Jay Sachetti joined Jeff O’Brien, partner at Husch Blackwell and Dyanne Ross-Hanson, president of Exit Planning Strategies talked about the market for mergers and acquisitions, exit planning opportunities for companies that don’t end up for sale and how companies can maximize their eventual sale price during an early October panel at the first Upsize on Tap event at Summit Brewing Co. in St. Paul.
When the state Legislature passed a law requiring employers to provide paid leave and safe time for employees, Justin Bieganek started hearing differing details from friends, colleagues and peers.
At an awards dinner in early November, StemoniX was named by Singularity University’s Exponential Medicine one of five companies to claim a 2019 MEDy Award.
The MEDy awards recognize companies that are creating new solutions to redefine health and medicine and are on track to help millions, if not billions of lives. StemoniX was named “Most Disruptive.”
It was just the latest set of accolades collected by StemoniX.
The company, which has invented products that allow for testing chemical reactions between drugs and human cells while they are outside the body, has come a long way in the three years since it was on local stages selling Minnesota Cup judges on the efficacy of its product.
The idea stemmed from co-founder Ping Yeh’s own battle with cancer. The initial treatments did not work well and left him with long-term side effects he thought could be averted by better testing methods.
For winning the Minnesota Cup in 2016, StemoniX won $80,000 that was used quickly, Yeh says, on general business needs. Those dollars are long spent. But the benefits of competing in and winning the competition continue paying dividends.
“It was a huge moment in our company’s history,” he says.
Upsize reached out to several of the last decade’s winners of the Minnesota Cup to get an update on how their companies have fared in the years since. Yeh says he’s now on the radar of some of the top medical minds in the country.
The company has secured more than $20 million in investment through various sources in the three years since the Minnesota Cup win. And in recent months, StemoniX’s have received validation from several quarters, including the IQ Consortium, a pharmaceutical and biotechnology association aiming to advance innovation and quality in the industry.
Long-term, there’s hope that the company can contribute to helping researchers solve the causes of Alzheimer’s, Parkinson’s and other diseases of the brain.
“I feel like we’re getting our legs under ourselves to drive forward here,” he says. “The last several months have been just an explosion of increased customer traction, results and it’s been awesome to experience.”
When asked if the company would have eventually gotten where it is now without the assistance of the Minnesota Cup, Yeh says he’s not sure.
Well educated, but not a public speaker or entrepreneur by trade, Yeh says he learned a ton about honing the company’s message and communicating verbally to those he’s pitching. He found some investors and other supporters in the community who offered media training. It ended up being a tremendous experience.
“Of course, just getting that top of mind communication out to the public about us and our brand,” he adds, recalling being interviewed on the CBS Morning News the morning after finding out StemoniX had won. “That was a lot of fun. It has a ripple effect throughout the community. It gives you confidence that if you can present on a stage at Minnesota Cup, you can do it anywhere.”
Aneela Idnani feels similarly. In 2018, her company, HabitAware, swept both the Minnesota Cup and the MEDA Million Dollar Challenge. The company’s Keen bracelet, that can be programmed to pick up on repetitive motions, such as hair pulling or nail biting, and programed to vibrate when it catches users in the act. It also was named one of Time Magazine’s best inventions for 2018.
“2018 was a big year for us in terms of being in the news,” she said.
As with other winners, she says the money helped, but the act of building a business plan on paper instead of in your head, the mentorship from people all over the Twin Cities business community and the overall visibility created by the win have helped even more.
“It’d been in our heads since we started on this path of developing a smart bracelet,” she says.
“That was super helpful. Without that application process and without those mentors, who are steps ahead of us in what they are doing … it’s more than just the prize money. The community support, the connections you make. It’s a testament to the Twin Cities start-up community wanting to be part of something that is helping people and that is changing lives.”
After a wild year, HabitAware is settling down and staying focused on moving the product forward.
The company is using the award money, along with a grant procured from the National Science Foundation and the National Institutes of Health, to improve on the Keen products.
“This has been a heads down year of taking these new ideas and making that new product we’re working on,” she says. “We’ve been using the funds for research and development.”
Idnani, through connections made during the MEDA challenge, has worked on building her confidence through coaching she’s received on improving her public speaking skills. And she’s been sharing the story of HabitAware, which grew from her own battle with Trichotillomania, on a wider scale. Earlier this year she spoke on mental health during a TedXFargo event in front of around 2,000 people.
“That wouldn’t have happened if I didn’t go through the MEDA challenge,” she says. “And the MEDA Challenge wouldn’t have happened if we hadn’t done the Minnesota Cup. … It’s been phenomenal how the Twin Cities ecosystem has rallied around us.”
One of the early lessons Matt Ronge, co-founder of Astro HQ, learned from Minnesota Cup judges and mentors was to not undersell the company. The projections, they said, weren’t ambitious enough. And, he says now, they were right.
Turns out Astropad, which allows users to turn their iPads into drawing tablets, was just the beginning. Since winning in 2015, the company has launched Astropad Studio, a subscription-based professional edition. Then, on the hardware side, it launched Luna Display, which enables the iPad to be a full wireless sector display.
So far, Astro HQ has focused all its efforts on Apple products. Down the line, Ronge says, the company plans to introduce additional products, including similar technology to those already existing products for Windows as well.
“We think that’s at least 50 percent of the market we’re missing,” he says. “We see huge potential there.”
When Astro HQ participated in the Minnesota Cup, it was just Ronge and co-founder Giovanni Donelli. The company now has 14 full-time employees. And it has accomplished this growth without the assistance of any outside investors. Venture capital will be considered down the line if there’s a project that requires it for completion, or if there is a dramatic increase in the need for ad spend or some other unforeseen expense. But so far, growth has been slow and steady enough where it’s been unnecessary — which has allowed Ronge and Donelli to maintain control.
They remain in contact with some of the mentors they met during the competition. Ronge and Donelli are knowledgeable about technology, but new to owning their own shop.
“We go to these folks with business problems,” he says. “That’s been really helpful, be it how do we approach the market or we’ve had help with hiring, management and areas where we know we need to hire somebody but we’re not quite sure what to hire for. … We were software developers. We were working on our business chops.”
And you don’t necessarily need to win the Cup to enjoy the benefits, he adds.
“It’s great to win the prize, it’s great to get the press coverage,” Ronge says. “Even if you participate and you make it fairly far in the process, you’re going to get a lot out of it.”
Steve Anderson, CEO at Preceptis Medical, says his company got lucky when it won the $65,000 pot that came along with the 2013 Minnesota Cup.
“We knew we had a strong idea and a good product,” he says. “We thought it might be difficult to beat the software companies.”
But win Preceptis did, and, as with other winners, they say the prize money helped, but the contacts met along the way were an even bigger deal.
Preceptis, which manufactures the Hummingbird Tympanostomy Tube System that minimizes surgical pain and trauma during ear tube placement, has approvals allowing physicians to use moderate sedation for routine procedures. Anderson says he’s optimistic the company will soon get clearance allowing physicians to perform the procedure using nothing more than a topical anesthetic to numb the eardrum.
“It’s hard, grinding work,” he says of the process, which has taken longer to gain approvals because regulators are more cautious with pediatric products. “Yet, it’s needed. It’s a moral crusade. We know how important this is going to be.”
It’s been a long road since he and a neighbor started working nights and weekends on bringing this idea to complete fruition.
“That would be the big one,” he says of this last approval. “At that point, everybody benefits. Kids avoid the risks of general anesthesia. It’s way more convenient for parents. Its way less costly for parents because you’re paying for an office procedure instead of a procedure in an operating room. The payers want it because the cost of doing things in the office instead of the [operating room] is significantly less. And the [emergency medical technicians] want it because everything works better for them.”
Anderson says he recalls getting a mentor through the Minnesota Cup competition that helped Preceptis improve its plans for marketing, raising money and putting together a solid business plan.
The company has since reportedly raised nearly $10 million through several rounds of financing, including a Series B round that closed in 2018. Capital does remain the company’s biggest need, he adds.
Anderson says in recent years he has gone back and spoken to and mentored some Minnesota Cup participants as a way of giving back for the help Preceptis received.
“We are big fans of the Minnesota Cup,” he says. “We are always available to support the Minnesota Cup and its companies. Even more than that, any entrepreneur in the device space. It’s a fraternity. It’s a difficult space.”
CONTACT:
STEVE ANDERSON, 612.327.4795;
st***@**************al.com ; www.preceptismedical.com.
ANEELA IDNANI, president and co-founder of HabitAware: an****@********re.com; www.habitaware.com.
MATT RONGE, co-founder and CEO of Astro HQ:
ma**@******hq.com; www.astropad.com.
PING YEH, co-founder of Stenomix: 855.783.6669;
in**@******ix.com; www.stemonix.com.
As the name suggests, Owatonna-based Kamp Automation looks for customers with a process they’d like to automate. It could be a small, inconvenient, tiny part that people can’t assemble. It could be a high-volume product so needed that the customer can’t find enough labor to produce it in the necessary quantities. “We’ll work anywhere from medical device companies to the seed industry for corn and soybeans,” says Kent Patterson, co-founder, president and CEO. “We just jump all over wherever there is custom automation.” The company started in his garage. Patterson and his partners built a machine. The company started to grow to the point where now it has 48 employees — and had a bunch of people and stuff in different locations. “We went from a garage to a shop to a shop and just kept moving to new places and signing leases,” he says. “We got to a point where it’s like, OK, this is getting big enough and sustainable — we felt that we wanted to look for our own space.’”
