VOLUME 28, NUMBER 8

WWW.RBJDAILY.COM

MAY 18, 2012

Firm targets raising funds for inventors

By SMRITI JACOB

Mikael Totterman and his team believe they can hatch big breakthroughs by thinking small.

and beyond to identify ideas that need help getting to the marketplace. The donations are not tax-deductible now, but Innovocracy is working with academic institutions to make them so, Totterman said.

Pilot project
The groups first launch partner was the University of Rochester. Innovocracy raised money to fund the development and testing of a toilet-training device for autistic children and those with developmental disabilities. The minimum goal was to raise $5,500. As of midweek, the project had raised $9,452 from 53 sponsors. It is expected to cap at $10,500 and close on June 5. A very targeted number of dollars can get a bunch of prototypes made better than the previous version, get that product in the hands of caregivers and children to make an actual difference, Totterman said. So the money that goes into that, that is a donation, it is entirely charitable with the objective of something significant being done. Children who suffer from autism often are not toilet trained by their school years or beyond. Factors such as communication deficits, sensory and motor differences, anxiety and skill-building problems contribute to making this task a challenge. The product and curriculum, developed by Daniel Mruzek, assistant professor of pediatrics at URs medical center, and Stephen McAleavey, associate professor of biomedical engineering at UR, aim to help a child use the toilet in a relaxed manner. A disposable sensor fits inside the childs underwear. The first few drops of urine activate a sensor, which emits a message to a pager that indicates to both the child and the parent or teacher that a simple training procedure should commence. The process is based on positive reinforcement. Ive had this opportunity through Innovocracy to generate money that allows me to further refine the technology, further refine the corresponding curriculum and pilot it out a bit more with children with autism and developmental disabilities, said Mruzek, who is impressed by how well the Innovocracy platform worked. The nature of

Totterman and a group of local entrepreneurs have founded Innovocracy Ltd. to connect inventors with funding, help them get to the next phase of development, a step closer to the marketplace, and perhaps build a base for a business. This is something that has been percolating as a challenge in the back of our minds probably for about four or five years now, said Totterman, chairman of Innovocracy and CEO of iCardiac Technologies Inc. Innovations at universities do not always come to fruition as products in the marketplace, he added, because federal agencies traditionally do not finance commercialization as much as they finance basic research. The gap between work in the laboratory and a real product is often a relatively small amount of money. So Totterman and seven othersincluding Alexander Zapesochny, president and chief operating officer of iCardiac; Ralph Dandrea, chairman and CEO of ITX Corp., Martin Edic, CEO of 24PageBooks Inc., and Richard Glaser, a former investment bankerdecided to help fill the gap. Based on a crowd funding model, Innovocracy lets individuals, who can choose to be anonymous, donate as much as they want toward a particular project in areas such as health care, sustainability and alternative energy. If, for any reason, a project fails to reach its funding goal, donors are not charged for their pledges. For initial projects, Innovocracy plans to raise $3,000 to no more than $15,000 for each idea. Currently a non-profit but with paperwork filed to become one of the states earliest benefit corporations, Innovocracy aims to work with universities in the region

this project, where its at in development, it doesnt really lend itself to the procurement of large grants. UR officials are excited about the opportunity to garner funding for projects such as Mruzeks, which may not receive large sums from federal agencies. Sometimes its hard for us as a not-forprofit institution to find that money, but if we can get some interest in people who have a philanthropic urge to help out in certain areas that are of interest to them and we can harness the energy and interest of all those people aggregating small contributions, thats pretty exciting, said Gail Norris, URs vice provost of technology transfer.

Attracting interest
Norris is not the only one who has bought into the idea. Innovocracy has signed three other institutions as launch partners: Rochester Institute of Technology, Cornell University and Clarkson University. The organization, which is still it in its beta form, hopes to have a total of eight launch partners. It also is in preliminary talks with institutions in the London area and Israel. Innovocracy expects to launch officially in the late summer or early fall with one to two projects from each of its launch partners. The key consideration really at this point is whether the institution is a likely high source of really innovative, interesting technology, theyre addressing fundamental issues, said Zapesochny, executive director of Innovocracy. The innovations, he said, could come from faculty, graduate students and undergraduates. A universitys technology transfer office picks a few of the top ideas, and the team at Innovocracy, which also has experts from New York City and the West Coast helping out, screens them to identify a couple of high-impact ideas, zeroing in on a lead project. Universities spread the word through competitions and meetings that showcase new technologies. Were trying to making sure we provide legitimate, good feedback to the teams on how they can make their project better or

Reprinted with permission of the Rochester Business Journal.

in those cases if the project comes a self-sustaining system isnt suitable for the platform, that is able to move these and how they could improve it for shepherd these innovations forwhatever venues they may ward and build a community of have to try to achieve their interest around that, whether its objectives, Totterman said. around the sponsors or folks who Were trying to be valueare trying to help the inventors added in the process. who are interested in manufacFor its first project, the toituring or ultimately potentially let-training device, Innovocbuilding a business from that, racy set the funding clock for Totterman said. So were pretty 60 days and was able to hit jazzed about it. its target in 35. Future projInnovocracy partnered with diects will probably be in the rector Dandreas firm, ITX, to de45-to-70-day range, Tottersign and build its website. Each man said. The length would university has its own page and depend on the type of research can track progress of projects beand the time it might take to ing funded. There was a learning raise money. The process curve for making sure payment drew money from students gateways work and having opporin amounts as small as $5 to tunities to integrate the site with $10 and contributions going social media outlets, Totterman up to $1,000 to $3,000 from said. Though he and Zapesochny wealthy business owners. know that it will take time to perIt was a very collaborafect the process, they are encourtive process, and I would say aged by the support and feedback all segments of the community they have received from Innovocparticipated in funding the projracys current academic partners. ect, which was very rewarding Global community to see, Totterman said. Zapesochny said people are Crowd funding has been gainlikely to have different motiing popularity. Roughly $1.5 bilvations to participatewhethlion was raised in 2011 by crowder they are supporting a spefunding platforms worldwide, a cific effort or projects in one report from Massolution states. areas such as health care or There were nearly 350 online Photo by Kimberly McKinzie sustainability, backing their The Innovocracy team includes, from left, Julian Baldwin, director fundraising sites at the end of alma mater or wanting to fos- of innovation management; Alexander Zapesochny, director; Mikael last year, up more than 50 perTotterman, chairman; and Ralph Dandrea, director. ter entrepreneurship. cent from the start of the year. Mark Chaney, CEO of CalInnovocracy joins a host of orchance to support parents of autistic chilvary Automation, donated ganizations, such as Kiva, for ex$2,500 toward Mruzeks idea. The father dren and also to show gratitude for help his ample, which helps fund entrepreneurs in of an autistic son, Chaney saw value in company has received. His firm, which is the developing world. having such a product in the marketplace approaching venture capitalists, received For now, the teams enthusiasm is infecand in helping a business to become self- initial help from Excell Partners Inc. and tious. Zapesochny in particular would be angel investors. sustaining. gratified if products reached the market I really found this approach to this because of this funding platform. Already I like to donate sometimes just to charities; I think thats a great aid. But I think funding to be really unique and interest- with Mruzeks idea, a couple of individuals this way, if you donate to a startup busi- ing and wanted in some way, in some small approached Innovocracy to express interest ness, its sometimes just more than a one- way to give back for the support that weve in investing in it as a business and potentime gift. It can proliferate itself through- gotten for our e-learning solutions compa- tially manufacturing the product. out the world faster than just a single char- ny, said Cypher, who donated $250 and It would be great to see things come to ity, said Chaney, who plans to donate would give again. fruition with a little bit of help, and to see For the first few projects, Innovocracy in- many of them come to fruition at the same again if an interesting idea surfaces. He added: If every business in Roches- tends to donate 100 percent of the proceeds time would be kind of my goal and objecter just did it once a year, wed be coming toward the inventors efforts. Later, the or- tive, Totterman said. I can only do one out with great technologies that help all ganization expects to keep roughly 7 per- actual company at a time, but Id love to types of people in need. Thats all youve cent for updates to its technology platform, be able to help the ecosystem. This, I think, Zapesochny said. Innovocracys long-term is our way of trying to help the ecosystem got to dodo it once. For Paul Cypher, president and CEO goal is to involve 50 to 80 universities. and move the needle forward. Were hopeful that this essentially beof CypherWorx Inc., contributing was a sjacob@rbj.net / 585-546-8303

Reprinted with permission of the Rochester Business Journal.