TEDCO 2.0 initiative rolls out new funding, programming efforts for MD startups

Repost from Baltimore Business Journal

Maryland Technology Development Corp. is restructuring and adding new services for state startups as it ramps up its “TEDCO 2.0” plans.

The TEDCO 2.0 initiative was announced by new CEO George Davis in October. Davis, a veteran entrepreneur and investor himself, said he wants the state-backed organization to be more than just an investment entity, he wants it to be the “glue that brings Maryland’s startup ecosystem together.” In that vein, TEDCO is working to add more services to its menu and expand some of the initiatives it already has, to better meet startups’ needs.

Davis said there are two pillars supporting what TEDCO is trying to do. The first pillar is focused on technology transfer, including some of TEDCO’s traditional funds like the Stem Cell Research Fund and Maryland Innovation Initiative, as well as some new “gateway services.” The organization developed a new suite of services aimed at helping entrepreneurs at every stage of company building, even if they are not in TEDCO’s portfolio.

TEDCO’s second pillar is focused around its investment activities.

Davis said TEDCO can inject $6 million per year into local startups through its Seed Funds, and several million more through its multiple other funds. The organization aims to offer funding for just about every stage of a company’s life cycle, from pre-seed round to Series A or B — with hopes that portfolio companies can participate in several funds throughout its growth.

Davis has spent several months in his new role as CEO traveling the state and talking to startups and other tech industry players, to figure out how TEDCO can best serve Maryland’s entrepreneurial community beyond what it has been doing for the past 20 years.

Here are some of the new and growing initiatives that are part of the new TEDCO 2.0:

  • Expanded executive exchange program — This is one of TEDCO’s existing programs, which provides experienced executives to assist small startups for between six and nine months. Through a partnership with local investment and advisory firm Evergreen Advisors, TEDCO plans to expand that program and make it more widely available to both portfolio and non-portfolio companies. And Davis said a new arm of the program will be added, offering loaned executives for only a 30-day period. “In some cases, that’s all the help a startup needs,” he said. “They need an executive just to help with that big presentation or crafting a business plan.”
  • Upping the ante” on the minority-focused Pre-Seed Fund — TEDCO launched a pilot of its Pre-Seed funding program last year, aiming to provide up to $40,000 in grants to 10 African American-led startups. Harbor Bank of Maryland is a funding partner in the initiative. The goal of the program was to help fill a funding gap that typically exists for minority entrepreneurs who don’t have access to friends and family funding. The program was well-received, with more than 400 applicants in its pilot year. TEDCO is expanding the program, both in terms of size and scope. Davis said he wants to make the fund more inclusive, offering $40,000 to $50,000 grants to companies that are owned by any minority group, including racial and ethnic minority, veterans and women.
  • Expanded resources for the Rural Business Innovation Initiative — This program is designed to provide technical and business assistance to small and early-stage technology companies based in rural Maryland, representing TEDCO’s effort to be more “inclusive with [its] expertise and funds.” TEDCO has added a pre-seed funding component to the RBI program, and is looking for ways to expand the program and provide more access to entrepreneurial resources in Maryland’s rural zones.
  • New assessment tool — Young startups will be able to use a new online tool to get a quick look at where they stand in terms of progress and growth. It will rank the company on a 1-to-4 scale, based on its relative needs at any given time. “It’ll tell you, at this stage you may not be ready to look for money yet, but here’s what you need to do to get there and here are some services to help,” Davis explained.
  • More online resources — TEDCO does not have enough human capital to meet all the daily needs of startups in Maryland, Davis said. So the organization is providing more online tools to help companies with their business needs, regardless of whether they do or do not get money from TEDCO. The website will provide access to resources like LeanStack, a platform that helps companies with customer discovery, and PitchCreator, an investor-built tool that helps teach entrepreneurs to master their funding pitches. Davis said the idea is for TEDCO to be a portal for a kind of online “startup school.”
  • Stage-Gate pitch sessions — TEDCO will be hosting a new series of pitch mentoring sessions, where it brings in mentors and executives to help walk startups through their presentations, offer feedback and strengthen their pitches. This service is designed to help entrepreneurs who are seeking their first rounds of funding and starting to pitch investors.
  • Innovation Connect program — TEDCO is partnering with the Maryland Department of Commerce to target traditional enterprise companies, like McCormick & Co., Northrop Grumman Corp. and Black & Decker, to ask about their innovation needs and try to connect them with startups that can meet those needs. The goal is to build stronger relationships between enterprise and innovation businesses in Maryland.

All these services will roll out over the coming months. Davis said TEDCO is seeking more private partnerships to help support some of these new efforts as well.

TEDCO has also done some internal reorganizing, including new managerial promotions and hires, as part of its 2.0 restructuring. The firm has brought on Frank Glover, from venture capital firm Greenspring Associates, to lead its Seed Investment Funds. TEDCO has about 140 active seed fund investments, in tech-based companies that are less than five years old with fewer than 20 employees.

Jennifer Hammaker, formerly the director of the Maryland Innovation Initiative, has been promoted to vice president of business development. Arti Santhanam, has been promoted from managing the Life Science Investment Fund to director of MII, and will now direct and manage the $5.8 million program that helps university-born companies move toward commercialization. Angela Singleton and McKeever “Mac” Conwell are the new program managers for the Pre-Seed Fund, and will design, launch and manage a new funding plan for the expanded program.

Davis said he hopes through these new initiatives, TEDCO 2.0 can yield some major returns for the state economy, both in terms of economic — jobs — and monetary value.

He pointed to examples like Harpoon Medical Inc., which saw a $100 million exit late last year, and Personal Genome Diagnostics Inc., which recently raised $75 million and is growing fast in Baltimore.

“With Harpoon, we had $750,000 invested and we got a check for $5.2 million on that deal. And Personal Genome Diagnostics is adding tons of jobs, and is destined for a pretty big exit as well,” Davis said. “That return money goes right back into the system, so we can make more investments in other companies. This is how ecosystems really evolve.”