People-Places-Capital Mantra Takes VCET – and Vermont Entrepreneurs – Far
- By Jeffrey R. Wakefield
With its superhero-themed art, retro furniture, random ping pong table and open floor plan, the Vermont Center for Emerging Technologies’ eye-catching co-working space – a little bit of Palo Alto plunked into Burlington’s FairPoint Technology Hub – is a fitting symbol for the dynamic contribution the economic development organization is making to Vermont’s start-up culture.
But an everyday suite of offices in Winooski may tell the VCET story just as compellingly.
The 5,000-square-foot space, tucked into an office park off East Allen Street, is home to SemiProbe, a fast-growing tech firm that, but for VCET, to borrow the developer’s phrase, might still be a gleam in the eyes of its founders.
In 2007 VCET contributed space to the fledgling start-up, in the form of its Farrell Hall incubator on the UVM campus. Seed financing from VCET followed several years later, which spurred significant additional investment. Eighteen months ago, VCET helped recruit the company’s CEO, Doug Merrill.
Today SemiProbe, which designs and manufactures equipment for quality-testing semiconductor components, has clients ranging from United Technologies to Sandia National Laboratories, 11 employees, two hires in the works and the potential to add significantly more staff in the future.
“We had a really strong year,” Merrill says, “and we’re looking at long term, multi-year growth.”
Those words are music to the ears of VCET president and UVM alum David Bradbury (Business Administration, ’88) and confirmation that the approach VCET takes to launching and scaling start-up companies is on target.
"Our goal is to create a density for innovation,” Bradbury says, consisting of three components he repeats like a mantra, all of which SemiProbe tapped into: people, VCET’s expansive network; places, the three physical spaces VCET runs, including Farrell Hall, the Burlington facility and an incubator at Middlebury College; and capital, VCET’s $5.1 million seed fund, which, it uses to expertly leverage additional investment.
SemiProbe is hardly the only success story that tri-partite approach has yielded. Since 2008, VCET’s 50 “portfolio companies” – those it provided seed capital to – have raised over $172 million total in capital. In turn, those companies have lifetime sales of $133 million and a payroll of $112 million.
VCET’s stellar track record prompted the Stockholm-based University Business Incubator Index to rank it the eleventh best university and college-orientated business incubator in the world and fifth best in the U.S in 2013.
VCET’s expansion to the stylish Burlington co-working space (pictured above) – Bradbury uses the term reluctantly, since it’s equally a start-up incubator and accelerator – was a no brainer.
“All you had to do was walk into a coffee shop and see how many people were by themselves for six hours, typing away and drinking coffee and not talking to anybody,” he says. “I remember thinking, ‘I want to know what you’re doing. How can I help you? How can you help me?’”
When FairPoint Communications approached VCET board chair Frank Cioffi, president of the Greater Burlington Industrial Corporation, in 2014, offering to help spur Burlington’s innovation culture by donating a floor of the company’s 266 Main Street building, Bradbury was all in.
The space opened the next year, was an immediate hit and now has close to 130 members, including remote workers from Google, HubSpot and Twitter.
“People are cordial and incredibly smart; it’s hitting on everything I could look for,” says Betsy Nesbitt, founder of Flyway Wellness, an outcomes based wellness service that combines on-site yoga and meditation classes with proprietary data-based tools serving behavioral health treatment programs, as well as the business and hospitality sectors across New England.
VCET’s reach extends far beyond Chittenden County to the 1,630 starts-ups it has worked with around the state – Northern Reliability in Waterbury, for instance.
When start-up costs caused cash flow impacts for the firm, which creates batteries and other systems for storing renewable energy, VCET stepped in with bridge financing that prompted more investment and a team of advisors that helped reposition the company’s business plan. Last year it had record sales.
It’s not easy being an economic development catalyst in the 21st century, as the start-up environment grows more competitive each year and entrepreneurs more sophisticated.
“VCET has been substantially different every 36 months based upon the needs of our startups,” Bradbury says.
Recently the organization has put emphasis on creating original content – in the form of a podcast called Start Here and networking events spotlighting female entrepreneurs. The Female Founders Series, created and managed by Bradbury’s VCET colleague, Sam Roach-Gerber, has taken the start-up community by storm, with nine sold out events over the last year and a half.
While VCET has always been autonomous, it was born on the UVM campus, in part as a way to spur commercialization of faculty research. VCET launched in 2005 as an independent 501(c)3 in Farrell Hall with funding from the university, Senator Patrick Leahy and the Vermont Technology Council.
UVM is still a funder and remains closely connected through its faculty entrepreneurs, six of whom are in residence at one of the VCET facilities, and its students. Fully one third of VCET’s 188 members are student entrepreneurs and interns, many from UVM.
That composition is attractive to UVM provost David Rosowsky, a new member of the VCET board, who would like to see even more students involved.
VCET, Rosowsky says, “can create a platform for interested students to become engaged in innovation and entrepreneurship, be part of startup culture and maybe even launch a startup.”
As new companies form and grow, “that will create pathways and opportunities for students that could convince them to stay in Vermont,” contributing much needed youth to the state’s aging workforce and helping “drive a sustainable, prosperous and compelling future for the state,” one of UVM’s overarching goals as the state’s land grant university, Rosowsky says.
As important as VCET’s other contributions were to his company’s success, it’s the “people” element of the VCET troika that stands out for SemiProbe’s Merrill.
“VCET has access to an incredible network of entrepreneurs and support professionals,” he says. “If you’re a small company and you’re currently launching in Vermont, David is a guy who should be in your Rolodex.”