Worcester’s Entrepreneurial Scene Shows Signs Of Life

Tuesday, April 30, 2013

Steven Jones-D’Agostino, GoLocalWorcester Business/News Contributor

How has Worcester's entrepreneurial landscape changed in the last 10 years, and is growth on the horizon?

Back in 2001, the Worcester Venture Fund opened to great fanfare. The initial focus of the $16-million private venture-capital fund was telecom and infotech. By today’s standards, the fund’s goal was quite ambitious: Invest in up to 10 companies over a two-year period. At the time, though, it seemed like a fairly realistic goal.

But reality proved to be more difficult than originally thought. The Worcester Venture Fund made a $2-million investment in one local company and put $130,000 toward a group investment in another one. Then came the collapse of the telecom/infotech sector.

In 2003, Long River Ventures acquired Worcester Venture Fund and changed its name to Worcester Capital Partners. At the the time, they had a combined fund of $30 million. The new goal was to invest in early-stage, high-growth companies focused on technology ventures. The fund aimed to invest between $500,000 and $1.5 million in firms located throughout New England, with Worcester County as one of the regions to focus on. To avoid competition with large venture funds in metropolitan areas, the fund sought to make investments that generally fell below the threshold of the majority of venture firms and above that of individual investors.

A decade later, where does Worcester stand?

Ten years later, Worcester Capital Partners has, according to the Long River Ventures website, funded only three Worcester County companies – at least one of them, with apparently good results. They are: Convergent Dental, which launched in Worcester and relocated to Natick; Optasite,which started in Worcester and moved to Westboro before being acquired by SBA Communications in 2008 for $430 million; and Verax Biomedical, which began in Worcester and ended up in Marlboro.

Besides being funded by Long River Ventures/Worcester Capital Partners, these three companies share at least three other things in common. All of them began in Worcester. All of them moved out of Worcester. And all of them relocated to MetroWest.

In a 2003 interview, I asked Will Cowen, one of the two managing partners of Long River Ventures/Worcester Capital Partners,whether, given Worcester’s history, it was likely the city was going to rise up and grab its fair share of successful, dynamic businesses. “… [T]he Worcester market [is] made up not of Fortune 500 companies," he said. "It’s made up of a lot of small niche companies in different sectors. One sector that has been a major investment and focus is life science and health care. I think there is tremendous opportunity. Will it be successful? I don’t know.”

These days, Cowen thinks Worcester's entrepreneurial climate and culture are better than a decade ago. “There's tremendous interest among young people in starting companies rather than going into Corporate America,” he says, “and there are resources available to help them that didn't exist a dozen years ago, such as a more business-plan contests. There are accelerators now such as Healthbox, which helps accelerate the growth of health-care companies. This is a real movement. There are now dozens of accelerators in New England that didn't exist then. So there's a lot of infrastructure to help young entrepreneurs to get established. And there's more turmoil and disruption in health care, which means more opportunities for young entrepreneurs to get established and compete with the incumbent players."

Help available for Worcester’s early-stage entrepreneurs

Fast-forward to a decade after Long River Venture's acquisition of the Worcester Venture Fund. We’re not only post-9/11, but also post-War with Iraq Two, post-Stock Market Crash of 2008 and, now, post-Boston Marathon Bombings. While the Dow Jones continues to soar to record levels after nose-diving in the Crash of ‘08, the national economy remains barely able to take off and fly.

Yet like Cowen, some people in Worcester remain eternally optimistic about the city’s prospects for building and maintaining a vibrant entrepreneurial climate and culture. One of them is Amy Mosher, strategy and innovation leader for Workforce Central Career Center, which operated by the city’s Division of Workforce Development in partnership with the state’s Department of Career Services. Following are edited highlights of an interview with Mosher about the revived Worcester Business Resource Alliance,which she co-chairs with Gina Betti, associate director of WPI’s Collaborative for Entrepreneurship and Innovation, whom I’ll profile in an upcoming article:

What is the Worcester Business Resource Alliance all about?

This is [a] very exciting ... alliance of non-profit and government entities. We exist to actually help early-stage entrepreneurs launch and/or grow their business in the Worcester community.

So if I need a certain expertise, there’s a matrix to look at, to figure which is the best resource for me to go to right now among this Alliance?

That’s right. [The Alliance] was brought into existence four or five years ago, and has been strongly resuscitated in the last two years by this group. [We are] really committed to getting the word out there that we’ve got all these various resources available to small businesses in the region, whereas before it wasn’t housed under one place.

This isn’t for just starting up a business. If you have an existing business that’s been around for 30 or 40 years, the Alliance will also provide services to it?

Yes, correct. In fact … quite a few of the Alliance members do prefer that people have been in business for a little while so that [those members] can actually take a look at the real needs of the business today and moving forward.

Here’s the full 29-minute interview with Amy Mosher, which aired recently on The Business Beat on 90.5 WICN.

In an upcoming article, I'll look at the metrics used by the Alliance to track its progress over the past three years.

Steven Jones-D’Agostino is chief pilot of Best Rate of Climb and former editor of Worcester Business Journal. He produces and hosts The Business Beat, a weekly, half-hour show on 90.5 WICN.

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Worcester’s Entrepreneurial Scene Shows Signs Of Life

A decade later, where does Worcester stand?

Help available for Worcester’s early-stage entrepreneurs

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