MassChallenge Names 16 Winning Startups

Acquiring funding is no easy task for startups. Naturally, a competition such as the MassChallenge, which set out to award one million dollars in total funding across sixteen startups, attracted a lot of attention. Just recently, the competition announced its winners. (Image courtesy: http://bit.ly/deua6O)

The four $100k winners were enterprise software company Ksplice, location services analytics company Locately, water purification company OsmoPure, and shoe supplier for women with larger feet Samanta Shoes. The twelve $50k winners were 3Play Media, Abroad101, Energesis Pharmaceuticals, OsComp Systems, Pearl's Premium, Inc., RelayRides, Rentabilities, ScholarPro Inc., Seeding Labs, StorageByMail.com, Symmetric Computing, and Zyrra.

“MassChallenge is a tremendous initiative helping harness the collaborative strength of the brilliant minds attracted to the Massachusetts innovation ecosystem,” said Deval Patrick, Massachusetts’ Governor. “The Commonwealth has always produced and supported revolutionary thinkers and positive change agents, and our Administration continues this tradition as a positive force for change and as a proud sponsor and avid supporter of the MassChallenge Startup Competition and Accelerator.”

This year’s MassChallenge had 446 entrants, spanning 26 countries and 24 states. From this pool, judges selected the top 111 startups to take part in a 3-month accelerator program, which included free mentoring, office space, legal support, introductions to customers, and introductions to funding sources. The startups were judged on impact, scalability, competitive positioning, and execution. Finally, 16 winning startups were selected to pitch their ideas to a final panel of judges to determine their prize level.

“MassChallenge has brought hundreds of innovators to Boston’s waterfront. The entrepreneurs who have competed are the job creators of the future, and Boston’s Innovation District has been delighted to be their home and their launching pad,” said Thomas Menino, Boston’s Mayor.

According to John Harthorne, the Founder and CEO of MassChallenge, exit surveys revealed that eight startups chose to relocate their companies to Massachusetts as a direct result of participating in the competition. Harthorne also pointed out that MassChallenge has created more than 40 jobs in Massachusetts over the past three months. (Image courtesy: http://bit.ly/aGGWah)

“MassChallenge is an efficient and effective form of stimulus and is an ideal means for Massachusetts and America to harness and showcase the expertise and collaborative strength of our universities, investors, lawyers, entrepreneurs and businesses,” Hawthorne said. “After all, we’ve been providing revolutionary ideas since 1776.”

This year’s first MassChallenge seems to have been tremendously successful. The competition brought jobs and attention to Massachusetts and substantial funding to 16 deserving startups. Hopefully the MassChallenge will become an annual tradition and attract even more sponsors and participants next year.

[Sources: http://bit.ly/bxAjBE, http://bit.ly/deua6O]

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Integralis Opens Waltham Office, Will Hire 20%

Quality customer support is vital to the success of countless businesses. As the North American market becomes a larger, more important segment for global companies, many are driven to open regional support headquarters. This week, Integralis, a leading global IT security solutions provider, announced the opening of a Waltham, Massachusetts office. (Image courtesy: http://bit.ly/cpNOrJ)

“With east coast operations expanding, this new office allows us to support our growing roster of Boston-area clients and continue to recruit the best technology talent,” said Cary Conrad, Integralis’ president of the Americas.

Integralis’ new office occupies 5,000 square feet on 60 Hickory Drive in Waltham. The company plans to grow its U.S.-based staff by 20% this year to provide enough personal to cover its expansions. Various levels of finance, sales, and managerial professionals may find an employer in Integralis.

Presently, Integralis is Europe’s largest security solution provider, with offices in seven foreign countries: Germany, France, Sweden, Switzerland, Austria, the United Arab Emirates, and Singapore. The company currently employs just over 500 world-wide. (Image courtesy: http://bit.ly/cwX8sc)

The very fact that news of an established, global company opening a location in the Boston-area is not shocking says something about the resources the region has to offer. It will be interesting to see how quickly Integralis realizes its 20% expansion and long the company goes before calling for further expansion in the area.

[Sources: http://bit.ly/ao4Cf3, http://bit.ly/bYdho9, http://bit.ly/9unIBv]

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Q3 Venture Funding Down in Dollars, Up in Deals

Determining if investment conditions are improving can be difficult when the two common measures of progress, improvement as compared to the previous quarter and improvement as compared to the same quarter last year, paint different pictures. This week, New York’s CB Insights released information about Quarter 3, 2010 venture funding. In Massachusetts, the total dollar value of venture capital deals hit a five-quarter low of $466 million across 87 deals. While the number of deals was comparable to past quarters, it was 14 deals greater than Quarter 3, 2009. (Image courtesy: http://bit.ly/dC5Rmu)

In Quarter 1 of this year, Massachusetts saw $596 million in venture funding, or over 22% more funding than Quarter 3. In Quarter 2 of this year, Massachusetts saw $689 in venture funding, or over 30% more funding than Quarter 3. Nationwide, the trend of fewer dollars invested over more deals was also realized for Quarter 3, with $5.4 billion invested across 715 deals.

Nationwide, the healthcare sector received the most funding at $1.75 billion. California, Massachusetts, and Pennsylvania accounted for 53% of total healthcare funding, or about $92.7 million. Massachusetts received $228 million in healthcare funding this quarter, or 13% of the national figure, which was down from Quarter 2’s 23% of national healthcare capital. Within the state, healthcare accounted for 37% of deals and 49% of dollars invested, making healthcare the largest investment sector in the state by both indicators.

The internet sector received the largest number of deals nationally last quarter at 233, which accounted for just over $1.25 billion in capital. While these numbers were down from Quarter 2, 2010, they were up as compared to Quarter 3, 2009, when just $1 billion was invested in the internet sector across 194 deals. Comparable to the healthcare sector, three states dominated the internet sector, accounting for 70% of the deals and 70% of the capital: California, New York, and Massachusetts. Massachusetts also realized a partial shift in funding from the healthcare sector to the internet sector this quarter. (Image courtesy: http://bit.ly/cRp4iq)

It is not surprising that the top five deals in Massachusetts for Quarter 3, 2010 all involved healthcare companies: Dicerna Pharmaceuticals, Euthymics Bioscience, Matamark Genetics, Rhythm Pharmaceuticals, and Good Start Genetics. The top three cities in the state for Quarter 3 by dollars invested were: Cambridge, with 17 deals valued at $82 million total; Boston, with 11 deals valued at $78 million total; and Watertown, with 2 deals valued at $28 million total. Marlborough, Woburn, and Braintree followed close behind the leaders, taking in $27 million, $25 million, and $24 million in Quarter 3 funding, respectively.

While it is apparent that Quarter 3 investment activity was not as optimistic as people may have hoped for, it is not entirely disappointing. Money is still flowing, and Massachusetts is still holding a spot close to the top in key sectors. Of course, seeing the number of state deals increase as compared to last year also means that more businesses got the boost they needed last quarter. With just one quarter left in the year, let us hope we can end on a high note.

[Sources: http://bit.ly/anfXsq, http://bit.ly/cVOwmc, http://bit.ly/aquLzl, http://bit.ly/dC5Rmu]

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Executive Salaries Rise 3.3% - 4.2% Year-Over-Year

If you have not gone through a year without receiving a raise or sacrificing your once standard annual bonus, then you probably know someone who has. Companies all over the country have adopted these measures to maintain costs until the economy recovers. Perhaps that time is finally growing near. The 11th annual Compensation and Entrepreneurship study, released in conjunction with J. Robert Scoot, Ernst and Young, and the Harvard Business School, reported C-suite executives at private tech companies received a 3.3% year-over-year salary increase in 2010, while C-level executives in life sciences companies received a 4.2% salary increase over the same period.

“While salaries did increase for executives at both technology and life sciences firms in 2010, average increases are lower year-over-year than we have historically found. In fact, the average annual increase in salary over the past ten years has been five percent,” said Aaron Lapat, Managing Director at J. Robert Scott. “Although the rate of growth for these salaries has not returned to pre-recession levels, it is substantially higher this year than last, when we saw technology executives on average receive no raise at all.” (Image courtesy: http://bit.ly/dup3gw)

In fact, for 2009, the survey revealed that non-founder, C-suite executives at tech companies received only 56% of their target bonuses. Non-founder CEOs at these firms received just $53,000 on average, or nearly 15% less than the $61,000 they averaged in 2008. Life sciences executives were better off, having received 67% of their 2009 target bonuses on average, surpassing the 44% they received in 2008.

“The survey results indicate that we’re in a transitional period, where a mix of economic factors makes it challenging for companies to implement effective compensation strategies,” said Bryan Pearce, Ernst & Young’s Americas Director. “It’s important that company boards assess their current compensation structures so they strike the right balance between maintaining capital efficiency and retaining the top talent needed to seize emerging strategic opportunities.”

Surveys like this convey the trend of things improving, but not as fast as desirable. Ideally, of course, we would whiteness substantial salary increases, large enough to off-set years of salary freezes and sub-par bonuses. Improvement cannot be rushed, though. For now, executives are just going to have to be satisfied that salaries are at least back to moving in the right direction.

[Sources: http://bit.ly/bFYjKf, http://bit.ly/cNwvBo]

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Vogel Labs Startup Incubator to Open in Cambridge

For a while it seemed that independent startup incubators were not only trendy, but yielding positive results. Betahouse’s closing a few weeks ago lead some to wonder if larger, better-funded initiatives were making independent incubators obsolete. This week Vogel Labs has announced that it will open a 700-square-foot loft space between Cambridge’s Kendall Square and Central Square, demonstrating the demand for new incubators still exists.

Membership fees to join this new community will start at $100 a month. While Vogel Labs will provide the essentials, such as whiteboards, books, internet access, and desks, like many incubators, its primary focus will be on building a strong community.

“We are in no hurry to add members to Vogel Labs,” Kevin Vogelsang, founder of Vogel Labs, said. “Growing a quality community is not something that can be done in a hurry.” (Image of Vogelsang courtesy: http://bit.ly/dvRfkU)

According to one of Vegelsang’s blog posts, his incubator will be “a place where a purposeful person can make anything, and have a community surrounding them that will push them farther than they could’ve gone alone.”

“It might not be businesses at all,” Vogelsang said in regards to potential members. “It might just be someone that wants to do a project. A lot of businesses come out of wanting to do cool stuff. When the right culture happens, the right mix of people, a lot of things happen spontaneously.”

Vogelsang expressed that the future direction of Vogel Labs will be determined by the community. If more space is needed, Vogel Labs will find it. If more resources are needed, Vogel Labs will acquire them. Overall, the concept of what the incubator will grow into is very fluid.

Obtaining financing and leasing a location are key to starting an incubator, but will only take one so far. It is apparent from reading Vogelsang’s blog that he is passionate about his incubator--and that may be his most valuable asset moving forward. If the comments Vogelsang’s blog posts have generated are any indication, Cambridge-area entrepreneurs and thinkers are very excited about Vogel Labs and looking forward to joining its community.

[Sources: http://bit.ly/9qB9UB, http://bit.ly/benEmp, http://bit.ly/adUuTB]

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Holyoke to Open $168M High-Performance Computing Center

Today computers power everything from cars and traffic lights to coffee makers. While nearly every business person keeps a smart phone or laptop handy, the demand for computing power is still tremendous. This week, Massachusetts’ officials broke ground on a “$168 million high-performance computing center” in Holyoke.

“This will be the latest and most cutting edge facility of this kind in the country,” said Gregory Bialecki, Massachusetts Secretary of Housing and Development. (Image courtesy: http://bit.ly/cgLFza)

According to the interim executive director of the center, John T. Goodhue, once the facility is completed sometime in 2012, it will be capable of processing trillions of bytes of data each day. As anyone who has ever overworked their laptop knows, all that processing can cause a computer to overheat very quickly. Thankfully, Holyoke’s canal systems provide easy access to river water, which will be used to cool the center’s mainframes.

“The center is going to be a unique resource,” Governor Deval Patrick said. “It’s already become a magnet. You know the number of universities and companies that are partnering with us.”

Aside from $25 million raised from taxes, the center is funded by its partners: the University of Massachusetts, the Massachusetts Institute of Technology, Boston University, Northeastern University in Boston, Cisco Systems Inc., and EMC Corp.

“It’s kind of an incubator for the next generation of technology, including energy efficient information technology,” said Patrick Cooley, EMC Corp’s spokesman.

Presently, unemployment in Holyoke is at 12%. While the center itself will require just twenty full-time employees, the town is hopeful that its opening will draw new businesses to the area.

“You need someone to be the first ones up to bat, then everyone realizes what a good idea it is and what a great location it would be,” Holyoke’s Mayor Elaine Pluta said. (Image courtesy: http://bit.ly/cvmMnv)

In addition to the computing center, Holyoke will market the city’s easy access to promising candidates from the nearby Holyoke Community College and Springfield Technical Community College, proximity to relatively cheap hydroelectric power, and great broadband connectivity.

“It’s not that jobs are going to naturally flow to the center,” explained Robert C. Holub, chancellor at the University of Massachusetts at Amherst. “It’s something that is going to require a lot of work.”

Of course, as UMass President Jack Wilson pointed out, people can also access the center remotely, and research is often labor-intensive. “So that generates jobs all over the commonwealth,” Wilson said.

It is uncertain whether this computing center will help Holyoke take charge of its unemployment by bringing new companies to the area, but with the number of big-name partners promoting the project, the odds seem to be in the city’s favor. Deciding to market Holyoke’s other perks, such as cheap electricity and great broadband connectivity, along with the computing center, is a smart idea. Many locations have a single selling point, with any luck, Holyoke’s collection of selling-points will prove irresistible.

[Sources: http://bit.ly/cz6P6i, http://bit.ly/9ONN2S, http://bit.ly/9lFtMm]

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Boston's Apperian Names David Patrick CEO

Handing over the leading role in your business has to be a difficult decision for a founder of a company. While putting your business in another’s hands involves a substantial amount of risk, as long as the candidate is chosen with care, a new leader can steer the business towards unseen levels of success. This week, Chuck Goldan, founder of Boston’s Apperian, Inc, a provider of iPhone applications and mobile platforms, named David Patrick its CEO. (Image courtesy: http://apperian.com/)

“Apperian is a leader in providing enterprise-focused mobile application development and management solutions in an exploding market,” said Patrick. “I’m excited about joining the team at Apperian, with its proven track record in developing transformative mobile apps for Apple and Google platforms and developing solutions to help enterprises create, deploy, and manage mobile applications.”

Patrick brings over 25 years of executive experience in the software industry to his role at Apperian. Most recently, Patrick served as CEO of xkoto, an enterprise database virtualization company. Before that position, Patrick served as VP and General Manager at Novel, managing the company’s SUSE Linux and Netware operating systems. Patrick was also president of The Learning Company and Mattel and held various leadership roles at WordStar, Sun Microsystems, Ashton-Tate, and Lotus. (Image courtesy: http://bit.ly/b8cz6k)

“To be able to attract an executive like David is a testament to what we have built at Apperian over the last several years,” said Goldan. “This firmly positions our company to take the major next step in growth.”

From looking at his past, it seems certain that Patrick has what it takes to lead a software company. It is easy to see why founder Goldan was enthusiastic to have Patrick join the Apperian team. I am sure Goldan can relax knowing his company is being lead by someone as seasoned as Patrick.

[Sources: http://bit.ly/bRmTxa, http://apperian.com/]

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