When last we Debriefed Mark Lesko, the former assistant U.S. attorney and Brookhaven Town supervisor had just left his post as executive director of Accelerate Long Island (sorta) and taken the reins of Hofstra’s entrepreneurship efforts. He never really left Accelerate, however, and with the program morphing into the Accelerate NY Seed Fund and expanding its mandate to support startups in other downstate regions – and with eight months at Hofstra under his belt – Lesko is more optimistic than ever about the Island’s innovation economy. His words:
ACCELERATING: The announcement of the Accelerate NY Seed Fund reflects the fact that our decision to focus on providing early-stage funding for technology-based companies has been validated. We proved it out with the first program, which was very much a pilot program, and it really makes sense to scale it.
BIGGER, BETTER: We provided grants and Topspin Fund and Jove Equity Partners provided investments in 10 companies that are all doing really well. I think the state was impressed by that model. The new program gives us more access to larger amounts of funding, which is particularly important in the space we invest in.
HARD FACTS: We like to use the word “hard” to describe the technologies we invest in. Biotech, clean energy, enterprise IT, which includes cybersecurity and data analytics … this is the really hard stuff, the advanced materials, the nanotechnologies, the tough stuff.
ONLY THE BOLD: Frankly, these are areas where even early-stage investors aren’t particularly comfortable. Say a researcher has developed a cutting-edge drug that treats pancreatic cancer and we seed-fund a company that spins that technology out. It’s going to take 10 years minimum to get to the point where that technology is even ready for the marketplace, and ultimately it will take tens of millions of dollars to commercialize it. If you’re thinking about putting in a couple hundred grand at the outset, that’s daunting.
NOBODY’S FOOLS: We like this space. We think there’s opportunity there. Our venture partners are very intelligent and incredibly talented, and they thrive on investing in companies where the technologies are really complicated. Topspin founder Leo Guthart is a PhD. Topspin CIO Steve Winick is a patent lawyer and an engineer. Jove CEO David Calone is a Harvard lawyer. They know what they’re doing.
THE LONG HAUL: It’s really about setting expectations. There are a lot of investors who invest in biotech and clean energy, and they understand that the time horizons in these industries are different than, say, the time horizon for developing an app. So it’s about finding the right investors.
CROWDED HOUSE: We do expect that we’re going to add other investment partners as we move along. We’ll be making announcements in the future, and we have talked with a number of investors at the angel stage and at the seed stage who are interested in working with us, but we’re not prepared to announce anything yet.
SEAL OF APPROVAL: Where we add value to the larger ecosystem is the work we put in conducting due diligence. If we decide to invest in a company, to a degree it validates that the company or the technology has some real commercialization potential. That can instill confidence in investors that a company isn’t just flying blind with a technology it doesn’t understand, and hopefully that will help loosen up more early-stage capital.
BACK TO SCHOOL: Hofstra has been amazingly fun. Frankly, it has exceeded even my wildest expectations. The amount of interest among the students on campus in entrepreneurship is incredible – and we’re talking about real entrepreneurship, students who are starting real companies. We had 56 companies in the CPXi Venture Challenge this spring and 17 finalists, and many of them are busy working in our incubator developing their ideas, even during exams, which is amazing to me.
MIND THE GAP: One gap in the Long Island ecosystem, and I think it’s true in the city as well, is a general lack of business talent. I always thought Hofstra was a sleeping giant in the sense that it has a very well-regarded business school, and that hypothesis is playing out very well. The business talent on this campus is at a very high level, and not just in the business school. I think we’ve awakened the sleeping giant, and I think that’s ultimately going to pay dividends for the entire region.
COMING UP NEXT: I’m optimistic about the regional economy, and a few recent developments have really bolstered my sense of optimism. One is that there’s capital available for early-stage companies, even on the pre-company research level. The NIH-funded REACH program administered by Stony Brook University provides grant funding for entrepreneurial researchers, and now with the Accelerate NY Seed Fund you have money to fund the next step. If you look at the whole spectrum, the challenge now is to develop a robust community of angel funders. Post seed-funding, pre-venture funding – that’s the stage we need to focus on next.
CULTURE CLUB: You really have to take a long view here. Anybody who has worked to develop entrepreneurial ecosystems in other parts of the country will tell you it’s a 10-to-20-year effort. We’re really only in year three or four of the process. To now, it’s been about planting a lot of seeds. You have co-working spaces cropping up all over Long Island and you have all the major institutions – Stony Brook and Brookhaven National Lab and Cold Spring Harbor and the Feinstein Institute – all focusing on entrepreneurship. The groundwork has been laid. Now we’re entering the cultivation stage, and it’s important that we wrap ourselves around that growing list of startups and help them grow.
Interview by Gregory Zeller