization. Every time a VC comes to visit us we take them through the Cytovance facility.” i2E has provided advice and expertise that helped strengthen the company, as well as key investment contacts. “The seed capital fund is one of our anchor investors and provided us with half a million dollars in the $3.5 million seed round,” Rollins said. “i2E’s diligence process identified some weaknesses that we worked through and provided improvements to our business. Those improvements will serve us well as we seek to raise additional capital from VC groups nationwide.” Rollins has met with more than 20 venture capitalists in the past few months, seeking up to $20 million to carry Selexys

E n t r e p r e n e u r s

Continued from page 15.

More drug is being produced in

anticipation of human clinical trials early in 2011. Selexys has already been granted “orphan drug status” for its Sickle Cell drug because the drug is promising and the disease affects a small percentage of the total population. Drug development under orphan drug status shortens the development timeline and lessens the expense to market. Crohn’s disease affects a much larger percentage of the population and represents a large market

]

opportunity. Rollins expects clinical trials to

A similar course is set for the Crohn’s Disease drug, with clinical trials expected to begin in late spring 2011.

being for its Sickle Cell drug in by January and for the Crohn’s therapeutic by May 2011. About Sickle Cell disease:

According to the National Institutes of Health, there were 90,000 Americans and millions more people worldwide

through Phase 2 clinical trials. He envisions building a “fully integrated” pharmaceutical business in Oklahoma and lets potential investors know that the company wants to remain in the state. “For Sickle Cell disease, it’s feasible to advance the drug and build the necessary infrastructure in Oklahoma to support the commercialization of the approved product,” he said. “If you look five years down the road with, say 100 to 200 employees, you could easily market and sell a drug for Sickle Cell disease in the U.S. “We would need to partner with a larger pharmaceutical company in order to commercialize a drug for Crohn’s worldwide.” As a co-founder of Selexys, along with Drs. McEver and Cummings, Alvarez said his primary hope is that the drugs developed by the company will effectively treat patients suffering from devastating inflammatory diseases. Dr. Ziad Kawar is the company’s senior scientist.

Alvarez said the factors are too complex to predict with certainly whether it ultimately will remain an Oklahoma-based company over the long term. “If we keep our eye on completing the key milestones, and if the drugs work, then I can assure you that everything else will fall into place,” Alvarez said. For Rollins, Selexys brought him “home” to Oklahoma, where he intends to remain no matter what course the company takes. The mission is two-fold: to develop drugs that improve the lives of Oklahomans and others suffering around the world and to build a profitable and sustainable pharmaceutical business here in Oklahoma. “There is a tremendous amount of pride in being back in Oklahoma and having the opportunity to build this company,” he said. “This is an opportunity to put Oklahoma on the map as a state that can support the development of fully integrated pharmaceutical companies.”

in 2010 who suffered from Sickle Cell. Most are of African or Mediterranean descent. Sickle Cell is an inherited disease so named because red blood cells become sickle shaped and often block small blood vessels, restricting normal blood flow. About Crohn’s disease:

Between 400,000 and 600,000 people in North America suffer from Crohn’s disease, which is an inflammation of the digestive tract. Another 100,000 people in Europe are afflicted with the inflammatory disease.

innovators

& Entrepreneurs

Summer 2010

E c o n o m i c

D e v e l o p m e n t

Rural Enterprises Inc.

Economic Development for

ALL of Oklahoma

efore ground was broken in 2004 at the Presbyterian Health Foundation Research Park on a $17 million project that would become the home to Cytovance Biologics, a complicated financing deal was structured. Durant-based Rural Enterprises, Inc., (REI) provided a critical element to the financial package that allowed the project to move forward and ultimately resulted in a world-class facility for providing contract manufacturing for the life sciences industry. REI invested $15 million in federal New Market Tax Credits, which provided stakeholders in the deal financial leverage to turn the first shovel of dirt. So, how did a company based deep in southeastern Oklahoma come to play such a pivotal role in construction of the Cytovance facility? REI is a not-forprofit economic development corporation founded 28 years ago to help stimulate economic development in rural Oklahoma. The Cytovance project fit the company’s mission of “uplifting and advancing” Oklahoma’s economy, said Tom Seth Smith, REI’s president and chief executive officer.

innovators

& Entrepreneurs

As the REI board considered making an investment in the Cytovance project, Smith argued that the addition of new high paying jobs in Oklahoma City would benefit rural Oklahoma, as well. “The technology industry is good for our state and provides new opportunities for young adults in the rural areas to secure tech related jobs in Oklahoma City. But that’s upping our state, upping our capability,” Smith said. Issued by a unit of the U.S. Treasury Dept., the New Markets Tax Credit Program permits taxpayers to receive a credit against Federal income taxes for making qualified equity investments in designated Community Development Entities. REI was issued an allotment of $80 million in New Market Tax Credits in 2003 and another $56 million in 2005. “We were really approached by Oklahoma City leaders and the Presbyterian Health Foundation about becoming involved when they found out that we had an allocation of New Market Tax Credits” Smith said. Mike Anderson, President of the Presbyterian Health Foundation, which

Summer 2010

is one of the investors in Cytovance, described the tax credits supplied by REI as “imperative” to the financing deal. “The New Market Tax Credits were a part of the deal maker,” Anderson said. “The future successes of monoclonal antibody products in biopharmaceutical medicines from the Cytovance Biologics manufacturer were contingent on many important principals in this complex endeavor. REI was one those significant players.” New Market Tax Credits provided by REI also helped provide financing for the refurbishing and reopening of the Skirvin Hilton Hotel in Oklahoma City. REI was founded in Durant by former Oklahoma Congressman Wes Watkins in 1982 to provide capital for economic development in what was then known as the Third District of Oklahoma. “He saw the need to create an organization that could be an intermediary between the banking community and an organization that could also facilitate some of the available government financing programs; i.e. the Small Business Administration,” Smith said.

E c o n o m i c

Tom Seth Smith, president and CEO of Durant-based Rural Enterprises, Inc.

Early in its history, REI confined its activities strictly to Southeastern Oklahoma, with most of its focus on administering SBA lending programs. That meant managing what is known as 7(a) loans in which the SBA guarantees a large percentage of a loan for a bank,

reducing its exposure if the loan goes bad. REI also administers the SBA’s Section 504 Certified Development Company loans that finance larger projects such as a new hotel or physician’s clinic. Today, REI employs 40 people, and its economic development activities go far beyond administering SBA loan programs. It manages business incubators in six Oklahoma communities. REI also operates a Women’s Business Center, which provides services from two locations, Durant and Oklahoma City, and a Native American Business Enterprise Center in Tulsa. It is also involved in programs to provide down payment and closing cost assistance to Oklahoma working families to help them purchase the home of their dreams. REI was expanding its sphere of operations even before the Cytovance deal in 2004. It had already opened an Oklahoma City office in the Research Park and one in Tulsa. Today, offices also are located in Lawton and Alva, giving it a truly statewide presence. “As chairman of the REI board of directors, I look forward to every board meeting because this is an organization that’s always on the move, and always with exceptional vision,” said Clayton Taylor. “Under Tom’s leadership and the incredibly qualified staff, REI has an awesome statewide outreach.”

REI has been meeting the needs of Oklahoma businesses and communities for 28 years through a variety of economic development services. REI had its beginning in the small business lending arena. Today it has evolved into a multi-faceted economic development organization that has become the model of study for effective economic development services. • Offers a variety of business lending programs including the SBA 504. • Manages business incubators in several Oklahoma communities. • Offers down payment and closing cost assistance for Oklahoma working families. • Targets Oklahoma’s women-owned businesses with services of the state’s only Women’s Business Center from two locations, Durant and Oklahoma City. • Offers an equipment lease/purchase program designed to assist small, rural manufacturers with business needs. • REI New Markets Investment, LLC, administers the New Markets Tax Credit and Oklahoma State Tax Credit Programs to bring new investments into low-income communities.

REI Corporate Headquarters 2912 Enterprise Blvd Durant, OK 74701 Toll-Free: (800) 658-2823 Phone: (580) 924-5094

Alva Office

Northwest Technology Center 1807 S. 11th Street, Box 3 Alva, OK 73717 Phone: (580) 748-1375

Lawton Office

Cameron University CETES Building 2800 West Gore Blvd. Lawton, OK 73505 Phone: (580) 583-3725

Oklahoma City Office

Presbyterian Health Foundation Research Park 800 Research Parkway, Suite 305 Oklahoma City, OK 73104 Phone: (405) 319-8190

D e v e l o p m e n t

The migration from Durant began in part because of relationships established with some of the state’s financial institutions participating in commercial construction projects. “We would do a project at one of their locations in Eastern Oklahoma, say a dental office in Poteau,” Smith said. “A banker in Lawton wants to do a similar project and knows the banker in Poteau. So he calls and asks how they did their deal.” According to Smith, that’s how the word spread, from one banker to another, and from one client to another. So the sphere of influence spread beyond Durant and Southeastern Oklahoma. Today, REI services a portfolio of nearly 500 loans throughout Oklahoma, ranging from a laundromat in Cache to the hightech Cytovance manufacturing facility in Oklahoma City. “People ask ‘how did you get those New Market Tax Credits?’” Smith said. “Everybody looks at it as an overnight success. It was those years of laboring out there, doing the small business financing throughout the state. We’ve demonstrated to the government that we can access capital. “We can bring public and private sectors and the business entrepreneur together and make good things happen. We really are unique.”

Partnership Offices Eastern Oklahoma State College McAlester, OK 74501 Phone: (918) 302-3642

Seminole State College Seminole, OK 74868 Phone: (405) 382-9544

Incubator Locations Ada Allen Bennington Durant Warner Wetumka

Tulsa Office

Memorial Place Center 7633 East 63rd St., Suite 300 Tulsa, OK 74133 Phone: (918) 459-4515 innovators

& Entrepreneurs

Summer 2010

E d u c a t i o n a l

Governorâ&#x20AC;&#x2122;s 1

7 www.okgovernorscup.org

Get tied in: Visit the Gov. Cup Web site for the rules, forms, scorecards and many other resources for you to take advantage of. Also, become a friend of the Gov. Cup on Facebook for the latest updates and to connect with like-minded individuals.

Outreach: Your idea may be new, but creating a business plan and starting a tech-based business is not. Reaching out to industry and community leaders will add expertise and provide guidance to your team. Networking is the name of the game, and we suggest you find local mentors to be your sounding board.

Oklahoma

www.okepscor.org

Who wants to be an entrepreneur? This free, one-day workshop, sponsored by Oklahoma EPSCoR, will unlock the secrets to writing, valuing and presenting a techbased business plan. Open to all college students & faculty interested in competing in the Gov. Cup.

innovators

& Entrepreneurs

Research: Between brainstorming your idea and actually writing a plan, it is imperative that you establish its feasibility and know your market. This could be the difference between success and failure. Sometimes a feasible idea fails because of poor market and financial research. Yet another reason to ensure you have a multi-disciplined team.

Intent to compete: Complete the on-line intent-to-compete form.

Write and then rewrite: Producing a consistent and strong plan is easier said than done, especially with a deadline. This will be a great time to utilize the experience of your faculty advisor and mentors. Make use of your research and donâ&#x20AC;&#x2122;t be afraid to adjust your focus. Be flexible.

The idea: Do you have the next electronic gadget or know someone who does? Plans must be based around a new technology or concept or an innovative way to use an existing technology. Come up with your own idea or work with a local researcher or entrepreneur!

Pick an advisor: Your advisor should be a faculty person with the time and knowhow to guide you through the necessary steps required to write a well rounded business plan, as well as prepare you for the pitch. Remember, they receive cash prizes, too!

Summer 2010

The Pitch: Many teams develop great ideas and may even have a good business plan. However, to win the Gov. Cup requires a quality pitch. Practice, practice, practiceâ&#x20AC;Ś Be sure the right team members are pitching the right parts of the plan. Stay in your lane, let the finance experts talk about financials, the engineer talk about technical aspects of the product and so forth.

Teamwork: Business, marketing, engineering and finance students wanted! One of the first steps to take toward increasing your success is to form a well-rounded, highly motivated team. Take a look at your concept and find students with the skills needed to bring it to life.

E d u c a t i o n a l

s Cup RoadMap 11

Making the cut! The big announcement of the teams that will be presenting their plans.

Take the next step: Stay with your business plan and turn it into a real business. Or, start the process all over again and prepare to compete in next year’s Gov. Cup!

Oral competition: Early April is the oral competition, PowerPoints, presentations and revised copies of the plans are due.

Value add: There’s more to the competition than cash! Be sure to apply for an Oklahoma Business Roundtable Scholarship, i2E Fellowship or the OG&E Positive Energy Award.

Perfecting your pitch! You have made it a long way, and now you can see light at the end of the tunnel. But it isn’t time to relax yet. You and your team will be presenting your business plans to a panel of judges who range from business development professionals to venture capitalists. They are the real deal. Check and recheck your PowerPoint and be prepared for the Q&A. No softballs here.

Roll of the dice: On the Vegas and the Tri-State competition for an additional $90K in cash! There’s time to perfect your presentation and pitch. Are you feeling lucky?

Under review: Time to hold your breath while the judges review the plans and determine the teams moving on to the oral competition. Want to know how you’ll be scored? Judges’ scorecards and guidelines are available on the Gov. Cup Web site.

Hand it over!: Business plans are due right before Spring Break!

Bragging rights: You won! Everybody needs to know. First place winners will be on LIVE TV, attend speaking engagements, be guests on radio shows and have other opportunities to tell their story. There might even be a few chances for some shameless plugs for your business!

Awards dinner: Our version of the Oscars, but faster paced.

innovators

& Entrepreneurs

Summer 2010

E d u c a t i o n a l

Collegiate entrepreneurs

tackle big markets with high-tech solutions

tudents from college campuses across Oklahoma proved during the sixth annual Donald W. Reynolds Governor’s Cup competition this past spring that they clearly understood the passion that defines every successful entrepreneur: They devised technology-based solutions that solved big problems for large markets. The emerging entrepreneurs wrote business plans that outlined their strategies for taking the innovations to market and pitched them before panels of Oklahoma business leaders.

Results? The top three teams in the graduate and undergraduate divisions of the 2010 Governor’s Cup won more than $70,000 at the April 15 awards dinner. “This competition always brings out the entrepreneurial talent among the state’s most innovative college students,” said Tom Walker, i2E President and CEO. “For some of the competitors, the Governor’s Cup becomes a life-changing event that sets them on a career path of starting and growing new companies in Oklahoma.”

The Donald W. Reynolds Governor’s Cup collegiate business plan competition is underwritten by the Reynolds Foundation and local sponsors. AT&T was presiding sponsor of the 2010 competition, in which more than $100,000 in cash prizes were awarded. Winning teams in each division tackled problems that have perplexed the health care industry.

2010 Governor’s Cup Graduate Division Winners

In-Line Imaging: Michael Linville, Holly Roe, Ryan Reber (front row), Evan Mayse, T.J. Moen, Tobi Olusola In-Line Imaging from the University of Oklahoma claimed the $20,000 first prize in the graduate division with a business plan that described a new breast imaging technology that produces better images with a lower exposure to radiation.

innovators

& Entrepreneurs

Zephyrus: Sam Galoob, Lindsay Smith, Austin Spires, Matthew Collier, Jessie Haffner In the graduate division, second-place winner Zephyrus from OU won a $10,000 prize for its plan to use a software-based technology to more efficiently locate wind turbines for use in power generation.

Summer 2010

Novel Water Sofening: Samantha Collingsworth, Kip Kelley Winner of the $5,000 graduate division third place was Novel Water Softening from Oklahoma State University, which described plans to use special filters that eliminate chemicals from water used by the dry cleaning industry.

E d u c a t i o n a l

2010 Undergraduate Division Winners

UniPHI: Lucas Rice, Hamid Pezeshkian, Blake Trippet, Daniel Parrot

Swaasth: Peter Harlin, Jon Davis, Timothy Harlin

Samson Technologies: Daniel, Yonathan Reches

Won second place at Tri-State in the undergraduate division, UniPHI, also from OU, claimed the $20,000 first prize with a plan that outlined a Web-based technology that allows previously incompatible health care databases to communicate and share information with each other.

In the undergraduate division secondplace winner Swaasth from Oklahoma City University claimed the $10,000 prize with a plan to commercialize a chemical assay that determines the potency of vitamins and nutritional supplements sold in health food stores and pharmacies.

Third place winner in undergraduate division was Samson Technologies from OU, which claimed the $5,000 prize with a unique plan to use human hair to reinforce concrete in developing countries such as Haiti.

The first- and second-place winners in each category also competed in the annual Tri-State competition in Las Vegas against teams from Arkansas and Nevada. UniPHI won second place in the Tri-State event. The 2010 Governor’s Cup competition also rewarded both individuals and teams with prizes and scholarships in separate competitions.

Other 2010 Governor’s Cup Opportunities: CONTINUING EDUCATION: Three Governor’s Cup participants were presented Paulsen Award scholarships from the Oklahoma Business Roundtable during the awards dinner. The Paulsen Award was named in honor of Don Paulsen, longtime President of the Oklahoma Business Roundtable. Adele Rehm from Oklahoma City University and Daniel Reches and T.J. Moen from the University of Oklahoma each were awarded $5,000 scholarships to any Oklahoma college or university campus for the fall semester. The students won the award in a competitive interview process. The award also provides the opportunity to make a presentation to the Oklahoma Business Roundtable’s full membership at its annual meeting.

POSITIVE ENERGY: In addition to its second place graduate division prize, Zephryus also claimed a $5,000 prize in the first OG&E Positive Energy Award, which recognized the best business plan that described technology to enhance energy generation, conservation, new delivery methods or areas to use or generate energy more efficiently. Several members of the Zephyrus team are working to make the business plan a commercial success. “We trained this whole semester with the goal of winning, but to actually win the OG&E Positive Energy award, place second in the graduate division of the Governor’s Cup and then compete in the Tri-State Competition is truly amazing,” said Zephyrus team leader Austin Spires. “All the hard work paid off and will continue to do so in the future.”

OFFICE SPACE: The HÄLSA, Inc, team from Oklahoma State University was recognized as the first recipient of the Al Tuttle Business Incubation award. The award brings the winning team a year of rent-free office space and business services in one of four participating Oklahoma business incubators. HÄLSA, Inc. team members Niccole Grimaldi and Megan Horton wrote a business plan around the Securite Stability Frame, which provides support and balance to patients during physical therapy, rehabilitation and exercise. They both will continue on with the business concept and chose to incubate at the Business Development Center on the Meridian Technology Center campus in Stillwater. innovators

& Entrepreneurs

Summer 2010

O u t r e a c h

i2E Fellows Program Real World Experience- An area of emphasis for i2E and the Governor’s Cup is that of entrepreneurial development. Through the i2E Fellows program, which provides paid business-based fellowships with Oklahoma technology start-up companies, they work to build entrepreneurial talent. Underwritten by a grant from the Greater Oklahoma City Chamber and the participating companies, the i2E Fellows program draws students who apply for the competitive positions from the Governor’s Cup competition. The 2010 i2E Fellows were chosen after a series of interviews with participating companies.

Fellow: Phuong Le is working toward a Master of International Business at Oklahoma State University, where she received her BA in Advertising and Public Relations. Company: ENB Science, a Ponca City company that incorporates human pharmaceutical quality and technology for use in companion animal nutritional products. Project description: Phuong will contribute to the company’s international distribution plans, development of a Web-based community of users and production of promotional and marketing materials.

Fellow: Brie Caywood graduated from the University of Tulsa in May with a Bachelor of Science in Business Administration in Management with Specialization in Entrepreneurship. Company: ENB Science, a Ponca City company that incorporates human pharmaceutical quality and technology for use in companion animal nutritional products. Project description: Brie will coordinate launches of new products in the feline, pre-biotic and veterinary areas.

Fellow: Bridget Shuck is a rising Senior at Oklahoma City University. She is working toward a BSB in Marketing and a BA in Mass Communications. Company: MediaQuake, the Oklahoma City-based parent company of BuzzVoice, which converts news and blogs into audio files. Project description: Bridget will help develop a comprehensive analysis to assess potential areas for market development and resource deployment with a strong focus on promoting BuzzVoice with social media technologies.

Fellow: Adele Rehm graduated in May from Oklahoma City University. Finance and International Business. She holds a BSB in Marketing, also from OCU. Company: Otologic Pharmaceutics, an Oklahoma City company created specifically to commercialize promising technologies that address novel solutions for hearing and balance health. Project description: Adele will work directly with the company’s CEO, focusing on capital development, project management and competitive intelligence.

innovators

& Entrepreneurs

Summer 2010

O u t r e a c h

The Tulsa office of i2E provides space for i2E Fellow Brie Caywood to tackle projects for Joseph Wayman (left and inset photo) and ENB Science, while Brad Rosenthal (center) of Failsafe Hazmat Compliance left his home office to take up residency there.

ROOM TO GROW

i2E provides launch space in Tulsa office for client companies

ntrepreneurs create new businesses with a goal of finding a market by solving an industry problem. That’s just what i2E’s launch space in its Tulsa office has accomplished for entrepreneur Brad Rosenthal. “The difficulty in working from home is there was no professional place to meet with clients and have business meetings,” said Rosenthal, founder of Failsafe Hazmat Compliance, LLC. “And with school about to be out, my kids were going to make it very difficult to work from home.” Rosenthal solved his work-from-home problem by moving into a small office in the Tulsa office. Rosenthal is developing a database that provides compliance information for shippers of hazardous materials. Failsafe Hazmat is one of three entrepreneurial companies that are tenants in the company office, with a fourth company planning to open an office there in the near future. Joining Failsafe as current Tulsa launch tenants are ExpertTA and Seamless Interactive.

The Tulsa office also provides space for i2E Fellow Brie Caywood, who is serving a 10-week Fellowship for Ponca City-based ENB Science. Tenants pay $300 per month for an office that also provides access to meeting space, office equipment, break room and audio/ video equipment that allows meetings with people in distant locations. All of the companies are clients of Enterprise Director Richard Gajan, who said the proximity between i2E personnel and the launch tenants is a major benefit of their residency. “The way it works, you are at the coffee pot and a guy says ‘I’m working on this project, what are your thoughts on it?’” Richard said. “You give him your ideas and the next thing is he’s moving forward.” Rosenthal said he has drawn on both Richard and David Thomison, Vice President for Enterprise Services, for business advice during impromptu meetings in the office. “That is a wonderful benefit and really accelerated how quickly I’ve been able to get some of my projects done,” Rosenthal

said. “When I have little questions, I ask them at the coffee pot. Seeing them in the hallway is fantastic.” Added Jeremy Morton, founder of ExpertTA: “Having both Richard and David in proximity allows us to use them as a sounding board and get feedback on a lot of issues that come up on a day-to-day basis.” Morton employs a software programmer who works out of Expert TA’s office in the launch space. “It is extremely cost-effective,” Morton said. “The office space you get there for the amount that you pay for it is tremendous.” The incubator space also brings another benefit: camaraderie with other entrepreneurs who share similar experiences, Rosenthal said. “There is such a community of rooting for each other and trying to help each other,” he said. “That’s my favorite part of being in this facility, to have all these other guys who are going through these same struggles and same challenges that I am. When you are home you have no one to talk to but the dog. What a wonderful bargain.” innovators

& Entrepreneurs

Summer 2010

P a r t n e r s P a r t n e r s

Rethink Possible

“

”

AT&T has been a part of Oklahoma since before statehood, and we’ve worked hard to stay on the front edge of technology, offering our customers the latest in communications services

The Governor’s Cup business plan competition and AT&T share a common bond: both are all about innovation. AT&T got its start in the communications business more than a century ago because of innovation. And it has supported the Governor’s Cup as presiding sponsor the past two years because it sees the same spirit of innovation bubbling up from among the more than 150 participating college students each year. Students from campus all across Oklahoma researched and wrote business plans about new technologies that fit perfectly with AT&T’s new slogan, Rethink Possible. AT&T has been in the ideas business for a long time, and Rethink Possible reflects the company’s enduring commitment to constant innovation and pushing the limits of what’s possible to make life better for people. “AT&T has been a part of Oklahoma since before statehood, and we’ve worked hard to stay on the front edge of technology, offering our customers the latest in communications services,” said Bryan Gonterman, president, AT&T Oklahoma. It all started with the invention of the telephone in 1876. Today, AT&T has a communications infrastructure that spans the globe, provides a U.S. voice and data network that covers more than 300 million people and is the world’s largest communications company. And the innovation continues. AT&T is the leader in wirelessly enabling a wide variety of consumer electronic devices, such as eReaders, netbooks, personal navigation devices, digital photo frames and even

innovators

& Entrepreneurs

intelligent pill-bottle caps that remind patients to take their medications. The company is focused on connecting people everywhere they live and work, including across Oklahoma. Customers can connect to their world in any way they choose, including wireless and landline phone service, high-speed Internet and business data communications. AT&T Oklahoma has about 4,800 employees statewide. The company has invested more than $2.8 billion in its Oklahoma wireless and landline network since 1996. In just the last three years(2007-2009), AT&T has spent nearly $650 million to improve its Oklahoma network. These investments included the installation of additional high-speed Internet services and the expansion and upgrade of wireless service. AT&T’s 87 million U.S. wireless customers are provided service by an all-digital GSM network. GSM — or Global Systems for Mobile Communications — is the world standard for wireless communications and is used in more than 200 countries. AT&T operates the nation’s fastest third generation or 3G network, according to data compiled by leading independent wireless research firms. AT&T’s 3G network is available in Ada, Ardmore, Bartlesville, Enid, Lawton, Muskogee, Shawnee, Stillwater and wide areas of Oklahoma City and Tulsa. Nearly 20 cities will receive 3G this year. In areas of Oklahoma City and Tulsa, AT&T’s revolutionary U-verse TV service is available. The service was ranked “Highest in Customer Satisfaction in the South and West Regions Two Years in a Row,” according to

Summer 2010

J.D. Power and Associates. The company also offers the all-digital AT&T DIRECTV satellite TV service. Oklahoma was one of the first states to have AT&T Yahoo! High Speed Internet service in every city and town served by AT&T. AT&T Oklahoma also provides affordable phone service through one of the nation’s best Lifeline programs. Thousands of Oklahomans receive potentially life-saving telecommunications service for as low as $1 a month through the Lifeline and Enhanced Lifeline programs. Throughout its history, AT&T Oklahoma has worked hard to be a responsible corporate citizen and to support the communities where it does business and where its employees live and work. In 2008, AT&T Oklahoma contributed about $2.7 million through corporate, foundation and employee giving to support innovative technology programs and activities in the state that enhance education and community initiatives. The spirit of innovation reflected by student participants in the business plan competition is certainly why AT&T has strongly supported the Governor’s Cup. It’s all about innovation: Rethink Possible. Additional information about AT&T Inc. and AT&T products and services is available at www.att.com.

P a r t n e r s

www.okalliance.com

Oklahoma Alliance for Manufacturing Excellence, Inc. The Alliance is a not-for-profit organization providing a variety of support to Oklahoma industry. Through a network of Manufacturing Extension Agents and Applications Engineers, they provide hands-on resources for improving productivity, increasing sales, and reducing costs.

www.i2E.org

i2E: Turning Innovation into Enterprise Our programs and services are possible because of the financial and in-kind support of our partners. These valued organizations are dedicated to the advancement of science and technology in our state and are strongly committed to Oklahoma’s prosperous economic future.

i2E SERVICES: Our services are designed to assist researchers and entrepreneurs in turning their innovations into exceptional home-grown business opportunities.

We do this by:

Oklahoma

www.okepscor.org

• Providing hands-on product, market and business expertise designed to accelerate commercialization activities.

The Oklahoma Experimental Program to Stimulate Competitive Research

• Attracting and investing risk capital in advanced technology-based businesses.

Oklahoma EPSCoR’s central goal is to increase the state’s research competitiveness through strategic support of research instruments and facilities, research collaborations, and integrated education and research programs. They are funded through a three-year (FY2005-2008) $6M national Science Foundation Research Infra-Structure Improvement Grant matched by an additional $3M from the Oklahoma State Regents for Higher Education.

• Promoting an innovation based economy and homegrown economic development. i2E delivers services statewide through operations in Oklahoma City and Tulsa. In 10 years of serving Oklahoma, 25% of the companies have been from rural Oklahoma and nearly 45% have been from areas outside of Oklahoma City and Tulsa.

www.ocast.state.ok.us

Oklahoma Center for the Advancement of Science and Technology www.okcchamber.com

Greater Oklahoma City Chamber The Greater Oklahoma City Chamber works to create value-added membership opportunities and a business climate that attracts new businesses and enhances growth and expansion opportunities for existing business.

www.dwreynolds.org

The Donald W. Reynolds Foundation The Foundation is a national philanthropic organization founded in 1954 by the late media entrepreneur for whom it is named. Headquartered in Las Vegas, Nevada, it is one of the 50 largest private foundations in the United States.

As the state’s only agency whose sole focus is technology, OCAST is a small, high-impact agency funded by state appropriations and governed by a board of directors with members from both the private and public sector. OCAST works in partnership with the private sector, higher education, CareerTech and the Oklahoma Department of Commerce.

Mission: To foster innovation in existing and develop-

ing businesses by supporting basic and applied research and facilitating technology transfer between research laboratories and firms and farms, as well as providing seed capital for new innovative firms and their products and fostering enhanced competitiveness in the national and international markets by small and medium-sized manufacturing firms in Oklahoma by stimulating productivity and modernization of such firms.

OCAST Statewide Programs: Oklahoma Applied Research Support (OARS)

OCAST Inventors Assistance Service (IAS)

Oklahoma Health Research Program

OCAST Technology Business Finance Program (TBFP)

Oklahoma Nanotechnology Applications Project (ONAP)

Oklahoma Alliance for Manufacturing Excellence (The Alliance)

Plant Science Research Program

Oklahoma Technology Commercialization Center (OTCC)

R&D Intern Partnership Program Small Business Research Assistance Program (SBIR/STTR)

Oklahoma Seed Capital Fund (OSCF)

innovators

& Entrepreneurs

Summer 2010

att.com

building a network that revolves around you Today we are communicating with each other like never before — requiring a seamless network that is constantly growing smarter and more secure. Behind the scenes our 294,600 employees are pushing the Internet further than anyone dreamed. Our scientists and engineers at AT&T Labs are taking the fastest technology in the world and making it mobile and even faster. That’s why last year we invested more to improve and expand our network than any other company in America.* And we plan to invest $17 – $18 billion this year. All to keep you in control of your digital world.