Frequently Asked Questions
What is a startup studio?
Dianna Lesage: "Startup Studios transform unique ideas into strong independent companies. These entities don’t run programs as accelerators do and they don’t have cohorts like incubators do. The secret sauce of a Startup Studio (also called a Venture Builder or a Startup Factory) is the way they work on startup ideas. The industry term for this is “operational model” but there is no reason to use vague language to make things complicated. They do this by finding or developing great ideas, using technology and funding to build MVPs, and going through the process of validating these MVPs in the real world. If all goes well, the Studio “spins off” the new venture- meaning the Studio recognizes this new company they’ve developed could be huge and now they need to find some people to run it as an independent startup venture. Once they’ve recruited a team to come run the startup, the Studio team (who built the startup from scratch) hands off the venture to the new team and gets back to work on the next great startup idea.The Startup Studio model is very different from accelerators, incubators, and other innovation programs. Instead of using financial and physical resources to help entrepreneurs accelerate ideas, a Startup Studio uses its own internal team to do it."
Why is MDC a startup studio?
MDC uses the studio model to enable inventors to bring their ideas to us at the earliest stage, sometimes on a napkin (really!). We work with the inventor to clarify his or her idea and to assess its value for patient care, its potential in the marketplace, the challenges to creating a working model, funding the development, assessing the regulatory pathway, etc. If the idea passes the screening process, MDC will form a company with the inventor and will actively help to get early stage funding, generally from federal or state government grants. We support the companies in raising capital from investors, generally angel investors. The company becomes a client company and MDC takes an equity position in the company.
What does MDC do for its client companies?
This depends on the level of development of the company. For an inventor who just has an idea, MDC will help the inventor assess the potential of the idea: Will it impact healthcare? Can it be built? Who would buy it? How big is the market? How can the development be funded? By who? Will FDA clearance be required to market the technology? How long will this take? How much will it cost? Is the inventor committed to the project? This is a key factor in the decision to accept a new technology into the program. MDC partners with inventors to develop their idea.
If the screening process indicates a likelihood of success, MDC will negotiate with the inventor to setup a company and to seek funding to develop the idea. MDC will talk with investors and will help the inventor identify funding opportunities and will help write proposals to win funding. MDC companies have won about $13M in contract and grant funding, including 5 Phase I SBIR grants from the National Science Foundation ("America's Seed Fund" really!). Altogether, MDC has helped its client companies raise over $15,000,000 in contracts, grants and investments.
MDC will "loan" employees to the company as needed to make progress. Sometimes MDC employees become part of the permanent staff of the new company. We provide space at little or no cost to companies created in the Studio. We are patient, and will help the Company "pivot" to a more promising direction. Where appropriate, we support the Company in programs like I-Corps, providing the required PI, entrepreneurial lead, and/or mentors.
For companies that are already formed, MDC provides space at a modest cost, back office services such as payroll, benefits management, and tax preparation. But most importantly, MDC provides engineering and business development support from experienced developers and mentors, and an enviroment including other new companies that share information and problem solving techniques.
See the page For Entrepreneurs for more information.
How many companies has MDC worked with?
MDC is working with 13 companies, 12 of which are resident in the MDC offices.
We have screened dozens of technologies and met with many, many talented inventors and entrepreneurs. We are always in active discussions with entrepreneurs and inventors. Maryland is rich in ideas and innovation, perhaps the richest untapped innovation hub in the country.
Is MDC accepting new companies?
We are always interested in meeting inventors and learning about their ideas. Contact us to set up a call or meeting. See the page For Entrepreneurs for more information.
How can I invest in MDC companies?
One way is to invest in the MDC-Verte Impact Fund. This fund invests in MDC client companies and other MedTech companies located in Opportunity Zones. This conveys certain tax advantages, such as the deferral of capital gains taxes.
The second way is to invest directly in the client companies. To date MDC clients have received about $3M in angel investments from a variety of persons. All members of the MDC Studio portfolio are interested in talking to investors. Both Next Step Robotics and Relavo are raising Series A rounds ($2-5M). Sonosa Medical, Surgical Vision Systems, Pneumico, and Neurosonics are raising seed rounds (~$1-2M). Other members of the portfolio are at an earlier stage of development and would benefit from investments in the $100-500K range. Visit the Investment Page for a listing of the companies and their opportunities for investment.