Home / Industry / Government & Politics / $10 million startup challenge

$10 million startup challenge

A one-of-a-kind, $10 million multiyear challenge could boost Rochester’s visibility in innovative manufacturing.

Gov. Andrew Cuomo in January announced the establishment of the Photonics Venture Challenge in Rochester. The business competition aims to support startup companies that commercialize optics, photonics and imaging technologies through a business accelerator program.

The top startup company each year will be awarded $1 million, the state said.

High Tech Rochester Inc. was instrumental in bringing the challenge to Rochester through a proposal that was part of the Upstate Revitalization Initiative plan. The proposal was endorsed by the Finger Lakes Regional Economic Development Council.

“I think it’s going to shine a national and international spotlight on our region in the area that we are strongest in the world,” HTR president James Senall said of what Rochester has to offer. “There are other large-scale competitions out there, but what’s different about this one is it’s based on the historic strengths of our region.”

Robert Duffy, president and CEO of the Greater Rochester Chamber of Commerce, said Rochester has a leg up on other regions because its core strengths are centered on photonics, optics, imaging and other ancillary support professions.

Those strengths are thanks in part to the region’s universities and colleges, among them Rochester Institute of Technology and the University of Rochester, as well as companies such as Bausch & Lomb Inc. and Xerox Corp., Duffy noted.

“We have such a rich tradition, such tremendous talent still here and such great potential,” he added. “The challenge certainly provides a mechanism and incentive for companies and for other opportunities to come to the Rochester region.”

Some 10 to 15 startups will be selected for the program through an annual competitive application process, with each company receiving an initial investment ranging from $100,000 to $125,000 in exchange for equity.

Selections for the first round are slated to be made by fall.

Participants in the challenge are to go through a four- to six-month structured accelerator program in which they will build products, access customers and refine their business models. The program will provide work space at HTR’s Business Accelerator in Sibley Square.

At the conclusion of the annual competition, teams are to present their work at a Demo Day to an audience of venture capitalists, optics and photonics companies and other industry players.

“It’s the largest scale program of its kind that we’ve ever had here in our region,” Senall said.

He compared the competition to Western New York’s 43North, a similarly modeled $5 million startup competition funded by the state’s Buffalo Billion initiative. 43North winners also receive guidance from experts in their fields, access to business incentive programs and incubator space in Buffalo for a year.

“That’s brought a ton of attention to the Buffalo area startup scene,” Senall said. “It’s attracted venture capitalists. It’s attracted other entrepreneurs. The same thing is going to happen here.”

Combine that with the launch of AIM Photonics—which will test and assemble chips that use photons for semiconductor circuits—and its packaging facility that will be up and running later this year, Senall noted, and you have an economic trifecta for Rochester.

“The money that companies are going to get to participate in the program and the investments that they’re going to get are going to be great,” Senall said. “But equally important is that this is where these kinds of companies have the best chance of success to build their businesses.”
Duffy noted the cluster of photonics-related firms that has developed in Rochester.

“We have great strengths that are recognized across the country,” Duffy said. “I’m convinced that our core strengths here, with what’s being invested now and what is already going on here, that it will mean a growth spurt for our economy down the road.”

Senall cautioned that although the competition will bring new companies to the region, it still is geared toward small businesses.

“These are all going to be startup companies, so we’re not talking about bringing a 1,000-person business here,” Senall said. “We expect that the companies that get into this thing and are selected for this
program—several will be from our region because we’re the experts.”

The competition will be a sparkplug to help drive more excitement and more attention to the Rochester region, Senall added, ultimately building more companies that have long-term success here.

Award winners must live and operate in the Rochester region for at least one year following their award, ideally within or near AIM Photonics or the Sibley Square business incubator, Cuomo said when he announced the challenge.

Duffy said he is cautious about trying to predict what the venture challenge will mean in terms of job numbers, as it will be up to Rochester’s business leaders and others to promote and support the project.

“I do believe it’s time to rebrand Rochester,” Duffy said. “Rebranding doesn’t mean changing direction. Rebranding is really reinforcing our core strengths.”

Duffy said it is not always about how many jobs a specific company will bring but how many partners and how many supply chain networks it will bring.

“It’s creating an ecosystem that will be sustainable and will grow in the future,” Duffy said.

The focus of AIM Photonics is not a quick, one-shot investment, he added.

(c) 2017 Rochester Business Journal. To obtain permission to reprint this article, call 585-363-7269 or email madams@bridgetowermedia.com.

Leave a Reply

Your email address will not be published.

x

Check Also

eye-eyelash-eyelid-9389

Bausch & Lomb to boost manufacturing in Rochester, Ireland (access required)

Bausch Health Cos. Inc. is planning a major expansion to its contact lens manufacturing capacity in Rochester and Waterford, Ireland, ...

The former estate of Elizabeth Sibley Stebbins is available for rent as office space, and for sale if the price is right. (Photo by Kevin Oklobzija)

Broker: Stately East Ave. mansion has office appeal (access required)

The stately, ornate, three-story brick home, constructed during World War I and one of the many historic estates on East ...