Help coming to Kansas startups
BYLINE: JASON GERTZEN, The Kansas City Star
Young biotechnology businesses in Kansas are about to gain a potentially powerful new champion.
The board of the Kansas Bioscience Authority today is to consider a $5 million package creating an organization that aims to guide startups to investment backing that fuels rapid growth.
After seeding the initiative with $200,000 in startup money last year, the authority's leaders are poised to sign off on a substantial next step during their meeting in Lawrence. Patterned after something in Cleveland called BioEnterprise, the new Kansas organization will focus on grooming companies so they are more attractive to venture capitalists.
"We are definitely going to do the BioEnterprise model," said Thomas Thornton, the Kansas authority's president and CEO.
It is an interesting model to follow.
Leaders at such institutions as the Cleveland Clinic, Case Western Reserve Universityand hospitals in the northeastern Ohio region established their initiative about five years ago. BioEnterprise refines business plans, recruits executives and takes other steps that heighten the chances for select medical device, biotechnology and health care service companies to raise investment dollars.
The more than 50 companies assisted by BioEnterprise since 2002 have attracted more than $315 million.
The activity also has been lucrative for the universities and others involved in the initiative. BioEnterprise reported that more than 160 technology transfer deals generated more than $55 million in licensing and other fees.
While life science companies in Kansas have attracted limited financial backing in recent years, it's not too far of a stretch to eventually expect $100 million a year in annual venture capital and private equity investments, said Baiju Shah, president and CEO of BioEnterprise in Cleveland.
"I think there is a lot of potential for venture development in Kansas, given the assets the region has," said Shah, who has visited this area, served as host in Cleveland to visiting Kansas leaders, and helped extensively in developing the new Kansas program.
It will be a formidable task to reach this type of success. The Kansas City area is not viewed right now by venture capitalists as a hotbed for possible investments, a point highlighted in a survey Cleveland's BioEnterprise did recently to gauge the perceptions bioscience venture investors had about cities throughout the Midwest.
This can be overcome by raising awareness about initiatives such as the more than $500 million bioscience economic development package in Kansas, research strengths such as the pharmacy program at the University of Kansas, and strong health care technology companies in the region such as Cerner Corp., Shah said.
"There hasn't been a lot of communication with the health care venture community from individuals in that region," Shah said. "There is not an awareness of what the potential might be."
With the Kansas authority board's approval, the next step will involve a national search to find a leader for the new program, Thornton said. Officials hope this person and a small staff can be in place by summer.
How we stand Kansas City was viewed as one of the weaker regions for potential bioscience investment deals when Cleveland-based BioEnterprise surveyed venture capitalists about their perceptions of opportunities in Midwestern cities.
To reach Jason Gertzen, call (816) 234-4899 or send e-mail to jgertzen@kcstar.com.