Capitalizing on science

Head of new venture capital firm finds ideas aplenty

The Commercial Appeal
November 22, 2007
By Daniel Connolly

It's only been about two weeks since Ken Woody became president of Innova Inc., a new firm meant to launch small science-based companies.

But Woody has already heard formal presentations from three firms looking for funds, and he's in touch with another 12.

He said he's surprised so many companies are banging on his door to share their ideas.

"I thought I'd walk in and it would be really tough," he said. "I'd have to go out and beat the bushes and advertise."

The companies are vying for a piece of the $11.5 million that's coming to Innova over five years from the Memphis Fast Forward economic development plan, an initiative funded by the private and public sectors.

Innova, which was spun off from the nonprofit Memphis Bioworks Foundation, is one of several efforts meant to create high-paying jobs by building up the region's science-based economy, which is based on orthopedic medical device firms.

Woody and the members of Innova's still-forming board are looking for new companies that meet several criteria.

Innova wants companies that are already in Memphis or are willing to relocate here and are participating in a worldwide market that's worth at least $500 million per year and that fit into one of Memphis' existing industries.

Innova will also be looking for a good business plan: Many scientists place themselves in the firm's top job, but they may not have the skills to move the company forward, he said.

"They think what's going to happen is they're going to have this brilliant idea, and because they're a great researcher, engineer or scientist, they therefore can be a great CEO," he said.

Some companies hire friends and relatives rather than outside people with top-level experience, he said, and others try too hard to win on their own without cooperation from other firms.

Innova plans to invest in two firms in its first year, and Woody is likely to bring in outside talent to fill the chief executive officer or chief operating officer role at each company. And following a model commonly practiced within the venture capital industry, Woody or one of his associates would become a board member of any company Innova invests in.

Woody said he wants to bring the small companies through the first two to three years of their existence before licensing their technology, leading them to form alliances with other businesses or helping them find more capital.

Innova plans to work closely with other local helpers of small companies, including the Emerge Memphis business incubator, the Mid-South Minority Business Council and MB Venture Partners.

Woody, 47, is originally from Hendersonville, N.C., a small town near Asheville. He graduated from North Carolina State University with a pre-med degree before he reached the rank of captain in the Army. When he got out, he became a partner in a small insurance agency, then joined GE Healthcare and criss-crossed the country selling X-ray machines and other devices.

He moved his family to Boston for a job with spinal surgery company DePuy Spine, then came to Memphis for a job as senior vice president for global orthopedic sales for medical device maker Smith & Nephew.

His job changed fundamentally when the firm split its orthopedic division into two parts early last year. Woody stayed just a few months but was reluctant to uproot his wife and three children again. He ran a firm that coached small companies before he took the Innova job.

Woody has practiced karate and other martial arts for several years, and decorates his office with Japanese calligraphy. One spells out the motto "Seven times falling, eight times rising." He said he believes small companies need outside help and the willingness to get up when circumstances knock them down.

"If we can help them with the outside help, and they can help with the perseverance, we've got a key to success right there," he said.

-- Daniel Connolly: 529-5296

Innova Inc.

President: Ken Woody

Address: 20 S. Dudley, Suite 802

Telephone: 448-2440