Capital

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How the State of Maryland Can Help
You Finance Your Business

If you’re looking for money to grow your business, the state of Maryland is a good place to start. The Maryland Department of Commerce Office of Finance Programs provides the business community nuancing and incentive-based solutions for economic development projects to maximize job creation and retention, leverage capital investment, and encourage growth in targeted business sectors and specific geographic areas throughout the state. The state offers financial support in the form of direct loans, grants, and investments to a variety of businesses.

Economic Development Opportunities Fund (Sunny Day)
The Sunny Day fund supports extraordinary economic development opportunities that create and retain employment as well as create significant capital investments.

Maryland Economic Adjustment Fund (MEAF)
The Maryland Economic Adjustment Fund assists business entities in the state with modernization of manufacturing operations, development of commercial applications for technology, and exploring and entering new markets.

Military Personnel and Veteran-Owned Small Business Loan Program
The state provides no-interest loans for businesses owned by military reservists, veterans, National Guard personnel and for small businesses that employ or are owned by such persons.

Small, Minority and Women-Owned Business Account – Video Lottery Terminal Fund (VLT)
The VLT Fund provides 1.5% of the proceeds from video lottery terminals (slots) that is distributed in targeted areas surrounding select Maryland casinos. At least 50% of the VLT allocations are deployed to small, minority, and women-owned businesses located within certain targeted areas of the six casinos. The other 50% is available to small, minority, and women-owned businesses located throughout Maryland.

Maryland Small Business Development Fund Authority (MSBDFA)
The MSBDFA provides financing for small businesses that are not able to qualify for financing from private lending institutions or owned by socially and economically disadvantaged persons.

State Small Business Credit Initiative (SSBCI)
A component of the federal Small Business Jobs Act of 2010, the State Small Business Credit Initiative provides direct funding for state credit enhancement programs. These funds must target an average borrower size of 500 employees or less and loans averaging $5 million.

ADVANCE Maryland
ADVANCE Maryland, in partnership with the National Center for Economic Gardening, is a program for second-stage entrepreneurs that uses a “grow from within” strategy targeting existing growth companies and offering them critical strategic information customized to their needs. This information can be key to propelling your company to its next phase of growth.

Maryland E-Nnovation Initiative Fund (MEIF)
The E-Novation Initiative Fund offers a state match to private funds raised in support of endowed chairs at Maryland’s nonprofit institutions of higher education. Under the fund, $8.5 million will be appropriated by the Governor annually from fiscal 2016 through 2021.

Maryland Economic Development Assistance Authority Fund (MEDAAF)
The MEDAAF fund is a flexible, broad-based program providing below market, fixed rate direct assistance to growth industry sector businesses, locating or expanding in priority funding areas of the state. Funding for special purpose programs include Arts & Entertainment, Brownfields, Child Care Centers and Seafood and Aquaculture.

If you are an entrepreneur looking to develop, transfer, or accelerate a technology-based product, the state has collaborators and partners that provide funding options. For more information on all of the state’s business funding opportunities, visit http://bit.ly/2eJxIXi.

Source: Maryland Department of Commerce – http://bit.ly/2eVsoz5

Government Relations

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COMING TO A STATE NEAR YOU?
STATE REGULATIONS REQUIRING MINIMUM CYBER SECUIRTY MEASURES

On September 13th, 2016 Governor Andrew Cuomo announced that the State of New York, using its power to regulate state chartered banks and all insurance companies doing business in the State, would begin requiring those entities to have minimum cyber security standards in place. The minimum standards include:

  • The establishment of a cyber security program
  • The adoption of a cyber security policy
  • A formal, required role for a chief information security officer
  • Oversight of third-party service providers
  • Additional items that relate to security practices and other matters

Although some of the proposed regulations closely align with current government and voluntary certification programs like the National Institute of Standards and Technology (NIST) Cyber Security Framework, International Standards Organization 27000 (ISO), Payment Card Industry (PCI) Security Standards and private/public partnerships like North American Electric Reliability Corporation (NERC) Critical Infrastructure Protection Standards, others do not.

For many regulatory areas, like insurance, utilities, health care and professional licensing there is no overarching Federal framework. Thus, states have the ability to impose their own standards on those entities that are operating within that state. This regulatory reach even extends to the new “sharing” economy businesses of ride sharing, space sharing and fantasy sports competition.

For some technology companies this new regulatory frontier will be a boon driving businesses to them in a scramble to get compliant with emerging state regulation. For others, overlapping regulations and competing contract compliance requirements will greatly increase risks associated with gathering, storing and managing data.

The Tech Council of Maryland will be monitoring all the legislation introduced in the 2107 Maryland General Assembly Session to see if any Maryland specific cyber security regulations are proposed. Please check the TCM website frequently from January to May to keep updated on developments in Annapolis as they occur.

November Member Spotlight

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kitchology

Kitchology
The Tech Council of Maryland visited Kitchology and talked to co-founders Dr. Alain Briançon and Iris Sherman about the company and life as a startup.

Tell us about Kitchology
Millions of people suffer from food allergies and sensitivities and because of that, they may feel like their meal options are limited and that their freedom to choose has been greatly reduced. We set out to change that. We started Kitchology in 2013 building an integrated cooking platform that utilizes machine learning and leverages a deep knowledge base to help users plan their meals with ingredients that they probably have on hand. We now provide targeted and personalized ingredient substitutions during recipe selection and help with purchasing through personalized shopping lists. We even take users step-by-step through the entire preparation and cooking process. We wanted to design something that would go beyond the pain point of food allergies and get valuable feedback from people preparing those meals.

How did the idea of Kitchology come to be?
The idea, naturally, was born in a kitchen. Like most parents [Iris explains], I struggled to find meals that everyone liked, but I also had to take into consideration that one of my sons has a serious food allergy. I not only had to find meals that everyone liked, but I also needed meals that everyone could safely eat. I started to wonder if there was a system that could help people make their own substitutions in their own recipes and if there was a way to modify nearly any recipe to make it safe to eat for almost anyone. Alain was on a mission to help solve the food waste problem, and we knew that we could combine our interests and implement a system that addressed both issues. We’re self-proclaimed serial entrepreneurs and we’ve worked for startups before, so the whole process wasn’t completely new to us.

How does the technology work?
We’ve built a patent pending cooking platform for people dealing with food allergies and special diets. At its core, Kitchology is a profiling engine that analyzes consumer activities and a substitution engine that makes product substitutions and recommendations when consumers plan meals and shop. We put the cooks in the center of our design. If they decide better, they eat better (along with the people they cook for). This requires a lot of work including developing a database with over 480,000 substitution rules and 80,000 culinary rules. Profiling is performed using explicit inputs, inference analysis, and collaborative filtering. Together, this allows for advanced matching of ingredients pertaining to the users’ preferences, enabling planning, cooking, and sharing. We have filed six patent applications on key elements, and we are rolling out this functionality in phases to ensure we are doing it right. We look at this platform as a cook-centric model platform that captures analytics that no one else captures. That could be quite disruptive to many.

Kitchology has garnered quite a few accolades over the past few years. Tell us about some of those.
Just this year we were named a finalist in the Tech.co and Consumer Technology Association Startup of the Year competition, Iris was named as one of the Upstart 100 Inventors, we were two of the Tech.co top Startup Founders over 40, we won the 2016 USA Creative Business Cup, and also a $100,000 deal at the Baltimore Piranha Tank Event. We were also a winner of the 16th Annual Maryland Incubator Company of the Year Awards, and we were voted as a Startup Maryland Fan Favorite two years in a row in 2014 and 2015.

What’s ahead for Kitchology?
We want to bring the technology forward so we can acquire more users and get more retail partners. The trick for us is to manage business and figure out what delivers the most value and then go for that. Our approach is to put in place a system to show partners what the world needs. Technology is not about the good ideas. It’s about coming up with good questions to get to that good idea.

How long have you been a member of the Tech Council and what have you gotten involved in?
We joined the Tech Council almost a year ago. Pam Lubel got us involved in the Venture Mentoring Program and it has been very impactful for us. We just can’t say enough about our mentors. They are incredible.

Where can people sign up to use Kitchology or learn more about the company?They can go to www.kitchology.com where they can use the service for free. They can also contact Alain at alain.briancon@kitchology.com or at 301.728.5512 or Iris at iris.sherman@kitchology.com or at 301.366.1901.

TCM Featured Highlight

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The Return of TCM Vibe
Welcome to the new TCM Vibe! The Vibe is the voice of TCM and its members. We keep our eye on innovation and each month we’ll update you on member activities, events, industry partnerships, legislative activities, and so much more. We encourage you to send ideas about information that you would like to see. For now, enjoy this issue!

Government Relations

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Maryland General Assembly to Debate Price Regulation of Drugs
One of the major issues that will debated in the 2017 Maryland General Assembly Session will be a proposal regulating a number of aspects of pharmaceutical pricing. Proponents of the legislation, including major health care insurers, have said the legislation will include:

  • Requiring “major” drug manufacturers to disclose the basis for prices of prescription drugs.
  • Requiring “major” drug manufacturers to provide prior notice of increases on wholesale drug prices on any brand or specialty drug when the increase is 10 percent or more.
  • Authorizing the Maryland Office of the Attorney General to take legal action to prevent price gouging by “major” drug corporations.

Earlier this year, Vermont passed legislation requiring pharmaceutical companies to justify price hikes on medicine.

If past this legislation would make Maryland the first state to authorize its Attorney General to investigate alleged price gouging and take pharmaceutical companies to court.

Mentoring Services

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The Tech Council of Maryland (TCM), in partnership with the Montgomery County Economic Development Corporation started a mentoring program in 2015 to help the technology and life sciences community, called the Tech Council of Maryland Venture Mentoring Service (TCM VMS). The program is based on a team mentoring approach modeled after the highly-successful MIT Venture Mentoring Service and provides active and specially tailored mentoring services in teams catering to the specific needs of each accepted company.

The companies must have a nexus to Maryland tech and life sciences sectors and a demonstrated proof of concept for their respective product or service. TCM VMS is particularly interested in serving companies that are preparing for their first venture or institutional financing, as there is a perceived gap in resources for companies at this development stage.

The TCM VMS program engages highly qualified volunteer mentors with experience relevant to early stage companies and who are committed to providing advice in a team mentoring setting. Mentors receive special training on the MIT team mentoring model in addition to careful vetting of their expertise.

Mentor teams and Mentee Company CEO’s, once paired, meet regularly at the request of the CEO to assess issues and to assist in developing growth oriented solutions for the company. Team Mentors also meet monthly to share their mentoring experiences and to take advantage of the expanded networks and expertise which the larger cadre of mentors represents. These monthly meetings also have the advantage of giving the mentors access to new contacts.

The MIT model has been adopted in over 60 communities worldwide because the results are stunning. Companies thrive…grow faster, attract more funding, earn more revenue and create more jobs with this program, which is becoming a foundational component of this area’s ecosystem.

Current Status: The TCM VMS is preparing for its fifth training program for volunteer mentors in October, 2016, bringing the total number of trained volunteers to over 40. In this pilot year of operation, the program is already serving 10 Maryland-based companies with teams of mentors.

Contact: The Tech Council of Maryland Venture Mentor Services is a program of the Tech Council of Maryland. For more information on the TCM VMS program, see http://www.techcouncilmd.com/careers/mentor-opportunities.php.

Workforce Development

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A Local Startup Wants to Help You
Find Skilled Workers

Helping people get jobs by using their skill set seems like a simple idea. Employer needs someone to say, build a website in Drupal, and the job seeker shows that they have those skills. Simple, right? You would think, but that’s not always how companies go about hiring staff. Instead, employers end up poring through hundreds of resumes trying to read between the lines only to end up getting a handful of people who are only partially qualified. Enter SkillSmart. The Germantown, Maryland for-purpose startup is helping to close the skills gap by helping job seekers, employers, and educational institutions.

Mike Knapp and Jason Green founded SkillSmart with the power of their own skills. Knapp has over 20 years of experience in technology, public policy, and local government—serving two terms on the County Council of Montgomery County. Green has experience on a national level, working in federal government and most recently serving as Associate Counsel to President Obama. Knapp and Green have created a skills-focused, closed-loop platform, if you will, that integrates information from job seekers, employers, and educational institutions:

Employers: For employers, the company helps in identifying and recruiting talent through its three subscription models that are based on monthly hiring needs and start at $400 per month. If a company wants a customized solution, SkillSmart offers consulting services in skills-demand development, education development, training assessment, and corporate development.

Job Seekers: Individuals who are looking for jobs can set up a profile and input their skills and experience. Information in the profile is aggregated and given a score which is used to show employers who will make the best match. If a job seeker applies for a job, but isn’t matched, they are given feedback on why they weren’t contacted be it a lack of skills match or that the profile just wasn’t viewed. If say 10 skills were needed, but the applicant has only 5, they would know which skills they are, and SkillSmart will link them to where they can get those additional skills.

Educational Institutions: SkillSmart partners with educational institutions to help create a more skilled and qualified workforce. By learning what skills local employers need, classes can be designed around those skills and promoted to job seekers. Schools can join the SkillSmart Educator Network which is a training grid filled with courses teaching the right skills for employers. The company works with educators to highlight training opportunities for job seekers to improve or learn new skills. With this, job seekers become more qualified and schools benefit from additional enrollment. SkillSmart currently works with Prince George’s Community College and Northern Virginia Community College.

SkillSmart is connecting the dots and approaching workforce development in a proactive and holistic manner. By integrating the needs of job seekers, employers, and educational institutions it’s likely that the result will be an in-demand highly trained workforce. The best part is that all three entities will be supporting a skills-based company that was homegrown in Montgomery County.

Capital

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A Quick Guide to Venture Capital Firms

Much is written about venture capital (VC) firms, as news of the companies they fund populates the tech pages weekly. Venture capital firms play a significant role in funding the life science and technology ecosystems around the country and in turn, they boost our innovation economy. So we hear about them and talk about them, but do we really understand how they work? Whether you are in the early stages of a startup or are a little further down the road, it’s good to know how VC firms operate and what that means for your company.

A venture capital firm invests in private companies in exchange for partial ownership. It’s not necessarily a direct quid pro quo in that, in order to increase the chances that your company will be profitable, the firm may bring in managerial/technical expertise, put one of their employees on the board, and/or want a say in how the company is run. Like the companies they invest in, VC firms also have to raise money and they do so through demonstrating their experience and proving their value to, among others, wealthy individuals, foundations, and endowments. These investors fully expect to be paid back, in multiples, in about 5-10 years. Now, just because a firm invests in your company, doesn’t mean it will meet certain success. Estimates have it that only one out of every ten companies that VC firms invest in will be successful. That’s not to say that the companies go out of business, but they simply don’t perform to the expected return.

When you are looking for venture capital, keep in mind that, as Micah Rosenbloom of Founders Collective said in a TechRepublic interview, “As a venture capital firm, we are not in the business of funding inventors or inventions, we are in the business of funding fast-growing companies.” This means that the firm that gives you money is going to be your partner in business. They will be your closest ally and biggest supporter, but they fully expect that you are going to reward them for their investment. You can’t fire your investors, which is why it’s important to research firms and get to know the employees and their culture. Networking with other companies that have worked with VC firms is a good way to find out who might be a good fit. As with any company, VC firms each need to differentiate themselves and they do so in a number of ways like investing in certain regions of the country or in focused sectors like healthcare or defense. Additionally, some firms look to invest in companies at seed stage while others like to get in during expansion. If you’re starting the process of looking for venture capital funding, here are a few that are funding innovation in the DC area compiled by Chris Bing of DCInno.

Maryland Venture Fund (MVF) – A regional leader in the seed and early stage investment game, MVF is a state-supported firm under TEDCO that makes deals with Maryland-based companies.

Arlington Capital Partners – The firm is focused on making a range of investments in industries that are adjacent to the federal space. This includes businesses that build innovative aerospace and defense, government services and technology, healthcare services, and software products.

Swan & Legend – Invests in a wide range of companies including Monumental Sports & Entertainment, CustomInk, Jose Andres’ Think Food Group, Optoro, BigTeams, Anonymous Content, KIND, La Lumiere, SocialRadar, Tango Card, and Quad Learning.

Revolution – The firm may be the most famous venture capital brand from the District. Divided into multiple divisions that respectively focus on different industries and growth stage companies.

Case Foundation – Makes “impact investments” via different programs and initiatives into social good companies.

New Enterprise Associates – Known for being very well funded, NEA invests in information technology, healthcare and energy technology companies at all stages in a company’s lifecycle, from seed stage through IPO.

Razors Edge Capital – The firm invests in private technology companies that work with the defense and intelligence communities. This includes, but is not limited to, data storage, satellite, drone services software and IT service companies.

Middleland Capital – Specializes in making investments in two distinct groupings. The first being: e-commerce, data analytics, software services, health-tech, and communications startups.

Cost Savings Program

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Through our partnership with the Biotechnology Industry Organization (BIO), the international association for the biotech industry, The Tech Council of Maryland (TCM) members can take advantage of discounts and other benefits on products and services from industry-leading suppliers through BIO’s cost savings program, BIO Business Solutions. This partnership provides TCM members excellent discounts and special benefits on such products and services as laboratory products and equipment, clinical trials, liability and other lines of commercial insurance policies, news distribution services, shipping, secure document sharing, office supplies, computer and technology products and more. By leveraging the large group spend of members, TCM provides solutions that bring value to the members across its entire product offering.

Who is eligible to join the program?
The cost savings program is open to all TCM members. Member companies can use one, some, or all of the special pricing arrangements offered through the program.

Are these programs only for life science companies?
No. While some of the individual programs are relevant to only life science companies, every company type and industry can benefit from the savings available through our other programs (e.g. office supplies, shipping services, shared document services, insurance and more.)

What are the advantages of participating in the program?
The discounted prices and value added features available to you are based on the total volume of the program. This program gives you the purchasing power of the largest companies in your industry. We have pooled the purchasing power of thousands of companies to benefit your company.

How much does it cost to participate in the program?
There is no charge to use the program. The program is a member benefit of TCM.

I already use one of the preferred suppliers. Will I have to change the way I do business with that provider? Will I have a limited selection?
Not at all. The individual cost savings programs do not restrict your purchasing selection to a short list of obscure “close out” items. In most cases, the full selection of products and services offered by a supplier are available to you at a discounted price. You do not have to change the way you do business to enjoy discounts and other benefits. In fact, you can request a pricing analysis of your current spend to determine the most economical alternative for your company, without any obligation to join the program.

I already use one of the preferred suppliers. How do I get the discounted pricing?
Simply contact TCM or the provider and inform them that you would like to enroll and take advantage of their cost savings program. A previous customer relationship with the partner does not affect your eligibility to use our program.

Contact: See the cost savings and review a list of our reputable partners to get more information. Click here for more information on the Tech Council of Maryland Cost Savings Program.

October Member Spotlight

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tomi-10-6-16

TOMITM Environmental
Solutions, Inc.
The Tech Council of Maryland recently visited TOMI Environmental Solutions in Frederick, Maryland and talked with their COO Norris Gearheart and Aaron Loveland, Senior Vice President of Marketing and Public Affairs.

Tell us about TOMI and its products.
TOMI provides infection prevention and disinfection/decontamination products and services for healthcare, bio-safety, pharmaceutical, clean-room, and research. The technology was developed by DARPA for the Anthrax scare post 9-11, 2001 to deactivate weaponized anthrax spores by converting a low percentage hydrogen peroxide to a hydroxyl radical. When the product became declassified, it was commercialized. We actually got involved as an end user and then bought the product when it was in beta. After the purchase, we reengineered it and made it more durable.

Our solution, the SteraMist TM powered by Binary Ionization Technology® (BIT™) is an EPA-registered hydrogen peroxide-based mist/fog. The commercial uses are widespread, but we are focusing on pharma, biosafety, clean rooms, healthcare, and commercial and residential spaces. When you look at statistics you can see that there is a very big need in healthcare right now. C. diff caused 500,000 infections in U.S. hospitalized patients in 2011 and 29,000 of those patients died within 30 days of diagnosis. Hospital infections are the 4th leading cause of death in the U.S., and 10% of inpatients in the U.S. contract infections from a hospital room that is cleaned manually. So we are looking to replace traditional and ineffective manual cleaning with SteraMist which is effective, fast acting (kills within seconds), and has superior material compatibility. In fact, we recently received an addendum to our healthcare/hospital disinfectant label for a six-log (99.9999%) kill of Clostridium difficile spores (C. diff) with our SteraMistTM  Environment System.

We sell two products, the first is the SteraMistTM  Surface Unit which is a portable, hand-held system that enables disinfection of all surfaces including high touch, sensitive medical equipment, and electronics. The second is the SteraMistTM  Environment System which is transportable, remotely controlled, and provides complete room disinfection/decontamination using multiple treatment applications per unit. One of the leading research facilities in the world did a test with SteraMist and it was so effective, that they built a state-of-the-art facility where they designed a SteraMist system into the building with wall-mounted controls. We also have the TOMI™ Service Network, which is a network of selected primary service providers that can service multiple locations nationwide. These rapid response technicians provide solutions for complete room disinfection in a wide variety of residential and commercial settings with SteraMist™ BIT™.

What are a few of the goals for the company?
We plan to increase penetration in the U.S. hospital-healthcare disinfectant market including in hospitals, surgical centers, medical, dental, and veterinary offices. We’re also developing new disinfection/decontamination products for indoor air and surfaces. The overarching goal for us as a company is to allow for a healthier population.

Tell us about TOMI’s emergency response work.
Most notably, we won a grant for our SteraMist™ Mobile Decontamination Chamber units used in responding to the Ebola crisis in Liberia, and our products were used for the MERS-CoV outbreak in Saudi Arabia.

Where does TOMI currently operate?
In addition to our office here in Frederick, we have an office in Beverly Hills, California and all of our products are made in York, Pennsylvania and in Delaware. Our team really enjoys working in Frederick. We’ve been here for two years, and it’s a great place to work and live.

Why did TOMI become a member of TCM?
This is an exciting time in the biotech corridor, and we wanted to network and be part of it all. We’ve only been a member for a few months, and so far we’ve attended an Executive Breakfast Roundtable the Animal Biotech Summit, and the Ultimate Crab Feast & BBQ Networking Bash. We’ve already leveraged some of the referrals that we’ve received.

Where can our readers get more information on TOMI and its products?
They can visit our website at www.tomimist.com or they can contact Aaron Loveland at aloveland@tomimist.com or at 301.686.8317.