Author Archives: Angela Hongmannivanh

Capital

Posted on by
Reply

The Angels Among Us

For the most part, the transition from being an employee to being an entrepreneur is a really exciting time. You can implement your vision of how to create and sell a product or service, hire the people you want, and take the company in the direction of your choosing. In theory, that’s all true, however, you also need capital to make all of those things happen. In the very early stages, bootstrapping may be a good option; you could use money from your savings account or ask friends and relatives for an initial investment. So what happens when that money runs out and you’re not ready for venture capital funding? This is often a great time to look for an angel investor to give your company the capital it needs for that in-between stage.

In a nutshell, angel investors are high net-worth individuals who invest their own money in new companies. Angels typically invest between $25,000 and $100,000 and get in at the final, or beta stage, of product development. Angels invest in a company in exchange for equity ownership or convertible debt and because angels have no one to answer to or pay back, their investment terms are often negotiable based on a variety of self-determined factors. Alone, most angels can’t make a living off of their investments, however, angels do form groups, or syndicates, which enable them to invest larger amounts. Because these groups of angels pool their money for larger investments and bigger paybacks, the flexibility of the process is greatly reduced and naturally requires more due diligence.

As they say, angels are everywhere, and we’ve provided a short list of local angel investors along with some information about their companies.

Dingman Center Angels

The Dingman Center Angels is a Maryland-based angel investment group that provides funding to early stage companies located within the Mid-Atlantic region. They are looking for innovative, technology-driven startup companies addressing a significant market opportunity where their investment and expertise can make a difference. They introduce entrepreneurs to potential investors through presentations at monthly meetings which are held from September to June. Their group looks to invest $100,000 to $1,000,000 in seed/early stage companies and will often syndicate with other angel groups and VCs for deals up to $2 million. The Dingman Center Angels is not a fund and does not invest as a group. Their members collaborate on due diligence but make individual investment decisions. If you’re interested in the Dingman Center Angels, visit bit.ly/2l1Hwkl.

Baltimore Angels

Baltimore Angels is an angel investor group founded in 2009. Its mission is to invest profitably in the regional entrepreneurial ecosystem and advance early stage innovators to the next stage of capital formation. They are looking for early stage technology-based companies run by entrepreneurs with a strong vision and who are typically just beyond a friends-and-family round. Investments are made in a variety of industries including business products, computers, consumer goods, education, and several other categories. The Baltimore Angels have invested in, among others, Canvas, Parking Panda, Social Toaster, and ZeroFOX. Meetings are held monthly in Baltimore and they welcome interested investors and entrepreneurs from around the country. You can find more information about the Baltimore Angels at www.baltimoreangels.com./

Hivers and Strivers 

Hivers and Strivers is an angel investment group focusing on early stage investments to support start-up companies founded and run by graduates of the U.S. military academies. Most of their investors have served in the military and are successful senior executives with experience in a broad range of industries and business models. They typically invest $250,000 to $1,000,000 in a single round. When larger financing rounds are needed, they will actively look to syndicate deals with other investment groups in their network. Their goals are to support young veteran entrepreneurs and to facilitate a successful exit for both company founders and investors alike that provides a return of 10x the initial investment. More information about Hivers and Strivers can be found at http://www.hiversandstrivers.com./

Government Relations

Posted on by
Reply

Maryland General Assembly 2017 – The Halfway Point

As the 2017 Maryland General Assembly session reaches the halfway point in its 90-day life, the Maryland Tech Council is engaged on several fronts to impact legislation, which both helps and harms Maryland’s Innovation economy.

Below is a brief summary of the current status of issues where MTC is most heavily involved.

SB 437 – Manufacturer Reporting and Drug Price Transparency – Oppose – Marty Rosendale, Executive Director, BioScience Division and Vice Chairman Brad Stewart both presented testimony against this legislation that would single out Maryland as inhospitable to drug research and manufacturing entities.  The simplistic slogans of the proponents hide a costly and complex reporting requirement that will have no impact on the price of drugs paid by the consumer.  The House version of this bill (HB 631) will be heard on February 23rd and MTC will again present testimony. Meanwhile, MTC will actively participate in a “workgroup” session scheduled for February 27th with the Senate Finance Committee.

SB 226 – Biotechnology Investment Tax Credit – Support – On February 17th, this bill was approved by the Senate Budget and Taxation Committee.  This approval is a key step to this legislation becoming law.  The bill extends the time of eligibility for this tax credit for biotechnology companies at the beginning of their life.

SB 200 – Income Tax Credit for Qualified R &D Expenses – Support – CEO Tami Howie presented testimony in support of this bill in January.  On Feburary17th, the Budget and Taxation Committee approved increasing the cap on the aggregate amount of tax credits for eligible R&D expenses from $9 million to $20 million in each calendar year.  This increase is phased in over three years.  Currently, the amounts requested for this tax credit in eligible applications far exceeds the cap.

HB 161 – Maryland Economic Development Assistance Fund – Support – MTC testified at the hearing on this important bill and continues to contact members of the Legislature to explain the organization’s support.  This bill changes and updates Maryland’s largest public lending fund to allow for loans for working capital.  This is significant for tech companies whose greatest asset is human capital, not buildings or specialized machinery.

SB400 – BioSafety Level 3 Labs- Registration – Oppose – MTC submitted testimony arguing that this new State registration requirement may duplicate Federal requirements and that the language of the bill would create confusion within the new regulatory agency – the State Department of Health and Mental Hygiene.  At the conclusion of testimony, the Chairman of the Committee stated that he was holding the bill to see if that Department could create a voluntary notification for labs.

As always, if you have any questions about these issues or others you have heard about you are welcome to contact either Joy Weber, Esq. (jweber@rwl.com) or Pat Roddy, Esq. ( proddy@rwl.com) for more information.

Member Spotlight

Posted on by
1

MC_horiz_RGB

Montgomery College

Much of Maryland’s workforce pipeline starts at local two- and four-year colleges and with the help of federal grants, students at Montgomery College will be able to get a solid head start on their IT careers. Alton Henley, Senior Program Director at Montgomery College, met with the Maryland Tech Council (MTC) to explain the new program they are developing with funds from the America’s Promise Grant—an outgrowth of the TAACCCT grant.

MTC is a partner with employers, community organizations, and community colleges across the state, including Montgomery College, in Cyber-Technology Pathways Across Maryland (CPAM). CPAM intends, over the next four years of the grant and beyond, to build a pipeline of skilled cyber security workers who will attain certifications, associate’s and bachelor’s degrees, work-based learning opportunities, and, ultimately, good jobs in technology and cyber security.  

Give us an overview of the America’s Promise grant.

America’s Promise grants are awarded by the U.S. Department of Labor to 23 regional workforce partnerships in 28 states. These grants are designed to develop and expand workforce partnerships to provide a pipeline of skilled workers in industries such as information technology, healthcare, advanced manufacturing, financial services, and educational services.

The state of Maryland received $5.63 million to be used over four years and this money is divided among Montgomery College, Frederick Community College, and Prince George’s Community College. The three schools combined have promised to serve 1,070 students, and Montgomery College will be educating 700 of those students.

It sounds like the America’s Promise grant is similar to the TAACCCT grant.

The America’s Promise grant is an outgrowth of the TAACCCT grant. Money from the TAACCCT grant is used to prepare students for employment in high-wage, high-skill occupations by using innovative strategies and methods for delivering instruction. The program that Montgomery College built from TAACCT funds is focused primarily on cybersecurity, and it is called CyberAdvantage. It is a formal, two-semester program that focuses on desktop, network, and application security. The goal is to help students understand the fundamentals of cybersecurity with the goal of preparing to obtain two baseline industry certifications. We also help them write resumes, and we conduct mock interviews and guide them to career opportunities.

Tell us about the program being developed at Montgomery College specifically under the America’s Promise grant. 

The money from the America’s Promise grant will be used for a new program that is designed to help students top off, if you will, their programming skills. Whereas the CyberAdvantage program introduces students to a field within IT, this new program will help students get additional training in skills that they have already learned. For example, some students may have training in theory, but they don’t have the tools. We offer the technical tools, like training on how to write a complete application in Java. It’s this type of hands-on experience that companies are looking for. Our program is akin to a bootcamp that will help students finish their journey in a way that directly prepares them for the work world. We’re trying to stem the tide of having students enroll in one of the expensive bootcamps that charge up to $16,000 for three months of training.

The program will be built upon the knowledge and experience that we have in this area. Infosys is one of our partners, and we have conducted this type of training before. Also, I’ve been a developer for 39 years having first learned in a programming class that my mother, a former employee at the National Bureau of Standards (now NIST), taught when I was 9 years old. Suffice it to say that we know what works.

What do prospective students need to know about the program?

First, students must have, or be within one semester of obtaining a four-year degree and they must also participate in pre-work, which is an online class that sets a baseline for capability. From those students, we will choose who we think will be successful and benefit most from the program.

This is an in-person program, and the first class will start on May 22. Students will be in the classroom for eight hours a day for eight weeks at the Gaithersburg Business Training Center. It will be like working on the job, and in the end, it almost equates to having a minor in Java. Students will learn how to write, fix, change, and complete their work and they will be given constructive feedback. The program addresses the Oracle certification in Java which is a stackable entry-level certification. We like to say that this program is purposeful practice through self-direction.

How can readers get more information on this program or other IT programs at Montgomery College?

They can contact me at alton.henley@montgomerycollege.edu or at 240.567.3826.

Government Relations

Posted on by
Reply

Technology Highlights of Governor Hogan’s
Proposed Budget

The Maryland General Assembly will begin its deliberation of Governor Hogan’s FY 2018 this month. Governor Hogan has proposed several items that have significance to Maryland’s technology community in particular, as well as to the business community in general. Most significant to all private sector entities, the Governor is proposing no new or increased taxes or fees for the coming year. Other highlights include:

  • An increase of $10.2 million to the State’s primary economic development loan fund (Maryland Economic Development Assistance Authority and Fund, commonly referred to as MEDAAF);
  • An allocation of $20 million to retain Marriott International’s new worldwide headquarters in Maryland;
  • An initial $5 million on the commitment of $20 million to assist Northrop Grumman;
  • $12 million for the Biotechnology Investment Incentive Tax Credit;
  • $2 million for the Cybersecurity Investment Incentive Tax Credit;
  • $4.8 million for the Maryland Innovation Initiative to promote commercialization of research from Maryland universities
  • $900,000 for the Cyber Security Investment Fund

There is some controversy within the General Assembly about the Governor’s budget priorities. This means that the initiatives outlined above are by no means secure from reduction or even elimination. The Tech Council of Maryland will be directly involved with legislators in the coming months to make sure they maintain these critical programs.

Mentoring Services

Posted on by
Reply

 

tcmvms-graphic-72dpi

Grow your Future with our Venture Mentoring Services Program

As we wind up 2016, our pilot year, we are pleased to report success.  From 0 to 14 mentee companies and 50 trained mentors TCM VMS achieved its goals for the pilot.  Mentee companies are actively engaged with their mentor teams and reports from the mentees indicate a uniform sense of progress. We continually receive thank yous and praise for the program. And, we have a first capital raise of $500,000.  Our goal is to reach 30 mentee companies in service in 2017.

With the expanding interest and participation, as well as our improving operational efficiencies, we have capacity to continue expanding.  We are seeking mentee company candidates that meet the parameters for the program. Mentees come by referral.  If you can identify a candidate company, please do so by contacting Pam Lubel, VMS Program Manager at MTC (Plubel@techcouncilmd.com). 

Prospective mentees generally should have:

  1. A “tie” to Maryland;
  2. A tech or biotech product or service with proof of concept established in someway;
  3. At least one full time employee (presumably, the CEO);
  4. A direction towards obtaining “series A investments”

We are looking for companies beyond the earliest stages, but still young in the development cycle and in need of practical assistance with growth and scaling issues.

For more information or to apply, contact Pam Lubel: plubel@techcouncilmd.com or apply online at http://www.techcouncilmd.com/tcm/pdf/application.pdf

Cost Savings Program

Posted on by
Reply

MTC wants to remind you that your membership gives you the leverage of our entire industry’s financial clout to deliver to your company – as a FREE benefit – exclusive deep savings and premier services from leading suppliers! At no cost to you, sign up here for any of the programs and get a $25.00 gift card. 

Each supplier knows the unique risks and challenges of our high-stakes industry. Each has been selected to give your company savings and services usually reserved for only the very largest enterprises.

MTC and VWR are committed to supporting your research efforts by helping you maximize your purchasing power and streamlining your supply chain.

MTC and VWR have recently enhanced our highly competitive science-specific membership program, giving you access to contracted pricing from the leading distributor in life science research.

The Advantages of Enrolling – Gain the edge you need in the highly competitive life science arena. Put these powerful advantages to work in your business now: 

Stretch your lab budget with…

  • Customized pricing for over 8,600 items, with some of the industry’s best pricing and savings of up to 75% off list
  • Flexibility — high-volume items may be added to your VWR hot list to match your company’s local pricing
  • Industry leading pricing on most branded equipment and instruments
  • VWRCATALYST service discounts – 5% off new service engagements
  • Annual fee waived for laboratory supplies inventory management powered by VSR+ technology
  • Rebates direct to the member for e-commerce purchases and growth in annual spend

Move your research forward with…

  • NEXT-DAY DELIVERY to most locations nationally via VWR’s Regional Distribution Center network
  • NO MINIMUM ORDER required
  • FREE STANDARD GROUND SHIPPING from VWR’s vast distribution network to your facility from VWR’s primary warehouse
  • Detailed quarterly usage and PERFORMANCE REPORTING PACKAGE
  • VWR PAYS SURCHARGES for fuel and hazardous materials
  • REDISHIP FURNITURE shipped within 48 hours of ordering
  • ADDITIONAL AFTER HOURS CUSTOMER SERVICE support exclusively for VWR-MTC program members

Enrollment is quick and easy. For specifics on VWR and all of your member cost savings benefits, click here, sign up and get a $25.00 gift card. 

Capital

Posted on by
1

Crowdfunding Grows Up

Ways to raise early stage capital has finally caught up to the innovation demonstrated by the companies that are trying to raise the money. In case you missed it, equity crowdfunding got the thumbs up from the SEC in the middle of last year. So if you’re looking for ways to bring in more investment dollars in the new year, equity fundraising may be the path for you.

Most of you have probably heard of the JOBS Act (Jumpstart Our Business Startups Act) that was signed into law by former President Barack Obama in 2012. The goal of the legislation was to help small businesses access capital quicker and easier. Part of that legislation was Title 3 that provides an exemption from registration certain crowdfunding transactions. In 2015, the new rules stated that eligible companies will be allowed to raise capital using Regulation Crowdfunding starting on May 16, 2015. In an interview with Entrepreneur, Ellen Grady, an attorney and corporate governance specialist at the law firm Cozen O’Connor said, “For the first time, anyone can become an investor in a business and be able to share in its profits and growth regardless of income, net worth, or level of financial sophistication, and this will open up a new source of potential financing for entrepreneurs, which could be a game changer.”

In general, equity crowdfunding works much like rewards-based crowdfunding where you choose a crowdfunding portal, create an online profile, and submit a funding campaign for approval. Rather than giving investors a preview sample of a new product in return for their investment, however, you are required to give people stock or pay them a percentage of sales for a certain amount of time. The process of raising funds this way means that you will have to find an equity crowdfunding site to facilitate these types of transactions. Some sites charge a subscription fee while others get a percentage of the total amount raised. As part of setting up a profile page, companies have to show how they plan to use the money along with other information like the minimum amount of investment that it will accept and the offering terms. Investment funds sit in escrow until the investment closes, and each investor pays a processing fee. After the investment period has closed, the company is required to routinely share information with their investors about how the business is doing. Popular equity crowdfunding sites include: bolstr, CircleUp, crowdfunder, EarlyShares, EquityNet, Fundable, localstake, onevest, and seedinvest.

If your company isn’t getting attention from VCs or angel investors, equity crowdfunding can be a quick way to raise funds provided that you have a viable product that people believe in and that you promote it effectively and to a wide audience. At the same time, the sheer speed and number of random investors, many of whom are inexperienced and looking to make their money back in multiples, can be a bit overwhelming. Though this type of fundraising is relatively new, the SEC has set up a framework and laid the ground rules, some of which are listed below, for investing which startups should understand.

  • A company issuing securities in reliance on Regulation Crowdfunding (an “issuer”) is permitted to raise a maximum aggregate amount of $1 million in a 12-month period.
  • Individual investors are limited in the amounts they are allowed to invest in all Regulation Crowdfunding offerings over the course of a 12-month period.
  • Individual investors are limited in the amounts they are allowed to invest in all Regulation Crowdfunding offerings over the course of a 12-month period.
  • Certain companies are not eligible to use the Regulation Crowdfunding exemption including, among others, non-U.S. companies and companies currently Exchange Act reporting companies.

Analysts predict that equity crowdfunding will pour billions of dollars into early-stage startups which is good news for both the companies and the people who invest in them. Early-stage investors will be able to have control over the companies that they invest with, which means they can buy a stake in products and services that have meaning to them. This may make it easier for startups to successfully promote their vision to investors on a more personal level. 

Sources:
Entrepreneur – bit.ly/2jJJUtW
Securities and Exchange Commission – bit.ly/2jier3o

Workforce Development

Posted on by
Reply

How TechHire is Helping IT Employees and Employers

In March 2015, President Obama launched the TechHire initiative based on the idea of building a pipeline of tech talent to bring new jobs to local economies, facilitate business growth, and give local residents a pathway into the middle class. To build this pipeline, TechHire was established as a nationwide, community-based movement that helps underrepresented and overlooked job seekers start technology careers. Within this framework, TechHire addresses employers’ need for technology talent with emerging models for quickly training people with limited ingoing technology skills to be job-ready in months, not years. The initiative is powered by Opportunity@Work in partnership with the U.S. Department of Education.

Today, there are nearly 600,000 open IT jobs across all sectors—more than two-thirds of which are in fields outside the tech sector, such as manufacturing, financial services, and healthcare. These jobs pay one and a half times more than the average private-sector job, and training takes less than a year with emerging programs like “coding bootcamps,” free open data trainings, and online courses like the Department of Commerce’s Data Usability Project and massive open online courses (MOOCs) by the Federal government, academic institutions, non-profit organizations, and the private sector. Since its launch, TechHire communities across the country have piloted fast-track training programs designed to give people skills that are in high demand by employers. So far, over 4,000 people have been trained and connected to work opportunities with local employers, earning average salaries of well over median income.

The TechHire initiative began with 21 communities, and today it has grown to over 70 communities working with 1,500 employers on three key actions:

  • Opening recruiting and hiring pathways for people without traditional credentials who can demonstrate that they have the skills to succeed in a tech job regardless of where those skills were attained.
  • Recruiting, incubating, and expanding accelerated tech learning programs—such as high quality coding bootcamps and innovative online training—which enable interested, unexperienced students to rapidly gain tech skills.
  • Connecting people to jobs by investing in and working with organizations that can vouch for those who have the skills to do the job but who may lack the typical profile of education and experience.

Just last month two counties in Maryland joined the TechHire initiative including Carroll and Howard Counties. According to a White House press release:

Carroll County employers, training providers, and community organizations are uniting to train and employ more than 200 local tech workers by 2020. Led by Carroll Community College, the Carroll Technology Council, and the Mid-Atlantic Gigabit Innovation Collaboratory, Inc. (MAGIC), a broad group of partnering organizations will connect local participants in leading-edge tech training programs to a network of over 520 county employers.

Howard Community College and the Howard Tech Council will come together to train individuals for jobs in tech fields including computer science, information technology, cybersecurity, and computer forensics. Howard County’s TechHire initiative will leverage an apprenticeship model, whereby trainees can participate in on-the-job learning with the over 200 regional employers that participate in Howard Tech Council. By 2020, the Howard County TechHire initiative aims to train and place 800 individuals, with an emphasis on the long-term unemployed, minorities, and the military.

If you would like to learn more about the initiative and how you can find qualified talent in your area, visit www.techhire.org.

Sources:

https://www.whitehouse.gov/the-press-office/2016/03/09/fact-sheet-white-house-announces-doubling-techhire-communities-and-new

https://www.whitehouse.gov/the-press-office/2015/03/09/fact-sheet-president-obama-launches-new-techhire-initiative

Member Spotlight

Posted on by
Reply

ComNet Communications

Maryland Tech Council (MTC) members work on all sides of technology, and this month we talked with Carl Lechner, Business Development Manager for ComNet Communications. ComNet has been a member of MTC for two years, and Carl serves as a lead member of the MTC Ambassador Committee.

Give us an overview of ComNet Communications.
We are a national contractor that focuses on the turnkey installation and integration of wired and wireless IT, Communications, Audio Visual and Security systems. When a company moves or expands, they will need to add phone and network capabilities, so we do the physical installation and integration of the various systems. We have an excellent reputation for working on complex projects with companies of all sizes.

ComNet is privately owned and has been in business for 32 years. Our Corporate headquarters is in Bethel, CT, not too far outside of New York City. Our Mid-Atlantic office is based in Frederick, MD and we have about 450 full time employees companywide. We also have offices in Dallas and Jacksonville, with teams of technicians in several other areas around the country.

What types of industries do you work with?

Our client base is very diverse. Some examples are new or renovated office buildings, schools, hospitals, retail, data centers, sports facilities, and life sciences companies. We’re comfortable in almost any space, both locally and nationally. Last year we performed a large project for Daytona Speedway, and we upgraded signage and other technologies for 750 McDonald’s locations. We’ve done work with MTC member, CRB. We installed their IT and communications wired and wireless systems. We work with the end-users directly and also through general contractors and systems integrators.

ComNet works with federal government agencies as well, correct?
We do. Typically, we work as a subcontractor partner to systems integrators that are more involved in the network gear (servers, etc.). We are the install component of the contract, or the feet on the ground if you will, and we serve in this capacity for large contractors.

What is ComNet’s differentiator in this market?
We have a trained staff of technicians ready to deploy across the country. In the remote areas where we don’t have permanent staff, we have vetted contractor partners that we use. This is a big advantage for us, and we want clients to call on us regardless of where their project is located. We have the ability to offer consistency in our installations across all geographies in the U.S.

Another differentiator is that we are vendor agnostic, and we can work that way because ComNet invests a lot of resources in training the technicians and engineers on a wide variety of products. Our IT staff has numerous certifications, which enables us to offer solutions that are right for the job. We have 16 engineers that are BISCI certified.

What is the best thing about your work?
We work with companies that are typically growing and expanding. Our goal is to build long-term relationships with companies and to help them to prosper and grow by being a trusted resource for the installation of their mission-critical wired and wireless technologies.

Are you seeing any trends in your industry?
There is a trend in downsizing office space because, for one reason, more people are telecommuting. Companies are also trending toward more open office spaces and fewer closed or walled offices. Collaboration spaces are also becoming very important in commercial buildings.

Wireless is also a big factor in technology implementations. Also, bandwidth and speed are increasing exponentially and thus fiber optics are becoming more in demand. Of course security and audio-visual systems are becoming more important and complex, so ComNet has invested heavily in developing these teams and service offerings as well. This isn’t just running wires and plugging them in, you need highly technical, experienced people to design, install, and integrate these systems.

Where can people get in touch with you?
They can email me at clechner@comnetcomm.com or call me at 202.748.1823.

Mentoring Services

Posted on by
Reply

Venture Mentoring Services

Grow your Future with the Tech Council of Maryland Venture Mentoring Services Program (TCM VMS) 

The pathway to becoming an entrepreneur is often challenging. Through hands-on mentoring, TCM VMS’s mentee companies learn how to perfect their products and services, identify markets, build business organization and seek funding.

The ultimate goal of the TCM VMS program is to bring employment opportunities and capital to the area in the technology and life sciences fields by helping companies to grow faster.

The TCM VMS program is based on a team mentoring approach modeled after the highly-successful MIT Venture Mentoring Service, which has been implemented in more than 60 communities around the globe. 50 Mentors have gone through the TCM VMS training and are currently serving 14 Maryland-based startup companies.

The TCM VMS program is looking for startup companies in the technology and life sciences fields, led by an individual or individuals who work full-time on the business that are preparing to raise their first venture capital or institutional round of financing.

Potential Startup Companies whose applications are accepted will have the opportunity to present to potential mentors at a monthly meeting, after which the TCM VMS will facilitate matches with interested mentors. The TCM VMS will provide guidelines to support the startup of the relationship and assist in the ongoing management of the team mentoring meetings.

There is no fee to the startup company for the mentoring program.

Contact: The Tech Council of Maryland Venture Mentor Services is a program of the Tech Council of Maryland. For more information or to apply, contact Pam Lubel: plubel@techcouncilmd.com or apply online at http://www.techcouncilmd.com/tcm/pdf/application.pdf