Corporate Angels: Children At Work
Corrections or additions?
Published in U.S. 1 Newspaper on April 26, 2000. All rights reserved.
Bureaucrat to Start-Up: Jay Brandinger, CEO
E-mail: BarbaraFox@princetoninfo.com
A crucial funding gap imperils start-up companies in
New Jersey, says Jay Brandinger. “The gap is between a company
in the startup phase and the time when it can get private sector funding,
and that gap is increasing,” he says. “If the companies can’t
get to the point where the VCs will look at them, what are they to
do?”
Brandinger has seen this problem from both sides. He used to be on
the inside of state government, as chairman of the New Jersey Commission
on Science and Technology (www.state.nj.us/scitech), but now he is CEO of a start-up,
Westar Photonics (www.photonics.com). For the Princeton Chamber he speaks on “Nurturing
Small Business” on Thursday, May 4, at 11:30 a.m. at the Doral
Forrestal. Also that day the eighth annual Entrepreneur of the Year
will be presented. Cost: $30. Call 609-520-1776 (www.princetonchamber.org)
Brandinger served in the Army before graduating in 1951 from Cooper
Union and had a 40-year career with RCA, including being vice president
and general manager of the videodisk division and being on the transition
team when David Sarnoff Research Center was sold to GE. He left NJCST
to head Westar Photonics on Deer Park Drive at Princeton Corporate
Plaza (www.photonics.com).
Brandinger will tell what it’s like to be on the other side of the
fence — the way different organizations deal with high tech start
up companies, what it’s like to try to get funding, where the sources
are, and where they aren’t, and what surprises he found when he left
the state to start a start-up.
One surprise was how hard it is to convince potential funders of the
value of the technology. Another was how intractable large companies
are in their willingness to take risk to support start-ups.
What was no surprise to him, though it may seem strange to others,
is the differences between the way different parts of North America
look at the same subject. Venture capitalists on the East Coast tend
to be more like cautious bankers, he says, whereas on the West Coast
they are more like chance-taking entrepreneurs. This has unfortunate
consequences: “Back here in the East we tend to be rather conservative
in the VC business, with the result that companies face the valley
of despair to continue their development.”
As for Canada: “We find that our neighbor to the north is quite
hungry for high tech companies,” says Brandinger, “both at
the national and provincial levels, in the public and private sectors.
The governments provide funds and treat the companies in a holistic
fashion, examining all the questions — infrastructure, housing,
availability of technical resources at institutes and universities
— and including those in the package. In Canada, the government
can become a partner with the venture capitalist.”
“The competition is really quite stiff,” says Brandinger.
“It should be no surprise to anybody that the private sector has
to take the burden of developing the companies, through angel, venture
capital, and large company networks, but the state itself can with
a minimum amount of money help to change the risk factors that make
our venture people conservative and help expand their support of companies
in a start up phase.”
Don’t count on angel investors to make up the funding gap, he warns.
He puts angel investors in two categories: the hobby shop people who
have fun playing around in the company but may not be investing much
money, and the real business angel, who has many of the same criteria
as the VC. “It is a misnomer to think that an angel is willing
to go in earlier than seed stage venture capitalists,” says Brandinger.
Brandinger can point to some programs he helped the state develop
for entrepreneurs:
Early Stage Enterprises (ESE), a venture capital firmlocated on Route 518 that invests in seed and early stage companies(www.esevc.com). Through the New Jersey Economic Development Authority,the state contributed 10 percent of ESE’s total funding, and ESE hasmade some significant investments in New Jersey-based companies (www.esevc.com)The incubator program that provides space for young companiesat an inexpensive rent and also some supervision. Brandinger sayshe pushed for an academic study on the expansion of the incubatorprogram from Rutgers Bloustein School. This study painted a rosy picture,and now incubator funds have been dramatically increased.Technology Center of New Jersey, an EDA real estate projectthat can accommodate businesses that have outgrown incubators.Technology Transfer and Commercialization Program fromthe NJCST. Now it is a subordinated loan program. Young companiescan get as much as $250,000 from the state and pay it back to the”pool.”The “pool concept” was the principal on which the EconomicDevelopment Authority was created (www.njeda.com). It started outwith a nest egg, has invested that money and been repaid, and is nowfinancially independent from state government.Previous versions of the technology transfer program involvedactual grants, not loans, and linkages with academic institutions.The young companies could take the state money and spend it for researchsupport at, for instance, Rutgers or NJIT. Now the money is not restrictedin use but it must be paid back to the “pool.”This is good, says Brandinger. “A company in the development stagesought to learn how to operate a business. Either you are in businessor you are not. If you are only in business to get grant money, youare not in business. You ought to be responsible enough to repay thestate for what you are helped to do.””Now the shoe is on the foot, and I am saying the same thing,but the program runs only one year,” says Brandinger. “I hadstrongly urged that the program be modified, with time, to supportthe companies over a longer period. That was generally conceded butit hasn’t happened yet.”— Barbara FoxTop Of PageHelping Self HelpersYour friend’s mother has just been diagnosed with aterminal illness and is distraught. Or you are a human resources professionaland an employee is in your office, in tears, over having come downwith a rare disorder called Aarskog. Maybe you know where to turnfor help, and maybe you don’t. The New Jersey Self-Help Clearinghouse,though, probably has some answers.This 20-year-old organization has contact information for more than4,000 self-help groups on issues ranging from mental health, abuse,and addiction, to bereavement, parenting, and disabilities. “Werun a unique non-profit service,” says Edward J. Madara,founder and director, “helping New Jerseyans find and form self-helpsupport groups for a wide range of stressful life problems. Oftenthese groups meet at hotels and conference centers along Route 1 fortheir conferences. Hundreds of these groups hold weekly meetings inchurch basements and at hospital or community facilities in nearbycommunities.”One of the most recent groups is E.L.A.S.T.I.C. for those who sufferfrom an allergy to the latex found in medical safety gloves and balloons.The organization also helps people form new self-help groups, offeringworkshops and an annual conference.Manuals are available for starting groups on caregivers for the aged,menopause, retirement transition, unemployment, car accident recovery,living with depression/manic depression, and fibromyalgia and ChronicMyofacial Pain Syndrome. A one-page hand-out on establishing a newgroup is free with a self-addressed stamped envelope to NJ Self-HelpClearinghouse, Saint Clare’s Health Services, 25 Pocono Road, Denville07834-2995, or call 800-867-6274 or 973-625-9565.The clearinghouse’s website at www.njshc.org has basic informationbut the live links are limited to mental health resources. All theother information will be available by phone or by buying the $25Self-Help Group Directory.”You be the judge” is the clearinghouse’s motto. It does notrate or evaluate individual groups nor does it endorse a group. “Self-helpmeans more control — and more responsibility — in your hands,”says Madara.Top Of PageCorporate Angels: Children At WorkThe “Take Your Daughter to Work” idea takesa new spin for the ninth annual Camp Hyatt Career Day on Tuesday,May 2, at 9 a.m. at the Hyatt Regency. A front clerk at a hoteldesk or perhaps a pastry chef at a bakery? These are two of the jobsfifth graders at the Chapin School can choose from. Students willget to dress up in hotel uniforms, don aprons, and try on a career,working side-by-side with professionals.The program, sponsored by Hyatt, aims to give kids a head start inthe job market. More than 10,000 students in the U.S., Canada, andthe Caribbean have participated. Call 609-987-1832.Community Options Inc., is partnering with www.iGive.com,the first Internet venture to turn over online shopping profits tocharitable groups. In three years the site (www.igive.com) has donated$620,000 to thousands of organizations. Members of the site can takeincome tax deductions for the part of their purchase that is donated.Community Options, based on Farber Road, offers employment servicesand appropriate housing for more than 1,000 people in 11 locations(www.comop.org). Yardville National Bank‘s vice president ofcommercial mortgage lending, Jim Brotherton, has joined theBusiness Advisory Council of Community Options.The Fred C. Rummel Foundation has given $15,000 to the capitalcampaign of the Rescue Mission of Trenton. The campaign aimsto renovate the 77,000 square foot Cracker Factory building that housesthe mission’s store, administrative offices, maintenance shops, andmore.Alan Brooks Design at 20 Nassau Street recently raised$1,400 for the Mid-Jersey Chapter of the National Multiple SclerosisSociety during the April 9 MS Walk (www.alanbrooks.com).Previous StoryNext StoryCorrections or additions?This page is published by PrincetonInfo.com— the web site for U.S. 1 Newspaper in Princeton, New Jersey.
