Kristin D’Amore of Dovel Technologies provides a look into how Virginia is supporting student innovation, an essential asset to the Commonwealth’s economy.


New businesses account for nearly all net new job creation and almost 20 percent of gross job creation as well as being responsible for a disproportionate share of innovative activity in the United States.* There is an enormous amount of entrepreneurial activity occurring at institutions of higher learning throughout the country, and Virginia is taking strides to strengthen student innovation on its campuses. On April 14, 2016, Governor Terry McAuliffe signed into law legislation that directs the Boards of Visitors of public colleges and universities to adopt intellectual property (IP) policies that are supportive of student entrepreneurship. The legislation, which was sponsored by Del. Charniele Herring, was supported by NVTC and a broad coalition of higher education and business community organizations across Virginia.

The legislation reduces some barriers to entry for student entrepreneurs by clarifying existing university IP policies to specify the conditions under which institutions of higher education own intellectual property as opposed to student ownership. Current policies at some institutions of higher education create uncertainty about IP ownership, which discourages students from launching new ventures, starting businesses, or commercializing research based on their own ideas. The bill encourages a campus culture that supports entrepreneurship and motivates Virginia’s universities to be hubs of creativity and innovation with the potential to drive regional economic growth through research commercialization and new business formation.

The issue of student entrepreneurship and IP rights was raised by the Governor’s Council on Youth Entrepreneurship, which was formed in August 2015 to study and recommend ways to support young business owners and innovators in the Commonwealth. The group is comprised of leaders in higher education, business, innovators and entrepreneurs. As a member of the Council, I was pleased to see an early win for young entrepreneurs and students across Virginia.

Increased student innovation and promoting IP commercialization and new patents by students is critical to growing Virginia’s economy.  Statistics from the Council on Virginia’s Future show that although Virginia’s rate of patent formation has improved in recent years, it is still well below the U.S. average. Furthermore, Virginia universities generated 1.94 startups per one million residents in 2013, measurably below the national rate of 2.38 startups and ranking the Commonwealth 27th in the country.

The Council on Youth Entrepreneurship is continuing its efforts assessing resources and opportunities in Virginia for young entrepreneurs and will be presenting additional recommendations to the Governor later this year.  The Council will make additional recommendations on areas including financial incentives for business formation, improving regulatory processes for entrepreneurs, strengthening academic programs for student innovators in K – 12 and higher education, and marketing the assets of Virginia’s education system to students, faculty, and business leaders across the country.  The Council’s efforts are focused on providing the next generation of entrepreneurs and innovators a solid foundation from which to launch their ideas, ultimately leading to further growth in the economy.

* According to the Kauffman Foundation, the largest foundation in the world devoted to entrepreneurship.

Kristin D’Amore is Director, Market Development and Strategy at Dovel Technologies and a member of Governor McAuliffe’s Council on Youth Entrepreneurship. 

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Overcoming Obstacles in Entrepreneurship

March 14th, 2016 | Posted by Sarah Jones in Guest Blogs | Member Blog Posts - (Comments Off)

This week on NVTC’s blog: on Feb. 18, the NVTC Small Business and Entrepreneur Committee sponsored a fireside chat entitled “Journey to Success: Overcoming Obstacles in Entrepreneurship.” Nate Miller, an assurance intern at Aronson LLC, shares the top tips from that event, which featured a fireside chat with Gary Shapiro, president and CEO of the Consumer Technology Association, and Scott Case, the founding CTO of Priceline.com and founding CEO of Startup America. 


On February 18, the NVTC Small Business and Entrepreneur Committee sponsored a fireside chat entitled “Journey to Success: Overcoming Obstacles in Entrepreneurship.” The event was moderated by Gary Shapiro, President and CEO of the Consumer Technology Association, who interviewed Scott Case, the founding CTO of Priceline.com and founding CEO of Startup America.

The discussion focused on Case’s experiences throughout his lengthy career as a key member of several startup companies; Case also shared his thoughts on the potential pitfalls startup companies can fall victim to. Some of Case’s key points to attendees included:

  • The time commitment required to be a successful entrepreneur.
  • The importance of creating and expanding connections in a growing area such as the D.C.
  • Overcoming failure repeatedly is a necessary trait to success.
  • The importance of maintaining a valuable network with the appropriate resources.

Case’s entrepreneurial journey started with part time jobs as an assistant for a plumbing company and a well driller, and running a local lawn-mowing business, where he gained an understanding of mastering his trade, servicing customers, and constantly looking for the next opportunity. While attending college at the University of Connecticut, Case spent his free time developing an advanced flight simulator with fellow classmates only to discover that the startup could not generate sales due to a lack of marketing. As a result, a key lesson that Case carries with him to this day is the need to supplement a great product with a sales and marketing team and other supporting functions.

Undeterred, Case shunned more secure employment opportunities to continue working with startups and, following an introduction to Priceline.com Founder Jay Walker a few years later, joined Priceline as the founding CTO. During his tenure, Case’s team at Priceline developed a “name your own price” system in the early days of the internet that allowed the company to grow significantly and successfully undergo an IPO with an initial market capitalization of more than $12 billion. Case attributes his success at Priceline to his understanding of the available technology, as well as the ability to effectively market it and while creating a team willing to try a number of ventures without fear of failure.

Since leaving Priceline in 2000, Case has co-founded or led several other ventures focused on technology, entrepreneurship and philanthropy such as Main Street Genome, Startup America Partnership, Malaria No More, and most recently, Potomac Innovation, a new business travel purchasing company. Case stressed the need for entrepreneurs to remain connected to advisers, financiers, peers and customers if they are to be successful, and noted that incubators, such as 1776 in D.C. and others in startup hubs such as New York City and Silicone Valley, can greatly help a new entrepreneur. Case also stressed the importance of minimizing government regulation to allow new business owners to focus on their core activities, but noted that government can help by listening and responding to entrepreneurs’ needs – such as the recent decision by the city of Nashville, Tennessee to significantly increase its broadband access, which appears to be attracting entrepreneurs to the city.

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Growth Companies Benefit From Final Crowdfunding Rules

December 8th, 2015 | Posted by Sarah Jones in Guest Blogs - (Comments Off)

This week on NVTC’s blog, Alex Castelli of NVTC member CohnReznick shares how the SEC’s adoption of new crowdfunding rules could be a game changer for growth-focused businesses and investors.


The SEC’s adoption of new crowdfunding rules could be a game changer for growth-focused businesses and investors

On Oct. 30, 2015, the SEC approved final rules that permit companies to offer and sell securities through crowdfunding. The new rules provide another capital raising option for growth-oriented companies and offer additional options for investors who want to get in on the ground floor of in what could be a very successful business.

Benefits to Companies and Investors

Some of the key benefits of the SEC’s rules permitting crowdfunding or, simply put, the ability of companies to raise capital from the general public through the Internet are listed below.

  • Early-stage and growth companies that may be unable or unwilling to raise capital from institutional or private investors have access to another source of capital.
  • By offering and selling equity in their company through the Internet, companies gain a wider and more efficient distribution of the offering to a larger audience when compared to traditional sources.
  • Using the Internet to offer and sell securities should decrease the cost of capital
  • Non-accredited individual investors, previously excluded from equity crowdfunding investments, are now invited to become investors with certain limitations.
  • Investors have a level of protection since companies raising capital through crowdfunding will be required to utilize funding portals or registered broker dealers and will have certain disclosure requirements to investors. Additionally, funding portals that wish to participate in the crowdfunding process as an intermediary will be required to register with the SEC and become a member of FINRA.

Launching Your Crowdfunding Campaign

Even if you are a tremendously successful owner or executive, a successful crowdfunding effort will require expert marketing surrounding your efforts to raise funds. You and the members of your management team will assume the responsibility of formulating a marketing campaign to create interest in your offering. You’ll need a good story to tell investors complete with business plans, financial statements and projections.

In the crowd, you’ll be competing for investment dollars with other companies so you need to engage in strategies to elevate your offering over all others. Earning the trust and confidence of investors can lead to a successful offering. Consider activities that could strengthen your relationships with clients, customers, and even vendors. These relationships may help to support a successful crowdfunding campaign and could represent your future investors.

To launch your crowdfunding campaign, you’ll be using the services of an SEC registered broker/dealer or SEC registered crowdfunding platform or funding portal. Each will probably offer different services and fee structures. Once your customers, clients, and vendors have invested in your business, you may want to reach out to a broader base of potential investors. Getting your offer in front of the right investors will be critical to achieving your capital raising goals.

As a private company, you may not be accustomed to sharing operational and financial information publically. A successful crowdfunding campaign may require additional transparency if you are to build trust and confidence in prospective investors. If you are not comfortable sharing company information with the world, you may want to explore a more proprietary method of raising capital.

Once you have executed a successful crowdfunding campaign, you will need to have a plan on how you will continue to communicate to your new investors. How much information are you willing to share? Which rights to information will investors have? Consider creating an investor-only section on your company’s website where you can post periodic information about your company’s progress, financial results, etc. Transparency is the key if you want to keep your investors informed and hungry to make additional investment in the future.

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A Good Company is Bought, Not Sold

November 24th, 2015 | Posted by Sarah Jones in Guest Blogs - (Comments Off)

This week on NVTC’s blog, NVTC Small Business and Entrepreneur Committee Chair Norm Snyder and his colleague Andrew Newton, both of Aronson LLC, share highlights from the committee’s November event, Positioning Your Company for Acquisition, showing how a good company is bought, not sold.


On October 21, 2015, NVTC sponsored a panel of experts to discuss the topic “Positioning your Business for Acquisition”. The panel included Larry Davis, a partner in Aronson Capital Partners; Dana Duffy, the CFO of Invincea; Michael Pratt, serial entrepreneur and managing partner & co-founder of Select Venture Partners LLC; and Mark Spoto, managing director at Razor’s Edge Ventures. The event was moderated by Committee Chair Norm Snyder, lead partner in Aronson’s Technology Industry Services.

The panelists spoke to a number of questions from the moderator and members of the audience. Topics covered included timing of selling a business, including initial planning; how to minimize due diligence headaches; how to find potential buyers and the need to find more than one possible suitor; and the characteristics of potential acquisitions that potential buyers typically consider.

A significant discussion involved how long in advance a company should start planning for acquisition, with a general consensus that it varies. The panelists gave examples ranging from acquisition planning beginning six months before closing to as far out as nine years. All of the panelists emphasized that an entrepreneur should always be preparing for an acquisition in an orderly way and should reevaluate possible exit strategies at each inflexion point during the life of the business. This built into another theme common throughout discussions: sell your business while it is on its way up, not on the way down. By constantly evaluating exit strategies, especially exit timeline, an entrepreneur can weigh the benefits and costs to each exit strategy at different times during the life of the business so as to not miss a good opportunity, which may be affected by external factors such as the state of the economy, as well as internal factors such as company performance

Another big topic was how companies can minimize the headaches of due diligence work. Again there were multiple answers to this question. The panelists focused on the benefits of having quality, competent advisors throughout the life of the business. One panelist, who had been a key management member in selling several companies, stressed the importance of making important investments in administration during the life of the business as the costs of not doing so may be far greater near the time of sale if significant regulatory, compliance, tax or accounting issues emerge during the due diligence.  Panelists noted that some key areas where companies can get themselves in trouble are trying to draft legal documents without an attorney, not saving electronic copes of all signed legal documents, not paying payroll taxes when due, not complying with federal, state and international tax rules (including sales taxes), not having necessary IP legal protection and by not ensuring proper accounting treatment of transactions from day one, especially for complex areas such as revenue recognition.  Problems (and surprises) that arise during due diligence can reduce prices, delay closings or even kill deals.

As for valuation, the panelists stressed the importance of being able to demonstrate continuing revenue streams. One time sales are great but all of the panelists spoke to how a company that can demonstrate year over year revenue streams will be more attractive to potential buyers. The other piece to valuation was context, and in particular, the fact that entrepreneurs to ask what their company can bring to a potential buyer. In many cases a smaller company being acquired is merely a rounding error on the acquirer’s financial statements, and the attraction is the potential of the acquiree’s products or technology, including synergies with the acquirer’s existing lines of business. A key concern of the acquirer is damage to its reputation, e.g. in the event of non-compliance with regulations or a law suit. The panel emphasized the need for depth, rather than breadth in the value the potential acquiree can add to the buyer’s business.  The overall conclusion was that those entrepreneurs who best determine how their companies can add value to a potential buyer, are most likely to sell, and sell at a good price.

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This week on NVTC’s blog, Alex Castelli, CPA, is partner and Technology and Life Sciences Industry Practice Leader at NVTC member company CohnReznick, explains how crowdfunding has become such an attractive financing vehicle for technology companies.


7K0A0597[1]The technology industry stands out as a major beneficiary of this promising method of capital raising. In 2014, technology was a leading sector in terms of capital commitments – at around $98.5 million – and led the number of raises that have been offered since inception, according to Crowdnetic’s Quarterly Private Companies Publicly Raising Data Analysis.2 Capital commitments in the technology industry trailed only behind the services industry.

So why has crowdfunding become such an attractive financing vehicle for technology companies? And what is required to launch a successful crowdfunding campaign?

Proving legitimacy and demand

Obtaining financing from traditional lenders such as banks, angel investors, and venture capital firms can be difficult for some early-stage technology companies. Crowdfunding offers an additional source for raising capital. Many investors are eager to support innovative ideas or services, and the growing legitimacy among accredited investors to provide financial backing through the internet has contributed to the popularity of crowdfunding. For tech startups, crowdfunding is an effective way to demonstrate to lenders the demand for a product or service and also to justify the company’s financial projections. Technology companies that have successfully secured accredited investors via the web are especially attractive to traditional lenders as their ideas have reached a level of legitimacy and approval.

Testing the markets and building brand awareness

In addition to raising capital, crowdfunding provides a platform for technology entrepreneurs to test the success of their product or service once it is officially on the market. Through this process, an entrepreneur can determine whether to continue investing time and money in a particular product or service based on feedback from potential customers. Doing so avoids involvement in a venture that may ultimately prove to be futile. The exposure of a product or service through crowdfunding offers the ability to build brand awareness and develop a loyal community of customers right from the start. Developing a loyal following can generate word-of-mouth advertising that can boost a startup business to success.

Finding success

There is a commonality among crowdfunding success stories. Deals receiving funding typically have outside sponsors who advocate on behalf of the deal. These are usually prominent investors who are willing to put their names on the deal and endorse them personally. This signals to other investors that it is a quality opportunity. “This is not so different from the way investments have always been done,” said Steven Dresner, CEO of Dealflow. “In the past, one prominent venture capitalist would put a million dollars in a deal, and then the startup could use that as leverage to attract more VC money. Now it is just taking place in a whole new forum.”

What does the future of crowdfunding hold?

Notwithstanding its popularity within the technology industry, to date, equity crowdfunding may be best characterized as a “growing” source of capital formation available to private companies. Entrepreneurs continue to test the market in determining how best to utilize crowdfunding as an alternative strategy for obtaining financing, gaining exposure, validating their products or services, and ultimately, expanding their businesses. The influence of crowdfunding on the middle market sector has yet to be fully realized. However, crowdfunding is on track to not only transform how privately held companies raise capital and interact with investors, but to also influence how businesses formulate and implement their go-to-market strategies.

1 https://www.fundable.com/infographics/economic-value-crowdfunding
2 http://www.crowdnetic.com/reports/jan-2015-report


Alex Castelli, CPA, is a partner and CohnReznick’s Technology and Life Sciences Industry Practice Leader. He can be contacted at 703-744-6708 or alex.castelli@cohnreznick.com. To learn more about CohnReznick’s Technology Industry Practice, visit the company’s webpage and follow CohnReznick on Twitter @CR_TechInd.

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