The InvestMaryland Challenge came to its official close Monday night when three winners in three separate categories were announced.
- General Industry: i-Lighting produces LED lighting kids for indoor and outdoor use and is based in Cecil County. (This category was the only one open to entry by startups nationwide.)
- Life Sciences: GrayBug LLC develops drug delivery tech for treating macular degeneration, a leading cause of vision loss in Americans over 60 years. Its laboratory is based in the Johns Hopkins School of Medicine in Baltimore city.
- Information Technology: Red Owl Analytics, which carries out “behavioral intelligence” and analytics for large corporations and is based in the Federal Hill neighborhood of Baltimore city.
As Technically Baltimore has reported, the challenge was the inaugural, early-stage business competition put on by Maryland’s Department of Business and Economic Development [DBED]. From 259 applicants, a panel of more than 60 judges winnowed the field to nine finalists. Each of the three winners received $100,000 grants from DBED dispensed by the Maryland Venture Fund, in addition to two round-trip tickets through Spirit Airlines and legal services provided by Whiteford, Taylor & Preston law firm in downtown Baltimore.
Finalists also received prizes and money. Read MDBizNews for the full breakdown.
Governor Martin O’Malley was on hand to present the awards Monday night at the Brown Center at the Maryland Institute College of Art.
“I’m an entrepreneur trapped in a public servant’s body,” he told the couple-hundred-strong crowd present, just before thanking them for suspending their “cynicism of everything the government does” to take part in the challenge.
What O’Malley was referring to was the $84 million InvestMaryland fund, signed into law in 2011 and raised in spring 2012 through the sale of insurance tax credits. Money from the fund is intended for early-stage startups, and is divvied up for investment by three groups:
- Venture capital firms receive 67 percent.
- The Maryland Venture Fund, the “state-funded and early-stage equity fund within DBED,” receives 24.75 percent, which is then invested into emerging companies in the state.
- And 8.25 percent goes toward the Equity Participation Investment Program, “designed to expand business ownership by socially or economically disadvantaged entrepreneurs.”
- Regarding the InvestMaryland Challenge: funding came directly from the InvestMaryland fund. And, had an out-of-state company won the General Industry category, that company would’ve had to have spent at least 51 percent of the $100,000 grant within the state.
Watch a video of some of the challenge judges talking about the competition:
As O’Malley likes to cite at tech-related events — he did during the challenge awards ceremony — Maryland was ranked number one in innovation and entrepreneurship by the U.S. Chamber of Commerce in 2012. “Where we fall down,” he said Monday evening, “is on the commercialization, and getting [business] ideas to grow with venture capital.”
That’s the big bet the state’s taking with the InvestMaryland program: can Maryland government invest successfully in early-stage companies here, and then derive benefits in the forms of job creation and economic growth later on?
The state itself says the Maryland Venture Fund, established in 1995, “has seen returns of about $64 million and helped created 2,000 jobs.”
“What we basically saw was a great opportunity to help startup companies,” Michelle Jackson told Technically Baltimore in March. Until February, Jackson was the full-time program director for strategic industries and innovation within DBED, and instrumental in getting the InvestMaryland Challenge off the ground. (After leaving DBED, she stayed on as a special projects contractor to see the challenge through.)
To even enter the challenge, each of the 259 applicants had to submit a business profile and executive summary, which was scored along the following criteria:
- Innovation uniqueness
- Value to customer
- Is it mission critical?
- Deployability [scaling, in other words]
- Is it a technology to watch?
- Go-to-market strategy
- Capitalization and team
The 71 companies that advanced to round two then had to submit a full business plan, said Jackson.
When Technically Baltimore spoke with Jackson in March, she said there were no concrete plans to conduct a second InvestMaryland Challenge for 2014.
But O’Malley seems keen to the idea, saying Monday: “We want to do this again next year.”
Watch Governor O’Malley unveil the state’s Central Business Licensing platform in January: