By GREGORY ZELLER //
Lightning-round business pitches before an audience of potential investors have become the norm. What impressed Dave Calone on Friday was who was listening.
Calone, president and CEO of Setauket VC firm Jove Equity Partners, was the keynote speaker at the Long Island Capital Alliance’s Healthcare Capital Forum, a startup-meets-financier networker held at Melville’s RXR Corporate Center.
As a cofounder of the Long Island Emerging Technologies Fund, Calone has long enjoyed a front-row view of the Island’s edge-cutting healthcare industries, but even he was struck by the caliber of investors at LICA’s monetary mixer.
“Investors on Long Island understand there are opportunities here, instead of having to go elsewhere to find them,” Calone told Innovate LI. “And it also seems more people in the city are looking at Long Island as a place to make real investments.
“We live next to the financial capital of the world,” he added. “We need some of that capital coming out here.”
Neil Kaufman, LICA chairman and partner at Lake Success law firm Abrams Fensterman, agrees completely. And the strong representation of NYC investors in Friday’s audience, the chairman noted, is “all part of the plan.”
“We have to face reality,” said Kaufman, who chairs his firm’s corporate practice. “There are about a half-dozen venture firms on Long Island. There’s also a lot of wealth on Long Island that can be invested, but a lot of that is deployed through New York City financial mechanisms.
“One thing LICA tries to do is attract the city’s investment community out to Long Island,” he added. “So this is very gratifying for us.”
Following a networking breakfast and opening remarks by Calone – also a 2016 candidate for the 1st Congressional District – the 100-strong audience of NYC and Long Island investors heard roughly 10-minute overviews from five regional companies at various developmental stages, followed by quick Q&A sessions with company principals.
The presenters included Remote Medical Technologies, a Melville startup focused on real-time video communications between pathologists, surgeons and radiologists; Stony Brook-based Theragnostic Technologies, featuring a “next-generation MRI contrast agent” for kidney patients; and Soteria Technologies of Lindenhurst, producers of the world’s first oxygen-generating “personal escape respirator.”
Also presenting: East Northport’s North Harbor Trading Co., which wants to use pressurized water to purify food products, and Christopher Czura, one of the big brains behind the Neural Tourniquet, a bioelectronic device that staunches blood loss through electronic nerve stimulation, based on science from the Northwell Health system’s Feinstein Institute for Medical Research.
Czura and other entrepreneurs took the stage to discuss their products, market analyses, projected financials, licensing and other business plan-related details meant to convince investors they are worth a bet.
Following the presentations and audience questions, Kaufman moderated an investor panel that reviewed the five pitches and shared insights on the state of Long Island’s healthcare industries, along with a from-the-trenches assessment of the regional investment climate.
Kaufman opened the panel portion by saluting panelists Lishan Aklog, chairman and CEO of NYC-based medical device innovator PAVmed Inc. Featured at a 2015 LICA capital forum, the company is now prepping its IPO – “if not a record for a LICA-featured company,” Kaufman noted, “then close.”
Joining Aklog on the panel were David Weild IV, CEO of tech-focused “capital facilitation platform” Weild & Co.; KEC Ventures partner Joshua Lamstein, who doubles as chief executive of advisory and investment firm HCFP; and serial investor Harvey Brofman, a seasoned veteran of healthcare informatics currently running Nine 4-Bit Slices, an investment firm focused on healthcare, analytics, social media and other high-tech markets.
The panel spent time discussing what investors look for in their early-stage opportunities. Brofman noted the importance of solid business planning – “You don’t want to be in a place where the next guy who writes a check makes the rules,” he noted – while Aklog, also a co-managing partner of HCFP, highlighted several funding alternatives for pre-revenue companies.
In addition to government grants, Aklog suggested “strategic investment” opportunities that can fill gaps left by angel investors and traditional venture capitalists, including the rise of the corporate investment division.
“Larger companies are looking at getting in earlier,” he told the audience. “Many corporations will make modest early-stage investments in products they think will ultimately fit into their portfolio.”
Lamstein noted the existence – and importance – of “very clear metrics” that can help fledgling companies, including those that have already commercialized, get to the next funding round.
“A certain repeatability of the business model,” Lamstein said. “Certain revenue thresholds. Monthly recurring-revenue targets that are achievable on the basis of the initial capital going in. Ways of being assured that the money coming from our fund isn’t a bridge to nowhere.”
As for the companies making their cases Friday, the panelists offered sometimes-glowing, sometimes-frank assessments.
Weild noted that while Remote Medical Technologies’ iMedHD2 Teleultrasound System, designed to facilitate live, secure, high-definition video connectivity between physicians, “resonated as something that would actually work in a clinical setting,” he’d have preferred to hear more about the device’s scalability and other technical specs.
Some panelists also frowned on North Harbor Trading Corp.’s plans to set up inside Stony Brook University’s Calverton Business Incubator. North Harbor founder Thomas Kehoe said the firm was in serious talks with Stony Brook about incubator space for its food-purification machines, but Brofman questioned that strategy’s geographic logic.
“Apologies to Stony Brook and the Calverton incubator, but we have issues with trucks on our roads now,” Brofman noted. “I heard that plan, and I was thinking ‘New Jersey or Connecticut.’”
Thoroughly vetting proposals to cherry-pick the better investments is what LICA’s capital forums are all about, noted Carol Lane, the alliance’s executive director. While the LICA board of directors works hard to select only the best proposals and even coaches the entrepreneurs for their moment under the lights, only the investors themselves can judge a particular opportunity’s merits – often, Lane noted, based on input from the investor panel.
“We try to get people from within the industry who can really add something to the experience,” the exec said. “Our job is to support these companies, facilitate relationships and promote growth.”
In the case of the Healthcare Capital Forum, growth seems almost inevitable. Michael Lane (no relation), a member of the LICA board, noted that one of LICA’s primary functions is to stimulate the economy in a way that helps college graduates and retirees remain Long Island residents – and those residents, particularly the aging retirees, will drive new healthcare-sector demand.
“That creates many opportunities for health-related services, not only on the medical side but on the device side,” he said. “And there are a lot of companies popping up to address that.”
That includes his own company, Real Content Media Group of Bethpage, a social media content producer that’s focusing now on pain management, according to its chief operating officer.
“In terms of the Long Island economy,” Lane said, “healthcare is huge.”