Matching Startups with Leaders
Innovation Partners are building leaders in the startup world
What do these companies have in common: Cisco, Symantec, Amgen, Biogen, Firefly, and E*TRADE?
They are just a few of the companies that spun out from universities and research institutions that have become household names.
Rev1 is excited to be working with our Innovation Partners like OSU, Nationwide Children’s, and OhioHealth, to spinout and commercialize the next wave of groundbreaking technologies. Last year alone, Rev1 supported 11 research institution spinouts with $2.4 million invested.
Spinouts from research institutions are unique in that their underlying technologies are often invented by leaders who want to move their discoveries into the marketplace, but don’t want to leave their day jobs in research and academia.
This creates an extraordinary mutually beneficial opportunity for business leaders who are interested in becoming involved with a startup in a mentoring or leadership position and for scientists who want to continue to discover, invent, and teach.
Connecting Experienced Leaders to Startup Opportunities
With the support of our Innovation Partners, Rev1 has helped match business leaders with scientists and inventors in multiple portfolio companies. Here’s how it works.
With us, every opportunity starts with market validation. We work with inventors and our Innovation Partners’ commercialization groups to thoroughly understand the technology and its application. Ideas that seem to have market potential then participate in Rev1’s Customer Learning Lab.
For ideas that prove market traction, we construct a business model that translates the potential of the technology into a business plan. We then use that plan inside the framework of our Investor Startup Studio to interest the right kind of leader. The initial connection is often in a mentoring capacity.
By “right leader,” by the way, I don’t mean the business person who “falls in love with the technology.” That’s not the focus. We want to earn interest with the business leader through the potential of the business model and markets.
Step 1: Market Validation and the Business Model
With AwareAbility Technologies, an OSU spinout building solutions through the Internet of Things (IOT), the technology was sound, but the startup faced challenges of market validation and would likely needed to pivot.
The company needed a leader with an electrical engineering background, startup experience, and some understanding of IOT. It’s not a combination we see every day. When Vasil Hlinka, now CEO of AwareAbility Technologies, said he would like to be part of a startup, things clicked.
“My exposure with turning organizations around began while I was with a large multi-national corporation, and it involved a new division launch,” said Hlinka.
“As part of those efforts, I developed a taste for building something new,” he said. “I was very aware of the startup hype, and it was always something I wanted to look into. Last year, Rev1 presented me with an opportunity to do just that. Remaining as open and flexible as possible really helped me navigate the many course corrections that happened early on.” Gary Ross, CEO of Med-Compliance IQ, invested time validating the potential of the business and the startup’s business model before he took the plunge. Med-Compliance’s WoundWise IQ is a new product that improves the treatment of patients’ wounds.
“I met with the inventors and was impressed with their talent, expertise, and vision. I also valued that Rev1 was excited about the opportunity,” said Ross. “The technology is solving a very manual process that is ripe for new solutions.” Patients are in a difficult situation, and by bringing to market this patent-pending intellectual property from OSU, we can help improve their treatment. In some cases, we can help save lives,” he said.
Step 2: Confirming Complimentary Skills and Chemistry
Once we have that interest, the next step is to see if the business person and the scientist are compatible by asking the business person to advise on a specific aspect of the business.
Nicole Weidner, CEO of SuperH, has always had an entrepreneurial spirit. “I’ve always wanted to do this; I was looking for the right opportunity when Rev1 introduced me to SuperH,” she said.
SuperH is a data analytics firm specializing in analyzing global information about science and technology intellectual property. Weidner, a mentor within Rev1’s program, had experience in the industry. When she met SuperH co-founder Stephanie Hughes and saw what SuperH was doing, Weidner was intrigued.
“The potential of the business solutions clicked for me. I believed in the people and the technology,” Weidner said. “They have a lot of integrity, and we are compatible. I had the opportunity to see what they were doing and wanted to become a part of it.”
Step 3: Ownership Alignment
Anyone who joins a startup in a leadership position needs to be passionately aligned with the startup’s business plan. The plan often requires almost all the company’s available capital to prove the product in the eyes of the customer, which leaves little capital for direct salaries.
The subtleties of equity alignment can be tough to negotiate; there must be a significant contribution of equity.
In general, founders have the means to work on the new venture for a year or two without compensation. Some are cash-out entrepreneurs or have benefited from a previous success. In some cases, they have severance. Others are retired. Almost all have a consulting business.
“There is no pay,” Ross said. “You have to have a financial strategy to carry you through because it is a long financial runway to pull this off.”
For Nicole Weidner, it was now or never.
“There are a lot of financial factors to consider—the benefits and the income, and more,” she said. “You reach an age where you can really focus on making money and retirement, or you can take a risk to do something you feel passionate about. I gave up a paycheck, a risk to me worth taking, to take this big risk and have a lot of fun. It felt like it was something I had to do.”
Matching Opportunity and Desire
Every mentor who joins Rev1’s program signs up because they want to contribute to helping a new young company succeed. Mentoring a Rev1 portfolio company, whether for two hours a week or two days a month, is a great way to engage. Mentors can help one or many companies this way.
Sometimes an individual wants to take entrepreneurial leadership to the next level. They want to have an enduring impact; they know that there’s a limited time for any of us to be able to change the world. They become passionately aligned with an entrepreneur’s vision and business plan. In Nicole Weidner’s words, everything clicks, from the technology to the people, to the customers.
When this happens, we witness an amazing level of commitment from mentors who become startup leaders, determined to help the company succeed.
If you would like to learn more about becoming a mentor, as a path to help or as a path to lead, reach out. We’d like to talk with you.