Innova gets funding injection

Memphis Business Journal
October 5, 2007
By Toby Sells

The Memphis Bioworks Foundation will receive $11.5 million over the next five years from MemphisED to launch Innova, a business accelerator for biotech start-ups.

Innova will get annual allocations, but will get $2 million in its first year, according to the agreement. Most of the money will be spent investing directly in small, innovative technology companies.

MemphisED is an economic development initiative led by the Memphis Regional Chamber of Commerce to create new jobs and capital investment over the next five years. MemphisED funds come from the public and private sectors.

"Innova is a call to entrepreneurial action. The formation and execution of this is right in line with what we think we should do and it's been a part of our strategy since the beginning," says Bioworks president Steve Bares. "We've said all along that the critical things we have to do in order to build the bioscience industry in Memphis is to build infrastructure, drive entrepreneurship and grow the work force."

The first order of business for Innova will be to find and install a leadership team. Bares says he's already been talking with potential candidates to head the new organization. In its first year, the organization is also expected to approve an assessment process for businesses to fund, invest in at least two companies and be running at full steam. The organization's business plan is already complete, one of the key year-one benchmarks.

Through Innova, the Bioworks Foundation can mentor companies and help them build business plans. From there, those companies can work with other incubators like the FedEx Institute of Technology, Emerge Memphis and Bioworks.

"We are expecting companies that come to us will be in various stages of development," Bares says. "They'll come to us with technology, a patent or an idea and we'll help them assess the viability of the business. If they are the kind of company we are looking for, then we can actually help them reach the next stage and attract additional capital to the organization. We don't expect them to be fully baked."

Bares already has business plans from a dozen or so companies prospecting for seed capital. The companies want to improve biologistics, or find new therapeutics for infectious and viral diseases or produce and manufacture chemicals needed to support the biofuels industry.

"It's amazing that if we could harness even half of these ideas we could transform the economic base of the community," Bares says.

Ideas generate companies all the time. But biotech companies need a lot of start-up money. So, they'll take their business wherever that money comes from.

"It's a no-win situation if an entrepreneur has roots in Memphis, would prefer to stay here, but has to leave to start their business," Bares says. "Memphis wins when those companies stay and grow in the area."

For Memphis Regional Chamber president John Moore, creating those jobs is a key element for this project and is why the Chamber agreed to help fund it.

"Entrepreneurship is a key generator of jobs and we've had a long history of entrepreneurship here and it's important to tap into that," Moore says.

For proof of the economic impact that entrepreneurs bring, he points to the Chamber's membership, most which are companies that employ less than 50 people. But those companies had to get started somewhere.

"There's a lot of good ideas out there that might not make it to market or to the consumers because the companies don't have the resources to develop their ideas," he says.

The investment return ratio on a solid biotech company, Bares says, is one to nearly 20. So a $10 million investment has the potential to generate up to $200 million in returned capital to the city.

Innova will also be responsible for helping universities and companies to license intellectual property. The goal there is to pair entrepreneurs with promising technologies, helping bridge the gap between scientists and business people.

Memphis Bioworks Foundation

Non-profit bioscience industry developer
President: Steve Bares
Address: 20 S. Dudley
Phone: (901) 448-8800
Web site: www.memphisbioworks.org

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