Lifting Up Startups

The Register Guard | July 29, 2013 3:21 a.m. | Updated: July 29, 2013 10:21 a.m.

Contributed By:

Ilene Aleshire

The goal: Help entrepreneurs get companies off the ground and speed up the growth of new companies — primarily tech firms — in order to create well-paid jobs in Lane, Linn and Benton counties.

The players: Local and state governments, universities and community colleges, research centers, business organizations and business people in Eugene, Springfield, Corvallis and Albany.

The plan: Provide affordable lab and office space for entrepreneurs in the southern Willamette Valley and tie together resources — including university labs full of pricey equipment, researchers and people with business expertise — in a way that hasn’t been done before to support the entrepreneurs.

The people behind the Regional Accelerator Innovation Network, or RAIN, hit the gas after the Oregon Legislature recently allocated $3.75 million to get the project off the ground. That money, at least some of which will come from bonds sold by the state, will be matched with local contributions, said Kimberly Espy, vice president of research at the University of Oregon and Ron Adams, executive associate vice president for research at Oregon State University.

“We would be fundraising over the next couple of years, supplemented by bonding that was allocated to RAIN,” Adams said.

With the funding approved, the next step will be for Eugene Mayor Kitty Piercy and Corvallis Mayor Julie Manning to convene a committee to develop the business plan for RAIN so that centers in both cities will be up and running as soon as possible, according to Chuck Williams, the UO’s associate vice president for innovation. Groundwork already is under way on the project, he said.

Espy and Adams said efforts have begun to find space in Eugene and Corvallis close to UO and Oregon State University for the two “anchor centers” that will house the startups. The amount each center will receive will be determined after the mayors convene the planning committee Adams said.

He said organizers initially are looking for about 2,000 to 3,000 square feet of space to rent near OSU for the Corvallis center — “until we have capital to acquire space.”

Although details of how the centers will operate are still being worked out, and they are still looking for their initial homes, Adams said organizers in Corvallis have started seeking companies for the accelerator programs. Some of the firms that are coming into the program already have been set up, he said, adding, “Some are just business concepts, some are coming from students, some from faculty research.”

At this point, the process for deciding who are likely candidates for the anchor center is somewhat informal, Adams said. But, ultimately, there will be a committee to evaluate proposals. Initially, the center will be able to accommodate five to 10 companies, he said, who will be expected to graduate at some point into space outside the center.

But, Adams added, even after companies have left the nest, the plan is that they will still retain ties to it, both as a resource for ventures that succeed them and as part of a network of tech companies affialiated with the centers.

Mentors, expertise, funding

Espy said organizers in Eugene hope to work with community partners such as PeaceHealth and the Eugene Area Chamber of Commerce to identify space near UO that can become the Eugene anchor center, which will cater to startups that have gotten off the ground but are searching for mentors, expertise and funding.

It’s important to have both centers close to the universities so there is access to labs that offer tools startups could not normally afford, Espy said, such as those found in the CAMCOR center at UO. CAMCOR offers what UO calls “capital-intensive” — meaning extremely expensive — equipment for microanalysis, electron microscopy and semiconductor device fabrication, among other things.

In addition to these physical resources, there are key people at the universities, Espy said, from researchers to student entrepreneurs to faculty with business and legal expertise. “Figuring out how to get a business started, finding space, getting a budget planned, these can be daunting,” she said.

In addition, she expects the center in Eugene to be able to tap into some programs sponsored by the Eugene chamber of commerce, such as the Smart-Ups group of entrepreneurs and the annual Willamette Angel Conference, a partnership with the Corvallis business community.

Springfield looks for a role

Springfield also wants to play a role in RAIN, even though neither university is located there, said Dan Egan, executive director of the Springfield Chamber of Commerce. “I think downtown has potential for an affordable location for some of the startup stage businesses coming out of the RAIN incubators,” he said.

Egan said innovators tend to gravitate to places where they meet others like themselves, where there is capital and work force support.

“Most of the time, that means Portland in Oregon,” he said. “If you track patents, you will find thousands more taken out in Portland, with a tenth of that number in Corvallis and a one-third of the Corvallis number in Springfield/Eugene. That tells me something.

“ ‘Smart’ places need to be created — zones for young and the not so young creative folks to percolate and produce ideas that turn to products that foster business-building. That may mean offices that are not typical office space; close proximity to outstanding crafted beer, dodgeball tournaments and cool people to hang with,” he said.

The problem of successful startups leaving Lane County for other, larger pastures such as Portland has long vexed local economic development officials.

RAIN hopes to find how to keep startups in the southern Willamette Valley, Espy said.

Espy said organizers initially were hoping for more state startup money. She said she hopes eventually to have 22,000 square feet of startup space in the two centers in Eugene and Corvallis.

She and Rick Spinrad, vice president of research at OSU, asked legislators for an initial $5 million for facility acquisition and improvement and $2.5 million for program development, staffing and other costs when they testified in the spring is support of the bill to fund RAIN, which was sponsored by Sen. Lee Beyer, D-Springfield. But, even though the full request wasn’t funded, “(legislators) said once we got started we would be welcome to return after showing success,” Espy said.

And, she said, there is reason to be confident that RAIN will be able to show success. Both universities have a track record of students or faculty members creating successful companies, Espy said. Together, they have created more than 45 companies totalling 600 jobs that were spun off from the universities in the past 10 years.

Plus there have been avenues for years for entrepreneurs to work with faculty members and graduate students at the universities, for example through the small business clinic run by the UO law school.

Keeping Oregon competitive

Mike Marusich, a UO employee, founded two bio-tech companies that were successfully spun off from the UO to stand on their own: MitoSciences Inc., which developed technology used for research in cancer, neurodegeneration and metabolic disorders, and mAbDx Inc, which developed diagnostic tools for a variety of illnesses, including diagnosing malaria and monitoring the effectiveness of treatment.

Marusich said the RAIN centers in Eugene and Corvallis will make it easier for entrepreneurs starting up tech companies not just because they will offer shared lab space and equipment, mentors and advisers, but because the entrepreneurs will learn from one another. “It’s extremely helpful and important to have colleagues nearby that have different but complementary and useful skill sets,” he said.

“RAIN will help all of us by encouraging growth of more small companies — reaching a critical mass of biotech and other startups will transform the local business landscape,” Marusich added. “The more startups we have, the better it will be for everybody.”

Espy and Spinrad told the Legislature in April that the southern Willamette Valley has potential to grow into a significant tech center.

“Whether we fully recognize it or not, we have all of the right ingredients and much of the impact of other larger, more well-known regions like Silicon Valley or the Research Triangle,” they said in their joint testimony.

But, they said, “For new technologies to spur job growth and launch new industries — the kind of industries and jobs that will keep Oregon globally competitive — they must first surmount several key hurdles.”

“First, the concepts have to make it out of the lab and be proven commercially viable,” they said. Existing funds set up by the state have been doing this, they said.

“The next hurdle is taking the innovation to market and scaling up new ventures,” Espy and Spinrad said. That’s where RAIN comes in.

“There are companies waiting for this resource — new startups by university students, such as Suprasensor in Eugene, which has developed new techniques for precision agriculture that senses nitrate levels in soil to minimize fertilizer inputs and maximizes yield and profit, or Inpria in Corvallis, which designs and manufactures solution precursors for the deposition of high-performance thin films, addressing needs in device fabrication and patterning across multiple industries,” Espy and Spinrad said.

“RAIN represents the next step for the innovation economy in Oregon,” they said.

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