Five local technology startup companies are getting a total of $500,000 in long-anticipated funding from Accelerate Long Island and the Long Island Emerging Technology Fund, the two organizations announced Thursday.
The investments come nearly two years after the formal start of Accelerate, which was created to promote the growth of high-tech companies across Long Island as an effort to revitalize its economy.
One aspect of Accelerate's mission is providing seed funding for startups in partnership with the Emerging Technology Fund, which is made up of investment firms Topspin Partners in Roslyn and Jove Equity Partners in East Setauket. Accelerate had originally anticipated making its initial investments in 2013.
In first wave of support
The five funded companies are Goddard Labs in Calverton, Green Sulfcrete in Melville, SynchroPET in East Yaphank, and PolyNova and Traverse Biosciences, both in Stony Brook. Each company will receive $100,000, including $50,000 from the Emerging Technology Fund, matched by another $50,000 from Accelerate. The Accelerate money comes from a pot of $500,000 the organization received from Empire State Development Corp. to grant to growth-stage companies.
"This is the first wave of trying to help accomplish what we set out to do, which is lay the foundations for developing the innovation economy," Accelerate executive director Mark Lesko said. "You do that company by company."
The startups will use the funds to move their technologies from the laboratory stage to the commercial arena, by buying materials to build prototypes or conducting key experiments, Lesko said.
Accelerate's funding acts as a grant that converts into debt if the company leaves New York State, goes public or goes bankrupt. The Emerging Technology Fund's investment is a loan that can be converted into an equity stake.
Delays in the process
Lesko, a Democrat, resigned from his post as Brookhaven Town supervisor to lead Accelerate two years ago. He said earlier this week he may have underestimated the time it would take to complete the seed funding when he had earlier anticipated announcing the funding in 2013. Due diligence and securing the right contractual agreements held up the process, he said.
The Emerging Technology Fund, which started as a partnership between Jove Equity and Brookville-based Canrock Ventures, also had a change in investors in late 2013 as Canrock was replaced by Topspin, which also added to the holdup.
The companies selected are all less than four years old and are focused on bioscience or clean energy. The roots of many of the technologies are in local research institutions such as Brookhaven National Laboratory or Stony Brook University.
"I think that paradigm -- Long Island research, Long Island capital, creating Long Island jobs -- is what we're going to need," said David Calone, chief executive of Jove Equity.
Goddard Labs' technology allows the agricultural industry to rapidly test for food-borne pathogens. Green Sulfcrete produces an environmentally friendly sulfur-based concrete. PolyNova is creating a new prosthetic heart valve. SynchroPET is developing a new PET scan technology. And Traverse Biosciences is commercializing an edible medication to prevent and control canine gum disease.
Two of the companies are run by local Democratic officials. Green Sulfcrete is led by William T. Biamonte, who is the Democratic commissioner for the Nassau County Board of Elections. Marc Alessi, founder of SynchroPET, is a former state assemblyman and former Brookhaven Town Democratic Committee chairman.
Focus on investments
Lesko said politics played no part in the decision to invest in the companies, explaining the Emerging Technology Fund first decides to invest in certain startups, and Accelerate's four-member investment committee then agrees to match the funding.
"The investments are led by private partners who . . . make their own separate investment decisions. They could care less about whether a certain member of a management team has a certain political association," he said.
Accelerate and the tech fund have another $500,000 altogether to fund five more companies. Lesko said he hopes to select those startups "as soon as possible."