San Antonio—Echolase, a young startup with a product that crosses over between technology and life sciences, is on the brink of getting its first outside funding from a local investment group.
But with the future of the company dependent on getting more money—Echolase needs funds to further test its medical imaging device, to rent office space, and to hire employees—the founders are eyeing public funds, too, such as the few billion dollars in federal money awarded to startups through from Small Business Innovation Research and Small Business Technology Transfer grants. Randolph Glickman, Echolase’s chief technology officer, was at a meeting hosted by the University of Texas at San Antonio last week designed to help researchers like him learn how to most effectively apply for and earn federal money.
It was the second event on the subject Glickman attended this summer. The first was at the University of Texas Health Science Center at San Antonio, where Glickman is a professor of ophthalmology. A trained researcher, he has plenty of experience writing grants for to gain funding for his academic work.
Business, he now sees, is much different.
“I’ve realized my experience doesn’t entirely carry over,” Glickman says. “I probably need to do a little learning.”
Glickman’s experience highlights the driving force behind the meetings at UTSA held last week and the health science center-hosted event earlier in the summer. Fledgling companies like Echolase are plentiful in San Antonio, a city with numerous academic and government-funded research institutions and a burgeoning tech scene. But information on how an entrepreneur like Glickman can learn to run a business, and find early stage investors to fund them, is scarce.
Targeted Technology is one of only a few local firms in the city that has given money to multiple San Antonio startups, though there appears to be increasing interest in investing in San Antonio. Tech-focused investors Scaleworks and Geekdom Fund have been finding more deals in technology in recent years, and the acquisition of Rackspace by a private equity firm may attract more attention for cloud infrastructure and cybersecurity businesses in the Alamo City.
Meanwhile, other resources are starting to trickle in. A small San Antonio venture capital investor, Fountainhead Investment Partners, announced last week that it is creating a new “foundry” that aims to help early stage life sciences ideas turn into companies, according to the San Antonio Business Journal. Called the Watershed Idea Foundry, it plans to work with companies on product development, manufacturing, and regulatory consulting, among other challenges. Fountainhead was founded in 2014 and makes investments of up to $1.5 million.
Besides actually finding funding, knowing how to best apply for it can feel like a Sisyphean task for entrepreneurs without business experience. That’s part of the reason the commercialization offices at UTSA and UT Health Science Center hosted the events this summer, according to Christine Burke, the director of the UTSA commercialization office.
“I’m not pushing to spin them out as fast as I can. I’m pushing to get them ready with all of the resources I have at my disposal,” Burke says. “When they’re ready, there’s a really concrete path for them to go from SBIR to regular investors.”
The event last week brought in representatives from the National Institutes of Health, who lectured entrepreneurs on writing grant proposals and marketing plans, among other tips. Glickman says he met an NIH program manager who runs the department most relevant to Echolase, which has developed a device that pinpoints foreign objects in the human body, like a splinter of wood or plastic, using ultrasound and laser-induced images.
Competition for such public funding is fierce. The NIH received more than 51,000 grant applications in 2013, and almost 55,000 the next year, according to the organization. Only 17 percent were funded in 2014, down from 18.1 percent the year before. The process from application to actually receiving money can also take years.
It can work out, though. A San Antonio medical device startup, Cardiovate, received a $150,000 SBIR grant from the National Science Foundation that funded an early, small 30-day clinical trial. The company plans to apply for a second $750,000 grant from the NSF in January to help pay for its pending one-year animal study, CEO Mark Standeford told Xconomy last month.
Standeford, who was at the UTSA event last week, and says he came specifically to listen a session focused on writing a competitive SBIR phase 2 application.
Glickman, the CTO of Echolase, is hoping his company can follow a similar path. He’s planning to apply for grants from the NIH and the Department of Defense. And there’s still the hope that the angel investors currently performing due diligence see potential in his device. Echolase is keen to get funding where it can, Glickman says.
“There’s never too much money around,” he says. “That’s always the problem.”