George Davis is known for his investing skills, as well as building and managing biotech, information technology and software companies, often from the startup stage, is the new CEO of the Maryland Technology Development Corp. (TEDCO). He joins the organization after most recently serving as a partner in Gamma3, a Maryland-based investment platform, which provides early-stage financing to locally-based startups.
Under Davis’s guidance, Gamma3 invested in several Maryland-based portfolio companies that cover a broad spectrum of life science and cybersecurity opportunities. He also served as the CEO of one of Gamma3’s portfolio companies, Gemstone Biotherapeutics, which develops evidenced-based wound care solutions.
With more than 30 years of management experience, and having served in various C-level positions, Davis offers a range of experience and business acumen. During his career, he has helped secure more than $1.5 billion in capital for several technology sector companies, including leading several public offerings.
From 1996 to 2003, he served as the president and vice chairman of Aether Systems, where he significantly grew the company and led its public offering; in 2006, he became CEO of Avatech Solutions, where he led the merger of the company with Rand Worldwide in 2010 and doubled the size of the business.
Previously, Davis was a director of enterprise management systems at Westinghouse Electric Corp., now Northrop Grumman Corp. Davis received a B.S. in Business and Economics form Bethany College where he currently serves as a trustee emeritus.
What attracted you to this job?
Throughout my career and specifically during the past several years, I’ve been fortunate to be involved in early stage ventures, on the investor side and the operations sides. This gives me a unique perspective on early-stage companies and affords me the ability to help entrepreneurs as they grow.
I’ve found that I enjoy working with young entrepreneurs and helping to turn their ideas into reality, because the ideas can lead to such extraordinary things. When I became aware of the opportunity at TEDCO, an organization whose mission is to help entrepreneurs, I thought that it was a perfect fit. Its platform provides the opportunity for me to leverage and share my experience and passion with the entire Maryland innovation ecosystem.
What is TEDCO’s financial state at present?
I have taken a quick glance at the finances. John Wasilisin, TEDCO’s president and chief operating officer, has been rock solid running the operation. Our annual budget is about $19 million, and that appropriation has remained consistent during the past several years.
We will be receiving $1 million for a Gap Investment Fund from Gov. [Larry] Hogan and the legislature that we will be working into our budget. TEDCO has also received more than $5 million in federal funds during the past several years. These funds have all been used to grow small businesses through programs like the N-Step program, which supports the efforts of post-docs starting companies out of the National Institute of Standards and Technology (NIST); and the mdPACE program, which helps medical device companies more efficiently navigate the 510(k) regulatory pathway of the Food and Drug Administration (FDA).
And around the end of 2015, TEDCO took over the Maryland Venture Fund, which broadened our offerings. With more than $100 million under management, this fund gave us the ability to make later-stage investments. Through its various programs, TEDCO can now offer funding from proof-of-concept to Series A stage investments. That’s a real value add to TEDCO and to the state.
What will we see new from TEDCO in the next year?
I want to take what TEDCO is doing and simply do it bigger and better, thus expanding our footprint utilizing current and new support tools. We need to be there for businesses, even if we don’t give them money. We want to find winners and propel them to greater things. Nothing spurs new jobs and economic growth like new businesses.
We also want — and this is important — to hone our focus on minority and women-owned businesses. We have to find ways to better engage and support these communities. TEDCO has recently made strides in the African-American community in response to a number of focus groups. One outcome of these discussions was the Minority Business Pre-Seed Fund. This program, in partnership with Harbor Bank, is addressing one of the critical needs identified in the focus groups. The program just launched and had an overwhelming response.
How many companies have been advanced with help from TEDCO in the last year?
It is difficult to put a number on all of the companies that are advanced by TEDCO. We help companies in many ways — like through the informal mentoring that our staff provides, the formal funding and entrepreneurial support programs that we offer, to the various events that we host and support throughout the Maryland entrepreneurial ecosystem. It is easier to describe the impact of some of our funding programs.
For example, TEDCO allocated $6.5 million in fiscal 2017 for its seed investment programs, which supported more than 60 companies and helped them advance the commercialization of their products. In addition, the Maryland Stem Cell Research Fund made 29 investments totaling more than $8.5 million for research, product development and clinical trials; $2.7 million of this fund was allocated to six businesses. The remaining funds were directed to developing stem cell technologies that show promise for future products and treatments for patients.
The Maryland Venture Fund made 17 investments totaling more than $9 million in 13 companies in fiscal 2017. And this just describes some of our programs.
What do you see as TEDCO’s greatest challenge?
The greatest challenge is finding the resources to support the overwhelming needs of the innovation community. I meet people every day who are excited about their ideas, but they know that their ideas don’t mean anything unless they have the resources needed to be successful, whether those resources are cash, mentoring, market analysis or something else.
So, our challenge is to scale up the resources that we can provide to meet the insatiable needs of the entrepreneurs in our region.
What do you see as TEDCO’s greatest asset?
Its people. The TEDCO staff is passionate about supporting entrepreneurs, and John has done a wonderful job during the past years recruiting personnel and fostering a good culture within the organization. Because of their passion, the staff is open to new ideas and willing to be guided to greater things. So, we’ll set the bar higher and look to hit it.
I love the quote, “Culture eats strategy for breakfast,” because it’s true. We have a strong organizational culture and a solid reputation for delivering quality support to the entrepreneurial community, which has been developed over almost two decades.
In a Q&A with The Business Monthly in March 2015, Norm Augustine [who chaired the Maryland Economic Development and Business Climate Commission, commonly known as the Augustine Commission] said, “Today, 72% of all of the nation’s venture capital goes to three states: California, Massachusetts and Texas. Too often, people get ideas for businesses here in Maryland but go to another state to start a company. We have to change that.” How can we?
Investors will go where they can find good deals to make money for their limited partners. To bring more venture capital money to Maryland, we need to do two things: First, we need to create more deals that are appealing to investors. As we work to raise the bar on the quality of the companies that exist in Maryland, more investors will take notice. Second, we need to talk about our successes. The dirty little secret about investing in the three states that you mention is that deals are competitive and often overvalued.
We need to show investors across the nation that Maryland has a lot of promising investment opportunities, many supported by TEDCO, with good valuations from the investor’s perspective. This effort needs to be promoted by all organizations in the state, including the Governor’s Office, the Department of Commerce, the press and industry. Maryland is an undiscovered territory with a wealth of opportunity; we just need investors across the country to recognize that.
What can be done to expedite the process of technology transfer?
Technology transfer in Maryland has had a challenging history. I can’t identify any other region in the country that commands the level of research that flows on a yearly basis through our state. And while the discovery of new and excit
ing technologies in life science and various information technologies is of the highest pedigree, the track record and pace of commercialization remains behind other similar ecosystems. We need to work with all the relevant constituencies, including the research institutions, the private sector and all of the state and private support agencies, to find common ground, break down old barriers and help move technology transfer to the level we can all be proud of. I have engaged in the process, and I can tell you that it is complicated.
The way to expedite the improvement process is through education and relationship building. I am seeing, in real-time, many promising changes in Maryland’s universities. The technology transfer offices are becoming more entrepreneurial, developing incubator programs and funding programs to support their startups. TEDCO is also doing its part through the Maryland Innovation Initiative program, which provides funding to support technology transfer activities.
What is your take on the recent merger that’s resulted in the new Maryland Technology Council?
I have never been an intimate member of the prior organizations, but I was so happy that they merged. This is a case where the whole is greater than the sum of its parts. The new organization brings more industry together to better share resources and to stand with a stronger voice.
That being said, I believe that the smaller regional groups are still valuable, too. They connect to the bigger organizations, especially those in the rural areas of the state.
What needs to be done to heighten Maryland’s national and international profile to peak efficiency?
We need to promote our success stories and better talk about the various resources that we have in our state that led to those successes. I think that we also need to make better connections between the innovative companies that are forming around technologies created in our state and funded by organizations like TEDCO and others in the region, and the large national and international companies that need innovation to be competitive in today’s world markets.
In short, we have to build an avenue to connect everyone involved in the ecosystems, and then try to work everyone into a common culture. We all desire the same outcome. Now, we need to put it in a bucket and get it done.