After Six Weeks, WI Mini-Accelerator’s First Class Looks to Future
The first five early-stage startups selected for Wisconsin accelerator Gener8tor’s new, free program for entrepreneurs affiliated with the state’s colleges and universities pitched themselves Thursday evening before an audience of investors, local business leaders, and Gener8tor alumni.
The incipient program, called gBETA, is half as long as Gener8tor’s core 12-week program. (Disclosure: Gener8tor is a supporter of Xconomy in Wisconsin, but our coverage is determined independently by our editors.)
The other major difference concerns what participants get—and give up.
With its core program, Gener8tor gives companies $20,000 in up-front cash for an equity stake of 6 to 9 percent. The startups are guaranteed a follow-on investment of $70,000 in the form of convertible debt from Gener8tor and Angels on the Water, the accelerator’s Oshkosh, WI-based investment partner. In addition, the BrightStar Wisconsin Foundation gives $50,000 to any graduating company with permanent employees in the state.
Participants in gBETA don’t give up any equity but also don’t have the cushion an immediate cash infusion provides. Gener8tor co-founder Troy Vosseller said raising money from friends and family is one option. Or, he said, companies can calibrate their business models to bring in revenue quickly. Daniel Litvak, CEO of WeightUp, which makes smart wristbands for fitness buffs, said during his pitch that the company had done over $2,500 in sales the previous week.
But some of Litvak’s classmates are playing a longer game when it comes to signing up paying customers.
EnsoData CEO Chris Fernandez said his company has developed a machine learning algorithm that can cut costs and staff time devoted to diagnosing sleep apnea. Today, Fernandez said, most sleep clinics employ technicians to manually score an eight- to nine-hour slumber one minute at a time. Only 13 percent of facilities use any kind of automation to evaluate results of the 3.5 million diagnostic sleep tests performed annually in the U.S., he said.
Fernandez said his company targets large healthcare organizations because they’d enjoy the most cost savings from automating sleep scoring.
“We can provide the most value to big healthcare systems that do hundreds of thousands of sleep tests per year,” said Fernandez, who earlier this year earned a Masters in Biomedical Engineering from the University of Wisconsin-Madison.
EnsoData has partnered with the Wisconsin Sleep Clinic, part of UW Health, to do beta testing. Fernandez said he and co-founder Sam Rusk interviewed over 100 clinicians at UW Health and other healthcare organizations in the area, who identified a need for better tools for scoring sleep tests.
Fernandez said EnsoData is planning to do a side-by-side competition with Philips Respironics’s Somnolyzer software, one of the systems currently in use at the Wisconsin Sleep Clinic. Staff there will run the same data through the two systems and look for differences in how accurately the data are scored.
EnsoData’s current focus is sleep apnea, said Fernandez, but the company envisions broader applications for its products.
“Our base algorithm is immediately applicable to detecting heart arrhythmia, predicting congestive heart failure readmissions and using functional magnetic resonance imaging to study schizophrenia,” he said, noting that he and Rusk have already collected data on those conditions.
EnsoData is hoping to raise $300,000 in its seed round, Fernandez said.
Fernandez said he and Rusk, both 23, will need to hire other employees, and devote their own full energies to the company, if it is to go beyond sleep apnea. On top of EnsoData, the two founders have been doing software consulting on the side to make ends meet. Fernandez said he’s also been finishing up a research apprenticeship. After it concludes Aug. 15, he’ll have more time to work on the sleep startup, he said.