As we prepare to spend next week discussing innovation and entrepreneurship at the third annual Maine Startup and Create Week, it’s valuable to look back at what we’ve accomplished over the past year as a community.
Kerem Durdag, entrepreneur in residence at the Maine Technology Institute, sees progress.
“There is now a palpable sense of startup community, the ‘pipeline’ is active, there is ‘churn,’ things are getting reported in the media,” he said. “There is a general acknowledgement (and I have been part of the ecosystem since its inception in 1999-2000) that we are getting a sense of ‘rootedness.'”
Likewise, Jess Knox, founder of Maine Startup and Create Week and Maine Accelerates Growth, believes the ecosystem is evolving due to a number of factors.
“There’s more collaboration, but there’s also more seriousness and focus on the notion that entrepreneurship and innovation can really have a positive impact on the arc of Maine’s economy,” he said. “More people are getting involved in doing, not just talking about it.”
Here are five major milestones, in no particular order, that Maine’s startup community has experienced since last year’s Maine Startup and Create Week.
Acquisitions. Exits. Liquidity events. Whatever you call them, when a major company is acquired, it’s a big deal for the local business community (sometimes on the negative side, more often on the positive). In the past year, three major acquisitions were announced:
- In December, Massachusetts-based PTC Inc. announced it would acquire Portland’s Kepware Technologies for $100 million.
- In February, Garmin announced it would acquire DeLorme in Yarmouth for an undisclosed amount.
- In March, Dechra Holdings US Inc. announced it would acquire Putney Inc. for $200 million. That deal closed in April, after which Dechra laid off more than a dozen of the company’s 60 or so employees.
In each of these acquisitions, the founders of those local companies were still major shareholders and, therefore, had big paydays. (Some more than others: Corky Ellis, founder of Kepware, for instance, still owned almost the entire company, while Jean Hoffman, founder of Putney, was only a minority shareholder at the time of the sale after trading equity for capital to fund her business.) Whether those newly minted millionaires will deploy their new-found wealth in a new job-creating startup or in the form of angel investments in other startups remains to be seen. But that’s the hope with major exits like those we’ve had.
Rise of the Rest
Steve Case, founder of AOL and current venture capitalist, chose to visit Portland in October as part of his Rise of the Rest tour, a national tour where he highlighted startup communities that exist outside Silicon Valley, Boston and New York City. During his visit, he decided to invest $100,000 in Rapport, a Portland startup working on software to help businesses manage their energy consumption in a sustainable manner. I consider Steve’s visit as evidence that Portland’s startup scene is being noticed on the national stage.
Greenlight Maine, while it hasn’t made a huge splash (I don’t watch TV and they haven’t been very successful or active in engaging the community via other channels), is still significant because of the dollar amount. To the young company that wins, $100,000 could provide that extra runway they need to commercialize their product. Greenlight Maine is also significant because it shows that corporations are willing to put real dollars toward supporting the startup community.
Maine Accelerates Growth
When it became clear that Blackstone Charitable Foundation would not be re-upping its support for the initiative they launched in 2011 to create 10,000 jobs in Maine over 10 years, it would have been easy for it to fade away and join the graveyard with the other perfunctory and unfunded economic development initiatives we’ve seen in Maine over the years. Instead, Jess Knox, Martha Bentley, and other stakeholders like Don Gooding, past director of the Maine Center for Entrepreneurial Development, and Brian Whitney, president of the Maine Technology Institute, put their heads together and decided to harness the momentum to create a new effort. Maine Accelerates Growth has developed a unique funding model that involves various stakeholder groups to fundraise through Maine Community Foundation in such a way that those dollars trigger more dollars from other donors. MxG recently announced it’s ready to accept applications for funding.
Funding, funding, funding
Maine’s had a good year in terms of companies’ ability to attract investment. Maine companies (well, mostly just two Portland tech companies) raised $67.8 million during the third quarter of 2015, more than in any single quarter since records began being kept in 1995. That quarter, Vets First Choice raised $52.3 million from 33 new and existing investors, while CashStar Inc. raised a not-insignificant $15 million.
The Maine Angels, a group of angel investors, have also had a good year. In 2015, they were one of the most active angel investment groups in the country, closing 23 deals totaling $2.2 million in investment.
Neither of these funding-related milestones mean it’s not still difficult for mid-stage startups to find the necessary capital to fund their next step. That’s still a challenge.
So, there you have it. A lot has been accomplished in the past year. Remember that next week when you’re having conversations about the future at Maine Startup and Create Week. The sky is the limit as long we have and support the entrepreneurs and doers in the community.