ThinkTec Summit Focuses on Future NeedsSarah Moise / CRBJ
The Charleston Metro Chamber of Commerce recently held its fourth annual ThinkTEC Innovation Summit, "Vision 2020."
Area business leaders gathered to hear from experts in the fields of technology and knowledge-based business. More than a status report, the summit focused on the last year's changes and initiatives and developed a vision for future growth.
Keynote speaker Roseann Rosenthal, president and CEO of Ben Franklin Technology Partners in Philadelphia, likened that city's challenges to Charleston, considering that both had once lacked statewide initiative and endured a substantial military base closure.
"[Philadelphia] overcame the same hurdles by forming coalitions, rather than having one organization that is the one stop shop for everyone," notes Dr. John Clarkin, director of the Tate Center for Entrepreneurship at the College of Charleston. "They've got government, academia and the private sector in a coalition that works."
Like Philadelphia, Charleston is already on the road to merging the efforts of its knowledge and technology sectors. The Charleston Digital Corridor has seen enormous growth and change in the past year, with the addition of eight new companies and 206 employees, according to Ernest Andrade, the corridor's director.
During the summit Andrade reported on the development of a corridor fund for seed and loans for young companies, the development of a talent portal, as well as the creation of short-term work space for new and incoming companies. The talent portal should be particularly beneficial in remitting a problem experienced by at least two of the startup panelists.
Both Steve Swanson, president and CEO of Automated Trading Desk, and Shawn Jenkins, president and CEO of BenefitFocus.com, stated that personnel was one of their greatest hurdles. "The thing we need is people," says Jenkins. "As we grow, we continue to hire new people. And it's similar to capital being scarce-senior software engineers with talent are hard to come by."
"Personnel is a huge issue," Swanson agrees. "I have had successes with College of Charleston, drawing the best and brightest from the school. But it took time to make that relationship happen. The state needs to make relationships easier. We also have to find people wherever we can and bring them to Charleston, which is costly and time consuming."
Another summit attendee was Dr. Kelvin Brockbank, chief science officer for Organ Recovery Systems, who says the company is moving into more government funded research programs involving human stem cells, tissue research products and heart valve development programs, all with a major focus on alternate organs.
"We are trying to do research, and keep an organization funded in Charleston," he says, and cites MUSC's proximity as a major reason for the company's local success. "When we first opened the lab, we didn't even have test tubes. MUSC helped us numerous times. Now the cash flow goes in the other direction," he says.
ORS received $9.3 million through federal funding and raised $23 million from venture funding worldwide. "We're just closing on our third round of funding, and we never looked for funding in South Carolina," says Brockbank. "You have to get on with it and not wait for the state to catch on. Go out and develop your idea and find capital yourself."
Alan Craig, founder of Competitive Economics and the first executive director of ThinkTEC, states that the state has done a good job starting to build capital, including passing the Life Sciences Bill and important venture capital legislation, but says, "There is more work to be done."
One problem is the lack of angel funding in the region. Charleston Angel Partners, for instance, failed the first time, and now works on a new model, which does not include an actual angel fund. CHAP now brings in potential companies, and its 60 members can opt in or out of private investment.
"We feel like this model is working," says Rick Fenwick of CHAP. "We've gotten interest in the region from other groups that like the model. The way these groups succeed is to share deal flow. The difficulties in attracting qualified investors to private equity are that people are not familiar with private equity investment. There is no reason we can't have a group of 200 to 300 people and support more startups. It requires education, word of mouth."
Ron Owens of Kiawah LLC/Banyan Fund says that South Carolina doesn't provide any incentives for people to invest in a fund. "The institutional investor base and small real estate banks are not familiar with alternative investments. The universities in the state do not provide capital for alternative investments."
Owens cited North Carolina, which was recently allowed to invest in the stock market. "The foundations there alone can raise $50 million to $100 million. The state offers 25 percent tax credit for any private equity investments. South Carolina needs to change. There needs to be a relationship between public universities and private investors. The state needs to loosen barriers to create cooperation between those entities." J
ohn Clarkin says that the summit was successful in showing both the steps already taken in the past year, and the action plan needed to cross the next hurdles. "It should be obvious to everybody that we have a pent-up demand, and that there is a market to bring these forums together."