Entrepreneurs look for connections at North Bay Innovation Week

Hemotek CEO Patrick J. Rousche points to three concrete benefits of housing his 2-year-old startup at the SoCo Nexus business incubator in Rohnert Park: Through it he found his web designer, computer networking consultant and intellectual property attorney.

Rousche, whose company is trying to make a safer needle for patients using dialysis treatments, said being a successful entrepreneur requires reaching out to find partners, investors, mentors and support companies, as well as those who can offer a good tip or an understanding ear.

“You can’t be in this business if you think you know everything,” said Rousche, a former associate professor of bioengineering at the University of Illinois, Chicago. At SoCo Nexus, he said he’s found a community, which is preferable to working out of his garage “where you really do feel on your own.”

Entrepreneurs say they need connections and collaboration like fire needs oxygen. To help them, a collection of business incubators, co-working space operators, educators and investors are banding together this week to produce the first North Bay Innovation Week.

The events, which begin Monday, will provide opportunities in three counties to learn about new financing options, rub shoulders with potential investors or hear startup CEOs like Rousche pitch their products and business models. Hemotek and 11 other companies will be vying for the title of Top Innovator and a $5,000 prize at Friday morning’s Innovation Summit at SoCo Nexus.

The week’s aim is twofold: To help entrepreneurs and to begin building a stronger support network for startup companies across Sonoma, Napa and Marin counties.

“That creates jobs and that creates revenues,” said Steve Palladino, the new chairman of the North Bay iHub, the week’s organizer. “And that’s why this matters.”

The regional efforts to help entrepreneurs often remain under the radar, especially compared to the assistance available in San Francisco and Silicon Valley.

Those involved in Innovation Week vary when describing how fledgling the local efforts remain. But they repeatedly said the three-county region has the potential to build a robust “ecosystem” that would make it easier for startup companies with good ideas to succeed.

“I would hope the North Bay would get on the map,” said Lindsay Austin, chairman of the Sonoma Mountain Business Cluster, the group responsible for both iHub and SoCo Nexus.

Events like Innovation Week can help entrepreneurs see that in the North Bay, “you can grow your company and live in a nice place,” he said.

The business cluster began in 2007 at Rohnert Park’s Sonoma Mountain Village with an ambitious goal of creating 2,000 high-tech and environment-friendly jobs in 10 years. With aid from property owner Codding Enterprises and the city of Rohnert Park, the organization opened a business incubator, now known as SoCo Nexus. In 2010, the business cluster won a state designation to oversee an Innovation Hub, or iHub, and foster job creation in the region.

Over five years, the efforts by business incubators, a local “angels” investing group and the region’s Small Business Development Center raised $38 million for nearly 50 new companies in Sonoma, Napa and Marin counties, according to a 2013 iHub report. In that period, the 10 “most outstanding” new companies created 81 jobs.

In the early days, the business cluster set the bar high, saying it wanted to help those startups that could reach $25 million in revenue in five years, Austin said. The group now assists smaller companies.

Still, one thing that sets the startups apart from a typical new restaurant or retail business is the potential for tremendous growth. Another distinction is the need of startups to go outside the traditional avenues for business lending.

“They’re hard for banks to quantify the value,” explained Ben Stone, executive director of the Sonoma County Economic Development Board.

But new types of financing have arisen. At a Friday session at Napa Valley College, participants will learn about microlending and crowdsourcing options. Among the models presented will be Credibles, a San Francisco-based company that allows consumers to prepay for their favorite foods, helping startup food makers by accelerating cash flow. Whole Foods is letting customers use their Credibles “credits” like a gift card, and the startups sweeten the deals with rewards.

Three of the panel’s lenders have said they want to help businesses that suffered in last month’s Napa earthquake, said Charlie Monahan, who coordinates the college’s Business and Entrepreneurship Center.

As a result of such collaboration, he said, “it’s a great time for” Innovation Week.

Another financing option, the “accredited investor,” will take center stage on Friday afternoon in Rohnert Park. To attend the invitation-only North Bay Investment Summit, an investor essentially must have income of at least $200,000 a year or a net worth of at least $1 million, excluding his or her primary residence.

The investment summit is sponsored by North Bay Angels, an investor group that has helped finance 35 North Bay companies since its founding in 1998. Friday’s event will bring together nine angel groups from around Northern California to hear presentations from eight companies seeking capital.

Of note, none of this year’s presentations will come from a North Bay company. Last year two of the companies came from this region, said Che Voigt, board chair of the local angel group.

The aim of the investment summit, he said, is partly to build a stronger network among the angel groups so they can work together to invest in companies that require larger amounts of capital.

Ultimately, Voigt said, “that will help our North Bay companies, and it will help our investors.”

For this year’s investment summit, North Bay Angels selected as its nominee Dropcountr, a Redwood City startup with a mobile app program that allows consumers to track their daily residential water use. Dropcountr CEO Robb Barnitt said the summit provides the opportunity to hear from and build relationships with investors who have considerable business acumen.

“In many cases, angels have sort of walked this road already,” Barnitt said. “Not only do they have capital to offer, but they also have really good experience to offer.”

Such interactions are key to advancing a new business.

Without reaching out to investors, mentors and other entrepreneurs, “it’s never going to happen,” said Neal Flowers, CEO of Petaluma-based goPanache, a booking app for hairstylists and other beauty professionals. Prepare to step out of your comfort zone, he said, because “you’re going to be challenged more than you’ve ever been challenged when you do your startup.”

Innovation Week sponsors said they can help by providing entrepreneurs more opportunities to gather and more places to turn for help. Startup founders will benefit “the more we can organize,” said Natasha Juliana, an owner and founder at the co-working space Work Petaluma.

At Venture Greenhouse, a San Rafael-based “business accelerator,” 11 companies are spending a year in a new program receiving intensive support in building their businesses. Among the participants is David Kunhardt, CEO of San Rafael-based SolEd Benefit Corp., which seeks to reduce the cost of solar power for schools and governments. The year-long program already has provided “some very good mentors” and the chance to meet weekly with other startup founders.

“There’s some interesting companies with good ideas and good approaches, and some of that is rubbing off on us,” Kunhardt said.

Venture Greenhouse Executive Director Paul Bozzo expressed the optimism of many about the potential to do more to help such startups.

“We just need a little bit of spark to bring the innovation and the talent to the North Bay,” Bozzo said. “We already have it. We just need more of it.”

Hemotek’s Rousche says he and his partners are looking for every opportunity they can uncover. The company this year received $220,000 from a federal small business innovation research grant. With the funds, the company hopes to show that its invention can better protect patients from bleeding to death when needles accidentally pull out during dialysis sessions.

But Rousche said he also needs to keep rubbing shoulders with fellow entrepreneurs at SoCo Nexus and with others who can help him at gatherings like the Innovation Week events.

He plans to join the conversations “and see where it leads me.”

You can reach Staff Writer Robert Digitale at 521-5285 or On Twitter @rdigit

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