Last Friday, Innovation Works (IW) announced the creation of AlphaLab, a rapid-product development accelerator for software, game development and internet-related startups. As mentioned in these articles in the Pittsburgh Business Times and Tribune-Review, we are hopeful that AlphaLab will serve as a focal point for software developers in the Pittsburgh region, and can help launch some of the next wave of software, gaming and web-related companies.
Every six months, 6 companies/teams will be selected to participate in a six-month intensive program. Companies will receive a $25,000 investment from IW, free office space in AlphaLab's 5,000 sq. ft. South Side facility, staff support to assist with various aspects of launching the product, access to a network of beta-testers and input from business advisors and experienced software entrepreneurs. The deadline for applications is March 31. Anyone interested in applying should go to www.iwAlphaLab.org and fill out the online application. Selected teams will be notified in early May, and move-in day is June 2nd.
Monday, February 25, 2008
Friday, February 15, 2008
Jack Thorne - Catalyst for Pittsburgh Entrepreneurship
Jack Thorne, an important figure in the modern history of Pittsburgh tech entrepreneurship passed away this week. Jack's decades of work helped to create much of what we now view as Pittsburgh's entrepreneurial infrastructure. For anyone who didn't know Jack, below is an email from Frank Demmler, a friend and former colleage of Jack's at the Enterprise Corporation and CMU.
"For those of you who don't Jack, or know of him, much of what we are doing today in terms of technology entrepreneurship can be traced back to him.
Briefly, he graduated from one of the first business school classes from CMU. He went out West to work at Hughes Aircraft and was one of the first employees of Litton Industries. From there he founded his own electronics firm that he sold in the early 1970s.
Dick Cyert, then the Dean of the CMU business school, and soon thereafter to be CMU's president, recruited Jack to start a small business program at CMU in 1972. For 10 years he was a lonely voice in the wilderness, working directly with the few entrepreneurs who were in the region at that time (Steve Heliman - Medrad; Jerry McGinnis - Respironics; Glen Chatfield - Duquesne Systems; etc.). In the early 1980s, the RK Mellon Foundation asked Jack to design a program that could clone himself and with a $1 million grant, The Enterprise Corporation of Pittsburgh was founded in August 1983 (and I joined it in January 1984).
Those activities combined with the creation of the Ben Franklin Partnership and the founding of the Pittsburgh High Technology Council formed the foundation for what the new Pittsburgh of today has become. I am not overstating it when I say that without Jack, these efforts would not have survived to today."
"For those of you who don't Jack, or know of him, much of what we are doing today in terms of technology entrepreneurship can be traced back to him.
Briefly, he graduated from one of the first business school classes from CMU. He went out West to work at Hughes Aircraft and was one of the first employees of Litton Industries. From there he founded his own electronics firm that he sold in the early 1970s.
Dick Cyert, then the Dean of the CMU business school, and soon thereafter to be CMU's president, recruited Jack to start a small business program at CMU in 1972. For 10 years he was a lonely voice in the wilderness, working directly with the few entrepreneurs who were in the region at that time (Steve Heliman - Medrad; Jerry McGinnis - Respironics; Glen Chatfield - Duquesne Systems; etc.). In the early 1980s, the RK Mellon Foundation asked Jack to design a program that could clone himself and with a $1 million grant, The Enterprise Corporation of Pittsburgh was founded in August 1983 (and I joined it in January 1984).
Those activities combined with the creation of the Ben Franklin Partnership and the founding of the Pittsburgh High Technology Council formed the foundation for what the new Pittsburgh of today has become. I am not overstating it when I say that without Jack, these efforts would not have survived to today."
Tuesday, February 5, 2008
2007 Pittsburgh VC Totals
For several years, Innovation Works (IW) has been tracking data about venture investment in the Pittsburgh region, which we view as one of the most objective ways to measure the health of the local early-stage tech community. Our 2006 year-end report noted that the region's 2006 VC investment total of $230 million was the highest amount received by local companies in the post-bubble era, and gave Pittsburgh one of the fastest 10-year growth rates for VC investment among all regions in the United States. At the time, however, we were cautious in our enthusiasm due to the fact that $100 million (43%) of the 2006 VC investment came from a single deal.
So, how did the region do in 2007? According to data from the PWC MoneyTree Survey, 2007 was Pittsburgh's second-highest year in the post-bubble era, with 43 companies in the Pittsburgh region obtaining a total of $206 million in venture investment. Here's a chart showing the total amount and number of companies receiving investment in the Pittsburgh Metropolitan Statistical Area since 2002 [note that MoneyTree is now showing the 2006 total as $242 million]:
Unlike 2006, no single deal dominated the results in 2007. The largest investment was a $47 million investment in Millennium Pharmacy Systems, Inc., which accounted for approximately 22% of the total for the year. Including Millennium, four local companies attracted investments larger than $20 million, six companies obtained investments of $5-20 million, seven companies received investments of $1-5 million, and the remaining 26 companies received investments of less than $1 million each (23 of which were seed investments).
Despite the fact that the total amount of venture investment was down from its post-bubble high, the total was still well-above the region's prior 5-year average ($139 million), and the investments seem to be spread more broadly across a large number of companies without one big deal skewing the results. The average investment per company declined from an average of $6.4 million per company in 2006 to $4.8 million in 2007, which was still above the prior 5-year average of $3.9 million per company.
In the next post, I'll talk about the trends we're seeing in venture funding by tech sector.
So, how did the region do in 2007? According to data from the PWC MoneyTree Survey, 2007 was Pittsburgh's second-highest year in the post-bubble era, with 43 companies in the Pittsburgh region obtaining a total of $206 million in venture investment. Here's a chart showing the total amount and number of companies receiving investment in the Pittsburgh Metropolitan Statistical Area since 2002 [note that MoneyTree is now showing the 2006 total as $242 million]:
Unlike 2006, no single deal dominated the results in 2007. The largest investment was a $47 million investment in Millennium Pharmacy Systems, Inc., which accounted for approximately 22% of the total for the year. Including Millennium, four local companies attracted investments larger than $20 million, six companies obtained investments of $5-20 million, seven companies received investments of $1-5 million, and the remaining 26 companies received investments of less than $1 million each (23 of which were seed investments).
Despite the fact that the total amount of venture investment was down from its post-bubble high, the total was still well-above the region's prior 5-year average ($139 million), and the investments seem to be spread more broadly across a large number of companies without one big deal skewing the results. The average investment per company declined from an average of $6.4 million per company in 2006 to $4.8 million in 2007, which was still above the prior 5-year average of $3.9 million per company.
In the next post, I'll talk about the trends we're seeing in venture funding by tech sector.
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