University initiative aims to support alumni entrepreneurs
Carnegie Mellon has been offering students and alumni an opportunity to start their own businesses since June 2012 with support from the Open Field Entrepreneur’s Fund (OFEF).
This fund awards money and resources to Carnegie Mellon alumni who graduated within the past five years.
David Mawhinney, an assistant teaching professor of entrepreneurship at the Tepper School of Business, serves as managing director of the fund.
“The fund was made possible by a gift from a gentleman, Jonathan Kaplan,” Mawhinney said, “who created the Flip Video camera and later sold it to Cisco Systems.
His wife, Marci Glazer, also helped found the fund. It’s a fund for young alumni from zero to five years of graduation to make their own jobs and follow their dreams.”
The OFEF is part of the “Greenlighting Startups” initiative at Carnegie Mellon, which aims to promote and translate ideas and creations from labs to the market. Last year, the fund awarded a total of $300,000 to six different startup companies, each receiving $50,000.
There is a comprehensive application process to select companies. “If you meet your eligibility requirements, you are asked to make a pitch. But you have to be serious to convince another investor to commit $50,000,” Mawhinney said.
One company that received funding from the OFEF is PECA Labs, which focuses on rare cardiovascular and pediatric conditions. Doug Bernstein (CIT ’12), a Carnegie Mellon alumnus who double majored in mechanical engineering and biomedical engineering, is the founder and CEO of PECA Labs. Bernstein feels that children with certain heart conditions often have insufficient products used in their heart procedures.
“Intra-operative conduits had to be developed from scratch by the doctor in the operating room for 30 minutes,” Bernstein said. In response to this issue, the company created the Masa Valve, described on PECA’s website as “a synthetic valve conduit for pediatric RVOT (right ventricle outflow tract) reconstruction.” The product would be a quicker, simpler solution that doctors could use on patients during heart surgeries.
The company is still in the process of getting regulatory approval for selling its product, but according to Bernstein, it will be an excellent option for parents and their children. Only a small market of individuals are affected by this issue, so no other companies have come up with more affordable options because of the $70-million fee attached to bringing the device to market. Bernstein hopes to bring this fee down to less than $750,000.
StatEasy, another company supported by the OFEF, takes videos and statistics from sports teams and creates a simple system that can be used by coaches, players, and families to view them. Chief operating officer Tom Matta (TSB ’07) explains, “We’re turning media into a new platform … on an iPad instead of paper.” After every game, the company hopes to provide every player with his or her own highlights. StatEasy is being used by 200 sports teams, including those in the Navy and at Pennsylvania State University. However, “The future of our media products is with high school athletic leagues,” Bernstein said.
Tunessence, a company created by alumni Alex Soto (CIT ’11) and Matthew Bauch (CIT ’12), aspires to be an engaging online guitar teacher. “The ultimate goal is to be the Rosetta Stone of music by combining music technology with teaching,” Soto said.
On the website, individuals are given access to audio processing software and instructional videos. Tunessence’s software then provides individuals with note-by-note feedback, tracks progress and personalizes lessons. “So we use software to do what private teachers would do,” Soto said.
The OFEF also invested $50,000 in Aurochs Brewing Company. Ryan Bove (TSB ’12) said that he and his business partner, Doug Foster, have had to be on a gluten-free diet on a daily basis for medical reasons; soon, he explained, “We [will] make a gluten-free beer.”
Aurochs Brewing, according to Bove, is commercializing a specific brew using millet, quinoahops, and amaranth. “Most beers,” he said, “use barley and wheat, and sometimes have corn and rice.” Aurochs Brewing has a brewery in Emsworth, Pa., about 10–15 minutes from Pittsburgh. The company expects to have a federal and state process complete in “the next couple weeks or so,” and plans on launching in late spring 2013.
It currently has one brew flavor, and two others will be unveiled during the spring and summer.
Scott Sykora (CFA ’12) co-founded Pixite.
“We make photography apps for the iPhone and iPad. Our most popular apps give users access to their photo libraries in Picasa Web Albums, Facebook, and Flickr on their iPad and iPhones,” Sykora said.
These apps are meant to make popular services more useful and “essentially replace the browser interface they would normally need to go through.” For example, Sykora mentioned that his company’s most recent app, Unbound, provides this service for Dropbox.
The fund does not favor innovation in any specific field; the six selected companies from last year focused on a variety of fields. Mawhinney also notes that in the past year, the fund has supported and invested in 16 different companies throughout the U.S.
While providing financial contributions to startup companies is its primary focus, the fund also provides perks for current students, including an invitation to go to a yearly OFEF personalized mentorship program. Startups are assigned at least one mentor.
These six companies utilized the financial support provided to them by the fund. “Being able to say CMU made a $50,000 investment in us is a big deal,” Bernstein said.
“Carnegie Mellon in general has done a lot to provide us with help and having that Carnegie Mellon name behind us is a big deal,” Matta said. “We’ve since raised $250,000, and as a humanitarian company, it’s a big deal for us.”
“It’s great to be acknowledged as a Carnegie Mellon product,” Soto said.
Regarding the aid received from the fund, Soto added, “It’s been super helpful. We’ve hired [a] bunch of people. It allows us to go from prototype to a working product, and to raise more capital from a proven product.”
Sykora also spoke glowingly of the fund, saying, “We’ve been growing as a company and are looking into what our next steps could be. One thing we’re starting to explore is becoming more of a web service company instead of just creating stand-alone apps. The OFEF sponsorship is really helping us move toward that. It’s letting us grow faster than we would have without it.”
Additionally, the companies also appreciate the mentorship aspect of the OFEF sponsorship.
“We’re also hoping to gain a strong set of advisers and connections through the OFEF and CMU Alumni network,” Sykora said.
Bernstein appreciates having his designated adviser, Craig Markovitz. “We’re a young company with young entrepreneurs,” he said. “There’s a lot of passion, but not experience, so having a mentor is great.”
Bove also had similar views. “The money is very helpful, but what’s really important is the mentorship and having people such as Dave giving advice and helping us troubleshoot problems before they even become problems,” said Bove of Mawhinney.
Every year there will be two cycles in which the fund selects startup companies — once in May and once in December.
The deadline for the most recent cycle was on March 1, but graduates will be able to apply again in the fall.
Information on the Open Field Entrepreneur’s Fund can be found at http://www.cmu.edu/open-field/.