Sprawling, leafy Chester County may not come to mind first when you think “tech hub,” but a startup-boosting group based there is counting recent wins as steps toward that designation.
Chester County Economy Development Council (CCEDC) is celebrating the milestone of reaching $253 million of financial resources directed at client companies of its Ideas x Innovation Network (i2n). The nearly quarter-billion dollars consists of private capital, grants and tax credits from state and federal taxes. CCEDC VP of Innovation and Marketing Patrick Hayakawa called the funding an indicator of economic success in the area.
i2n serves early-stage tech and life science companies, the growth of which leads to downstream economic impact, Hayakawa told Technical.ly. The cornerstone of i2n is its Keystone Innovation Zone tax credit program, but in addition to financial resources, founders can also receive pitch coaching and access to a peer group of other founders.
“They can get mentorship and guidance from other experienced companies so they don’t feel like they are going it alone,” he said. “It’s about a lot of different components coming together.”
Hayakawa said helping startups get through their first three to five years and establish themselves as viable enterprises is a top priority, and reaching the $250-plus million mark validates his organization’s mode of professional development and the value of working with first-time founders. Working with more experienced entrepreneurs who have exited companies can be rewarding, too, but he believes that more can be done by supporting new founders whose growth can be tracked in a smaller window of time.
Moreover, it’s a way for him to better connect with founders of underrepresented backgrounds, as they tend to benefit more from the social capital that CCEDC can offer with its Entrepreneurs Roundtable peer group.
“People often think it’s capital or money [that’s most important] for early-stage companies,” he said. “There’s an element of that but what is equally important is social capital. … We started the Entrepreneurs Roundtable where first-time founders can build social ties where founders can call each other when they hit a wall.”
One success story from i2n programming is that of SOLUtion Medical, which makes a patient-friendly drug delivery system for reconstitutable drugs. The startup closed an oversubscribed seed round at $860,000 and has made executive-level hires in recent months. SOLUtion is now working on product testing ahead of submission for FDA approval.
“i2n was a great resource for fundraising, brainstorming, as well as partnerships and meeting other entrepreneurs in our space,” founder Julia Anthony said in a statement. “Our pitch to the i2n board resulted in a relationship with a crucial contact in big pharma.”
After the $253 million in funding was counted, Hayakawa tracked how it was being spent to better understand how those millions would connect back to the Chester economy. He found that companies in the area are already using some of the funding raised to sign leases for office spaces or buying buildings in the county.
Looking ahead, Hayakawa believes that the funding will assist with local job creation. The area has a history of supporting anchor institutions like Malvern’s Vanguard that hire a large number of technologists. For companies raising for the first time, external funding support can help them to go expand their teams.
“Startups can say, ‘I can go from my garage to a coworking space to three or four employees,'” he said.
Michael Butler is a 2020-2022 corps member for Report for America, an initiative of The Groundtruth Project that pairs young journalists with local newsrooms. This position is supported by the Lenfest Institute for Journalism.-30-