Corrections or additions?
This article by Dina Weinstein was prepared for the January 3,
2001 edition of U.S. 1 Newspaper. All rights reserved.
Start-Up Success Story
Don’t get Rick Weiss started about food, nutrition,
and exercise. That’s his passion. Weiss is president of Princeton
Multimedia Technologies Corporation (PMT), a company that helps
develop and manage diets. "People eat too much," says Weiss.
"And the typical meal of adults and children is greasy, high
fast food. Lack of exercise is standard; so many kids today are
because they are not physically active."
Weiss’s company has developed a number of applications for dietary
analysis, including a software program, ProNutra, that calculates
and manages metabolic diet studies to eliminate paperwork. This
device gives nutritionists the ability to automatically adjust diets
to meet specified constraints for several nutrients.
When Weiss started his company in 1993, it had a very impressive
name, but he was working from his kitchen table. Now he has an office
on Witherspoon Street and employs five full and part-time workers.
Along his company’s growth path, Weiss tapped state and federal
for both advice and funds. His company’s story is, in fact, a textbook
case of how a technology startup can leverage government help.
Most recently Princeton Multimedia Technologies received a $200,000
Capital Seed Loan from the New Jersey Economic Development Authority
(NJEDA) to market the technology. The loan will help Weiss do market
research, web application development, and development of PMT’s
"In New Jersey technology is the fastest growing sector,"
says Glenn J. Phillips, public affairs officer of NJEDA. In an effort
to foster technology companies, the state has even coined a new motto
for New Jersey "Innovation Garden State — Where Brilliant
Ideas Grow." Says Phillips: "When we fund companies like
Multimedia Technologies, they create jobs." To date six companies
have closed on similar NJEDA loans, receiving a total of $1.5 million
and creating 118 new jobs in the Garden State.
Federal grants have played a prominent role in getting ProNutra from
idea stage to implementation. Four years ago Weiss received his first
Small Business Innovative Research (SBIR) Phase I funding for $50,000
from the National Institutes of Health. The money was used to develop
the specification for what the PMT software would look and feel like
and what it would do (U.S. 1, July 17, 1996).
The following year, PMT received an SBIR Phase II grant worth
to incorporate the current USDA standard reference database with more
than 5,000 foods and 85 nutrient components. Weiss hired four Windows
software developers (U.S. 1, November 19, 1997). Then he moved out
of his home into an office location (U.S. 1, February 4, 1998).
Now Weiss sells a single license for his software for $3,000. ProNutra
is being used by 30 research and medical centers, including the
Institute of Health’s (NIH) general clinical research centers and
USDA human nutrition research centers. Other clients include such
institutions as Stanford, Yale, Harvard, Rockefeller University, and
University of Chicago. "The NJEDA loan will help commercialize
our products," says Weiss.
For Weiss’s business advisor, Don Greenfield of
Management Group LLC, the loan means much more. "From the funder’s
point of view the fact that Rick has gotten this Seed Capital Loan
means that the NJEDA acknowledges he has been able to make an impact
on grantors to get substantial funding thus far," says Greenfield.
"The fact that outside experts are validating his work is
because it is someone totally objective." Greenfield is confident
NJEDA’s validation will impress angel funders and venture capitalists.
Weiss is still going after more federal funds. He has tapped into
the National Institute of Health’s SBIR budget for a total of $1
so far, and he is expecting an additional $460,000 in SBIR funding
from the NIH to be used for "lifestyle assessment programs using
food images to analyze an individual’s diet."
The SBIR grants are designed to use small high-technology firms to
meet federal research and development objectives and to stimulate
the commercialization of innovative projects and concepts. All federal
agencies with a contracting budget for research and development in
excess of $100 million are required to establish an SBIR program.
The funding assists with the start-up and development costs associated
with bringing an innovation to the marketplace. And as Weiss puts
it: "The SBIR attempts to generate explosive growth."
PMT has also secured a $20,000 USDA contract for a project that
nutrition needs of people benefiting from the federal Women, Infants
and Children (WIC) program.
"Now I’ve got my hands into lots of different pots of getting
funding," says Weiss, but he also admits he has invested thousands
of dollars of his own time and money. He attributes his ability to
get funding to his passion for nutrition and his strong group of
He includes in that circle his accountant, Greenfield; Randy Harmon
of the Rutgers New Brunswick Small Business Development Center; Paul
Kydd, Rocky Hill-based inventor and founder of Envimed; and external
content advisors from the medical field.
Harmon took on PMT as an external client and provided services from
two consultants: Michael Miller, technical liaison for the New Jersey
Commission on Science and Technology, and Kydd. "Paul Kydd helped
me take a good proposal and make it great. He helped me reorganize
it and educated me on what he thought the peer review people would
be looking for — what things to emphasize," says Weiss.
also acted as my editor. It is such a competitive area."
Weiss says his experience writing and pitching research projects at
previous jobs also helped him writing proposals. He hasn’t hesitated
to include medical experts in the grant writing process. He says he
doesn’t try to do anything he doesn’t know anything about. "I
try to surround myself with people who have already gone through
But the most important factor for growth, Weiss says, is the strong
market need for the company’s products. Some of the company’s computer
programs are geared towards those watching their weight. Indeed, the
National Center for Health statistics reports 78 percent of American
adults are overweight or obese and 11 percent of American children
ages 12 to 17 are overweight. Other wellness products will be for
people concerned about their nutrition because they are participating
in drug trials, and athletes who need correct nutrition.
But the most crucial application of PMT’s software is to provide
support for clinical dietitians who need to monitor patients’
intake for clinical trials. "When you save a day of clinical
you are saving the company $1 million a day," says Weiss.
"Our concept though all these grants and mechanisms that we’re
doing, is that the care providers need access to mountainous amount
of data on patients and given the right set of tools, their job can
be more efficient and the health care can be more efficient,"
He thinks the proposed wellness programs — utilizing handheld
computers and web-based cellular telephones to remotely enter diet
and activity records into the system in real time — will be
"The health care system has been the slowest to automate into
computer technology from the standpoint of clinical administration
side of things," says Weiss. "It’s a hodge-podge and everyone
has their little kingdom to run and they want their own system. Our
focus right now is ultimately trying to link the doctor with the
and ultimately to manage more of their data automatically. And there’s
also this concept of an electronic medical record that the patient
owns, not the doctor."
Weiss grew up in Cleveland, Ohio, the son of Hungarian
Holocaust survivors. Weiss’ father was in Auschwitz. When he was old
enough, Weiss would help out his father in his jewelry store in
Cleveland, sometimes doing errands, his pockets filled with priceless
He was an electrical engineering and math major at Carnegie Mellon,
Class of 1980, and has a master’s degree from Princeton University
in electrical engineering and computer science. Weiss is married to
Susan Gertner-Weiss, and they have a three-year-old daughter,
He worked at Bell Labs, ADR (now Princeton Softech), Digital Equipment
Corporation, and (the now defunct) Health Information Technologies
at Canal Pointe.
Trained as a computer software developer, Weiss began developing
software seven years ago when his wife, a family and consumer
and a high school nutrition instructor, asked him to come up with
software that would help her teach a nutrition class to high school
athletes. Food for Fitness for Athletes was the focus, and Weiss knew
a lot about it. A high-end amateur cyclist, he had been cycling for
fun and competition for years. In fact, he met his wife on a cycling
trip. He also knew a lot about computer programming.
At that time he knew he wanted to start his own company. "I
`What can I do? It has to be something I feel passionate about.’"
Weiss recalls. "Now it’s fun that I have the potential to promote
change using technology to promote behavior modification." Weiss
knows what he wants: "Where I ultimately want to be is a big
Outsiders say the wide-ranging projects are actually PMT’s strength.
Earlier this year, students at Rutgers University Graduate School
of Management Interfunctional Team Consulting program conducted a
study that produced a market strategy for PMT. Raymond Sasso, the
program director, sees nearly 60 companies a year through this
"Princeton Multimedia Technology Corporation is unique because
it’s the first company to provide wellness enterprise architecture
software," says Sasso. "It is applicable to fitness centers
or pharmaceutical companies. Its architecture lends itself to a lot
of examples. Also, ProNutra is the most flexible dietary analysis
Weiss and his advisors say the company’s next step will be to raise
equity financing. "We’re looking for investors who share the
over the long term," says Greenfield. "So much of the business
involves Rick’s ideas, so when we move forward to the next step we’ll
be looking to work with like-minded investors."
— Dina Weinstein
Street, Princeton 08542. 609-497-4600; fax, 609-497-0660. E-mail:
Got an idea for a new business? Contact Randy
Harmon, director of technology commercialization and manager of
New Brunswick Small Business Incubator at the New Jersey Small
Development Center of Rutgers Graduate School Management. The small
business incubator offers a broad range of technical and business
support services (732-545-3221). There are currently seven technology
business incubator sites throughout the Garden State.
in the marketplace? Contact Raymond Sasso, director of the Rutgers
University Interfunctional Team Consulting Program at the Graduate
School of Management in New Brunswick (973-353-1126). Graduate
work in teams to produce a market study and strategy for clients,
who are asked to be available to the team and to open the company’s
Innovative Research (SBIR) grant is designed to fund research for
ideas using small high-technology firms to meet federal research and
development objectives and to simulate the commercialization of
projects and concepts. A primary goal of the program is to stimulate
high-technology innovation within the small business community to
enhance the nation’s productivity and help the U.S. maintain its
in the international marketplace.
All federal agencies (National Institute of Health, Federal Transit
Administration, Department of Defense, etc.) with a contracting budget
for research and development in excess of $100 million are required
to establish an SBIR program. The funding provides revenue to small
high-tech firms to assist with the start-up and development costs
associated with bringing an innovation to the marketplace.
The major factors in determining whether a project will be funded
are that funding will validate the feasibility of the particular
or technology and, with further private or public funding, the
recipient will further develop a concept or technology for the
SBIR Phase II funding is one public source that can be used to further
develop a concept or technology. Phase III projects use private sector
investments and support to bridge the gap between product development
and commercial sales. No SBIR funds are used in Phase III projects.
SBIR research topics are selected to fit federal agencies’ current
research needs. Yearly the National Institute of Health publishes
a book soliciting projects.
"For small companies, it’s a very important source of financing
because it’s a grant," says John Tesoriero, executive director
of the New Jersey Commission on Science and Technology (NJCST).
SBIR is free money and companies don’t have to pay it back."
New Jersey companies that wish to apply for an SBIR grant can tap
into the expertise of NJCST Washington, D.C., consultant Mike Miller
at 703-354-1102. Miller can explain how to navigate the SBIR
forms. The NJCST (609-984-1671), also offers assistance to businesses
in the incubation stage (www.njcst.com). Other online resources:
Authority (NJEDA) Seed Capital Loan program provides loans from
to $500,000 to early-stage technology businesses that need funds to
bring their products to market. (609-292-1800 or www.njeda.com). Seed
Capital loans are made at flexible terms and are available for working
capital to meet daily operating expenses and fixed asset needs, like
buildings and equipment. The loan carries an interest rate of 9.5
percent. It includes a one-year moratorium on repayment of principal
and interest and a four-year term of repayment thereafter.
"Among its eligibility requirements, the Seed Capital Program
calls for eligible companies to have a detailed business plan and
strong management team, operate within an emerging technology sector,
and to have initiated product testing," says Caren S. Franzini,
NJEDA executive director. NJEDA’s loan officer can be reached at
In addition to the NJEDA there’s the New Jersey Commerce and Economic
Growth Commission, as well as several innovative tax and tax credit
programs to help technology companies
of Greenfield Management Group LLC in Jackson suggests looking at
the investment process as a validation process: "If someone comes
to me and says `I have an idea, blah, blah, blah,’ they’re excited
but it’s just an idea. It has very little value. At each step in
funding you need to get validation from other sources to prove that
it is a worthy product."
When you are ready to open the doors to venture capitalists, the New
Jersey Technology Council offers assistance (www.njtc.org. The
NJTC has recently established its own venture fund, with Jim Gunton
as general partner (856-787-9700). The NJTC is also sponsoring a
Capital Conference on Friday, January 26, at the Princeton Marriott.
Speakers will include Jan Leschly, CEO of Care Capital LLC, and Mark
G. Heesen, president of National Venture Capital Association. Cost:
$160. Call 856-787-9700 or go to www.njtc.org.
More information on venture capital is available at the National
Capital Association website: www.nvca.org.
companies might well use the services of University Ventures,
extension 280 (www.uventures.com). To help siphon technology
to the companies that need it, Craig Zolan launched this clearinghouse
for the technology coming out of universities and research institutes
from around the world. Member companies log on, do a search, and shop
around for the technology they need.
University Ventures takes a commission on each transaction, and so
far universities have been more than agreeable to the idea. "On
our site more than 4,500 corporations are looking for technologies
and 240 companies, universities, and government labs are marketing
their technologies on our site," says Zolan. "About 8,000
technologies are ready for sale."
charge of technology transfer. See page 22 of this issue for
on his January 5 conference.
— Dina Weinstein
Finding the funding to get ideas out of the dream stage
and into first phase development can be as mind-boggling as coming
up with the ideas in the first place. This despite the abundance of
venture capital companies headquartered in the Garden State.
Some relief could come from one of the newest funds, New Jersey
Council’s Venture Fund, which plans to invest early stage capital
particularly in state-based businesses (E-mail: email@example.com
or call 856-787-9700). Currently, only about 10 percent of the venture
capital raised in New Jersey actually goes into enterprises located
here, points out Jim Gunton, who has been named general manager of
the new fund. Gunton is also vice president and principal at the
Venture Fund, one of the few New Jersey venture capital companies
that focuses on expansion stage, New Jersey-based enterprises
His focus on early stage companies is what will set NJTC Venture
Fund apart from many of the other funds based in New Jersey, says
Gunton. Early stage falls between seed stage and the majority of
venture capital investment.
A seed stage investment might range from $300,000 to
$3 million. The seed stage company has probably gone through one or
two rounds of angel financing or is a spinoff that was privately
by a larger firm. Then there is a gap before the traditional venture
capitalists step in. Edison Venture Funds, for instance, invests from
$1 to $5 million in "expansion stage" companies with at least
$2 million in annual sales. Care Capital, the new healthcare venture
capital firm at Princeton Overlook, takes the next step. It wants
to make "late stage" investments of from $5 to $50 million
and up (U.S. 1, November 8).
The in-between "early stage" is what Gunton hopes to fund.
"We’re looking for companies to invest in with the potential for
rapid growth with sustainable competitive advantage and opportunity
for a premium exit," says Gunton. "The appeal of early stage
venture capital is that you are looking for the home runs."
He adds that "New Jersey’s emergent industries such as optical
networking, wireless, and genomics are especially appealing."
But he has not ruled out more traditional industries such as
pharmaceuticals, financial services, electronics, and aerospace. Other
characteristics of the NJTC fund:
leading law firms, banks, entrepreneurs, corporate executives,
leaders, and financiers.
comprehensive coverage of the state’s business market. NJTC members
will get their applications reviewed and will certainly get some
but no guarantees can be made to them.
principals, who have extensive business relationships and knowledge
of New Jersey companies and entrepreneurs.
$3 that Gunton raises with $1 from its own funds. (For this
the NJEDA will use income from its own investments and monies raised
through bond issues — no tax money gets used.)
Federal money could triple this amount. Under the Small Business
SBIC program, designed to help "grow" small companies, the
SBA leverages equity capital with government debt at a rate of two
The SBA loan money must be repaid, but at lower rates than a private
investor would expect — treasury rates, which might be 9 or 10
percent. Meanwhile, the payback for the venture capitalist investment
could be as low as zero or as high as 60 percent from a very
company. Gunton is understandably optimistic that the rewards for
NJTC Venture Fund investors will be high, and he guesstimates they
will get a return of 30-40 percent.
"My aim is to get 100 percent of the fund invested in New Jersey
companies," says Gunton. At Edison, he and John Martinson tried
to focus on the New Jersey market. "With frustration, I sat by
and watched an enormous number of opportunities go by — sometimes
getting out-of-state money, but sometimes just floundering."
Road, Robbinsville 08691. Donna Marchetti, owner. 609-259-1969; fax,
609-259-1219. E-mail: firstname.lastname@example.org. Home page:
Business angel investing, capital resources, network for entrepreneurs
and private/angel investors.
and early stage companies in New Jersey, New York, and Pennsylvania
(609-737-0267; fax, 609-737-6647; www.equityresearchgroup.com).
Kim and Jack Louth.
Boulevard, Princeton 08540. Ted Stack, co-managing director.
fax, 609-452-7134. Home page: www.inhealthventuremgmt.com. Services
for start-up companies.
Brook Drive, Silicon Garden, Somerset 08873. Daniel J. Conley, venture
catalyst. 732-873-1955; fax, 732-873-3237. E-mail: OnCallCFO@aol.com.
Home page: www.OnCallCFO.com. Expansion capital, venture capital,
creative leasing to business owners, coaching entrepreneurs in
Front Street, Trenton 08608. Deborah Osgood, executive director.
fax, 609-396-0559. E-mail: email@example.com. Home page:
Community development small business loan fund providing financing
and technical assistance to business in Mercer County.
08542. James R. Swartz, managing general partner. 609-683-4500; fax,
609-683-0384. Home page: www.accel.com. Focused on Internet,
software, and health care services also with an office in San
08540. John Torkelsen, president. 609-924-3000; fax, 609-452-2700.
For start-up and early stage companies, a participating security in
SBIC, also PVR Securities Inc.
Suite 530, Princeton 08542. Jennifer H. Lobo, president. 609-683-1318;
fax, 609-921-1509. Investment bankers.
Third Floor, Princeton 08542. John Clarke, managing general partner.
609-924-6452; fax, 609-683-0174. Home page:
Overlook Suite 102, Princeton 08540. Jan Leschly, partner.
fax, 609-520-9299. E-mail: firstname.lastname@example.org. Life-sciences
515, Princeton 08542. James C. Blair, general partner. 609-683-5656;
fax, 609-683-9789. E-mail: email@example.com. Home page:
08558. Ron Hahn/Jim Millar, general managers. 609-921-8896; fax,
Home page: www.esevc.com. Venture capital investor in seed and
early stage companies.
4, Suite 200, Lawrenceville 08648. John H. Martinson, managing
partner. 609-896-1900; fax, 609-896-0066. E-mail:
Home page: www.edisonventure.com. Equity and guidance to companies
with proprietary technologies or unique services in emerging markets.
08542. James H. Cavanaugh, president, general partner. 609-430-3900;
fax, 609-430-9525. Formerly Healthcare Investment Corporation.
Princeton 08540. Robert F. Johnston, president. 609-924-3131; fax,
609-683-7524. E-mail: firstname.lastname@example.org. Focus on healthcare and
309, Princeton 08542. Stephen Shaffer, partner. 609-497-4646; fax,
609-497-0611. E-mail: email@example.com. Financing for early
to mid-stage companies, a participating security SBIC.
204, Princeton 08540. Pasquale DeAngelis, chief financial officer.
609-919-3560; fax, 609-919-3570. Www.proquestinvestments.com.
Focus on cancer research.
Room 208, Lawrenceville