To gauge the health of Maryland’s startup environment, look no further than the Technology Development Corp. of Maryland’s (TEDCO) annual Entrepreneur Expo. The annual November event has outgrown its traditional Linthicum venue, necessitating relocation to the Hilton Baltimore in its sixth year to accommodate more than 700 participants and a record 83 exhibitors.
“The Expo has also grown geographically,” said TEDCO President John Wasilisin. “We now have buses of entrepreneurs coming from the rural parts of the state. Some actually came in [the night before], turning it into a multi-day event.”
In TEDCO Board Chair Newt Fowler’s estimation, the principal challenge for the state’s entrepreneurs lies in the battle for talent to feed growth.
“[T]he best way … to take advantage of our potential is to double down on initiatives that support our growing companies and entrepreneurs,” Fowler said. “We have simplified and streamlined our existing [programs] and, equally importantly, are designing new ones to reach communities that we have not reached before.”
According to Wasilisin, a revamped interface structure now sees entrepreneurs initially interacting with TEDCO’s new Deal Team, led by Matt Conwell, rather than figuring out on their own which programs they qualify for.
“We’ve simplified our funding into two types: seed investments and venture investments,” Wasilisin said. “There will be more information announced on this in the near future.”
Panel discussions of trends prime for entrepreneurial opportunity this year touched on food, beverage and agriculture, drones, autonomous technology and virtual reality. Panelists also explored similarities and differences between rural and urban entrepreneurs.
Lee Simms, CEO of the Columbia-based Quevera software company, said his experience with interns indicates that rural areas could soon benefit just as much as urban areas from information technology entrepreneurs.
“We partnered with high schools to show them what can happen,” he said, relating how students from the Dorchester County public schools helped transition the school system’s website to be mobile-enabled, and incorporate applications and other modern features.
“Once they see they can do that [from home], they don’t want to leave … because they’ve become accustomed to the work-life balance they have in these rural areas,” Simms said.
Long a traditional rural business, agriculture appears poised to evolve, or at least expand into new opportunities influenced by changing mindsets regarding locally produced food and food products.
“We do not produce enough food to feed the 16 million mouths in [our] regional foodshed,” said Mike Koch, president of FireFly Farms Creamery & Market, in Garrett County. “As a producer, it gives us a great sense of opportunity, but also a good amount of fear. The idea that we can reclaim some of the industrial farmland and put it to use producing table food is something we should pay attention to.”
Chesapeake Bay oyster farms have also begun reaping the benefits of innovation by employing a new in situ (meaning in its original place) tumbling and sorting process that saves watermen an extra trip to return undersized oysters to their beds.
“The other consequence is, it disrupts the meat inside, which means the smaller oyster is growing fatter and plumper when it’s put back,” said Mike Thielke, executive director of hotDesks, a network of coworking spaces that supports startup businesses in the Eastern Shore region. “I’m sure there’s a lot of data management activity that could be developed in aquaculture as well.”
According to William Bernard, director of rapid prototype Revolution Labs, in Salisbury, a new triploid (non-reproducing) oyster variety developed through genetic engineering now has the potential to provide product during the summer months.
“Those are available now commercially, as well as through research programs, and a lot of seeding is going on for those,” Bernard said.
One of the other unconventional ideas being considered on the Eastern Shore is that of an actual statewide agriculture accelerator, something that’s still in the thought process.
“It would be a hybrid between a physical and a virtual [accelerator], but I don’t think we can succeed by having it only regional,” Bernard said. “It helps cross-pollinate with the urban Corridor, especially if we’re pushing data.”
From drones to driverless cars and even exploration or mining craft, autonomous technology represents the next evolutionary step.
“There have been relatively few technology areas that have truly revolutionized our economy,” said Matt Scassero, director of the University of Maryland Unmanned Aircraft Systems Test Site. “Autonomous technologies have started to do it already.”
Three particular areas — the Internet of Things, autonomous technologies and unmanned systems — will emerge as “real game changers,” Scassero said, “and research is a critical part of that and of economic diversification and centers of economic development. It’s really about taking advantage of efficiencies and capabilities [enabled by this technology].”
According to Dave Weaver, director of Program Development for Oceaneering International, of Hanover, theme parks are already using this technology to move more people through rides quickly.
“We’re anxious to hear from small companies on higher energy density through increased endurance, we’re looking to operate in the ocean for months at a time, the ability for smarts, to be able to [surmount] unanticipated scenarios, assess what’s going on with the vehicle itself and be able to learn in situ,” Weaver said. “The other hurdle we have to get over is acceptance by the various communities it can support.”
High Stakes Momentum
As of May 6, the federal Jumpstart Our Business Startups (JOBS) Act has allowed equity crowdfunding as an option for raising capital.
Julie Davis, senior special counsel in the Office of Small Business Policy in the Security Exchange Commission’s (SEC) division of Corporation Finance, explained that the change came about to allow new exemptions for companies that didn’t want to go through with an Initial Public Offering scenario under existing exemptions.
“Title III created the idea of getting a lot of investors to invest a small amount each,” she said. “Every deal needs to go through an SEC-registered intermediary, which can be a broker-dealer, or a new type of entity called a funding portal.”
Accordingly, a company can raise a maximum of $1 million in 12 months, with limits on the amounts investors can provide and a 48-hour grace period for investors to decide to cancel or commit to the investment.
Within Maryland, Gov. Larry Hogan’s administration recognizes that the state’s economic comeback begins with the technology sector and relies on entrepreneurs, said Lt. Gov. Boyd Rutherford, who spoke during the Expo’s opening ceremony.
Maryland’s economy ranked 49th out of 50 before the last gubernatorial election, Rutherford noted, but now ranks 11th. “We’ve added more than 70,000 new jobs, making 2015 one of the most successful job growth years in 15 years,” he said.
According to keynote speaker Ron Gula, founder of Columbia-based Tenable Network Security, the momentum is widespread and needs to be sustained.
“We’re having a resurgence in incubators and accelerators,” Gula said. “We need 10 more, 20 more incubators, we need more people to stand up and say, ‘We want to do innovation.’ The stakes are really high.”