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Friday December 15, 2017

NY Convergence ORIGINAL

NY Startups Cross River to Take Honors at NJTC Venture Conference

By Esther Surden

Real business took place at the booths and tables on the crowded floor at the 2012 NJTC Venture Conference, in Somerset, NJ in late March, where tech and life sciences companies vied for the attention of the many VCs and angels who came to the event.

More than 40 companies pitched, displayed information and demos in booths, and had a chance to see and be seen by a wide swath of the NY, NJ and PA investment community. They also had the chance to connect with the lawyers and accountants who can be so crucial in introducing young companies to their potential funding sources.

This year more IT companies attended than last, Maxine Ballen, New Jersey Technology Council (NJTC) CEO said, followed closely by companies in the life sciences. A smattering of companies from clean energy and electronics were also represented.

Young NJ tech companies dominated the winner’s circles, but some companies from NY and Pennsylvania also made the cut. The NY winners were:

  • NAC Harmonic Drive of Port Jervis captured the Most Innovative Product/Service Company category with its proprietary harmonic drive technology which could be disruptive in the wind turbine and aeronautics industries.
  • Locus Energy, a NY-based monitoring, data services and analytics company came home with Best Green Company.
  • FSAstore.com (NY), a website that caters to the needs of people who use flexible spending accounts, was the VC’s Choice.
  • Another NY website, FamilyPet, was voted most likely to have an IPO.

Other notable NY-based startups pitching included IQ4, which has developed an internet virtual internship and placement program as an outgrowth of some other work the company has been doing and Mobcaster, which is a crowdfunded television channel looking to disrupt the TV model.

We spoke to several of the NYers who made it to the Somerset location of the conference and they were happy with their choice to cross the river and come to a New Jersey event, saying that they thought they stood out and made many of serious contacts.

The event also featured a luncheon panel discussing Corporate Venture Investing. Moderated by Raymond Thek, vice president of the Tech Group at law firm Lowenstein Sandler, the panel addressed the thorny topic of whether vendors and follow-on investors are well served by investment fund arms of such companies as AOL, Google, Conde Nast, SAP, Time Warner and Home Depot.

While that question was not definitively answered, Thek, who operates out of NY and Roseland NJ, said that in the last 15 months he has been on the other side of many deals with such companies. “I’ve never seen anything like it 20 years.” This trend used to be only on the life sciences side, he said. Each of these funds is about 50 or 60 million dollars, he said.

Panelist Gil Beyda, the founder and managing partner of Phila.–based Genacast Ventures operates one of those funds, since his seed stage-fund is an offshoot of Comcast, however he said that it’s not technically a “strategic fund,” since companies that it invests in don’t necessarily have to have anything to do with Comcast.

His view is that more and more firms are looking at corporate venture investing as an integrated part of their strategy. Some of them look at this as a road to acquisition, but others look at this as primarily a financial management tool allowing them to diversify their financial stream.

Peg Jackson, managing director of NY-based boutique investment firm Gridley & Co., said that big companies  are getting into venture funding because technology is having such a big impact on their businesses. They are using their  investment arms as a way to have a formalized a team and structure to know what’s coming down the road in technology.

Sasank Aleti, VP of LLR Partners, a Phila.-based private equity fund, agreed that large companies are investing in small slices of disruptive technologies in order to get on top of the curve, before their business can be disrupted. Getting technology to market is much quicker now, so they can see the impact of that technology much sooner, he said.