In this issue of the Catalyst:
 ‘Inspirational Entrepreneur’ Makes
Generous Donation to BizStarts
Investor and entrepreneur Tom Shannon delivered more than a shot of inspiration during his speech on March 1. He presented BizStarts Milwaukee with a surprise donation of $10,000.
"We’re very appreciative of Tom’s time and energy with BizStarts, as well as this generous and unexpected contribution," Paulsen said,"This will help our capacity to help develop start-ups, get them ready for investment and launch, and contribute to job growth and a more vibrant entrepreneurial culture in southeastern Wisconsin."
Three words: the difference between success and failure
Paying attention to three words – What They Want – can mean the difference between a successful and a failed venture in Tom Shannon’s  view.
Having "WTW", as Shannon calls it, was the key to the success of Prodesse Inc., a Waukesha biotech company that he helped grow. “What they wanted is something throughout my business career that has really made sense to keep an eye on,” he said.
Shannon talked about the challenges and successes at Prodesse during the BizStarts Milwaukee Inspirational Entrepreneur gathering March 1 at We Energies.
Shannon is the founder of Shamrock Partners, a group of investors who invest in early stage companies. He became the lead investor in Prodesse, a Medical College of Wisconsin spin-off, in 2002 and was the company’s chief executive officer. Gen-Probe of San Diego, Calif., bought Prodesse in 2009 in a deal that totals $72 million to date.
He is now the lead investor and board chairman of Shamrock Energy Corp. in Oshkosh and Proxim Diagnostics of Irvine, Calif.
Prodesse developed tests to help doctors identify infectious diseases, including influenza.
In 2009, the company had the only FDA-approved product that could detect Influenza A (swine flu) from other types of influenza. Prodesse’s revenue run rate skyrocketed from $7 million to about $25 million.
But there were speed bumps on the company’s road to success. Investors thought they had done their due diligence when they moved forward with their investment. But they soon discovered that most laboratory directors wouldn’t buy Prodesse’s test, because it was too labor intensive to perform, Shannon said.
The company scrambled to make a product that was easier and faster for laboratories to use.
Large scientific companies began to take note and contacted Prodesse claiming its technology infringed on their patents and that the company would need licenses. “The biotech area is a mine field of intellectual property,” Shannon said. “The big boys are tracking you, and when you start taking clients away from them they want to do something to put you out of business. ” Prodesse eventually negotiated six or seven different licenses for its product. Sales grew to $4 million, and the company began turning a profit.
But in 2006, the company discovered it had to modify its tests in order to get them approved by the FDA.
Then came the spread of swine flu in 2009, and Prodesse took off.
“We had what they wanted at the right time, and that really made the whole difference in our company,” Shannon said. Looking back, Shannon said it was “dumb luck” that the company succeeded, because he and other investors didn’t perform due diligence as well as they should have. “It was much too risky a deal to have done,” he said.
He described four other deals he has considered since leaving Prodesse. He’s invested in two but passed on the others, largely because they didn’t pass the WTW test. The lesson of paying attention to the market continues to ring true, he said.
“Make sure you know what they want, and when you do, go forward. ”
Tom Shannon's entire speech can be found at www.bizstartsmilwaukee.com.
BizStarts Hires its first Executive Director
BizStarts Milwaukee is delighted to welcome Eric Paulsen as our first executive director.
Paulsen brings a background in startup business and communications to the leadership of the non-profit organization, which launched in 2008 to nurture an entrepreneurial culture in the seven-county region of southeastern Wisconsin.
Paulsen has spent the last four years working as communications director for the Greater Milwaukee Committee, as well as handling membership and communications for the Milwaukee Water Council, a GMC-led economic development initiative.
The GMC also played a key role in the development of BizStarts three years ago, and GMC president Julia Taylor noted “Eric is certainly an entrepreneur but also a great team member, manager, writer and visionary. We are certainly pleased for Eric and BizStarts and look forward realizing significant entrepreneurial growth in the region under his leadership. We see this as another extension of the GMC family. ”
Paulsen was a startup partner and operations director with Columbus, Ohio-based Troy Research, a company that pioneered online music and media research. Launched in 1999 on a $3,300 investment, the company made the Inc. 500 list in 2005 with revenues of $2.4 million. More recently, Paulsen founded Wellstream Media, LLC, which owns the travel website StateTrunkTour.com and an online radio station, hot102radio.com. He also works as a part-time on-air radio personality, spending over 8 years at WXSS (103.7 Kiss FM) before moving to WLWK (94.5 Lake FM) last April. Paulsen also guests weekly on WTMJ-TV Channel 4’s “What’s Hot” segment during their afternoon news.
Paulsen holds a BS in consumer science from the University of Wisconsin-Madison and a master’s in business administration from the University of Wisconsin-Milwaukee.
“Milwaukee’s economic prowess came as a result of great entrepreneurs generations ago starting the big companies of today. We’re ready to help the next generation of great entrepreneurs get the companies of the future going. ” said Paulsen.
“We’re here to smooth the process of creating – and investing in - new companies… where the best new jobs come from,” Paulsen said. “The opportunity to be a part of BizStarts Milwaukee and help rev up our region’s economic engine is very exciting. ”
College Consortium Corner
BizStarts Hosts Second Annual College Presidents & Chancellors luncheon
The BizStarts Board of Directors and staff are hosting their second annual, invitation-only College Presidents and Chancellors luncheon on April 6 at the Wisconsin Club. BizStarts expects all 21 colleges in the Milwaukee 7 region to be represented, most by their top level executive.
The keynote speaker will be Greg Meier, an entrepreneur and attorney, formerly with Michael Best & Friedrich. Greg and his partners founded Spreenkler Talent Labs Seed Incubator, a program targeted to college students and recent graduates. The program gives startups access to early stage funding, hands-on training and coaching, and a network of entrepreneurs and funders. It is an ecosystem that blends great ideas with the resources to make them happen…. Fast.
President John Torinus and Vice President Dan Steininger will provide an update on BizStarts Milwaukee and comment on the important role colleges play in helping create an innovation-driven, entrepreneurial economy in Southeastern Wisconsin. Penny Scheuerman will give an update on the BizStarts College Consortium, designed to promote the development of more entrepreneurial courses and programming on all respective campuses. BizStarts' new Executive Director Eric Paulsen will be formally introduced to the college executives.
Venture Track Update
March 16th: Innovative Workshop on "Managing your Board"
Venture Track hosted a lively and interactive workshop led by entrepreneur Tom Shannon. The topic covered how to develop and manage a board of directors as well as advisory boards for young, growing companies. The workshop received high marks from participants.
The next workshop will be announced soon. For more information, please contact Giuseppe Pappalardo.
Also on March 16: Ugly Baby Panel featuring three Entrepreneurs at Bacchus
 What is an Ugly Baby Panel?
It is the opportunity for entrepreneurs to polish their skills and message as they prepare for the real-life investor pitch.
We would like to give a special thanks to Jennifer and Joe Bartolotta for generously donating a room at Bacchus, a Bartolotta Restaurant.
Here are the companies that made their pitch:
US Combat Sports
Milwaukee County
USCombatSports.com is the nation’s number one local combat sports news website and online community for sports such as Mixed Martial Arts, Jiu Jitsu, Judo and Kickboxing. Combat sports, a multi-billion dollar industry, is the most rapidly growing sport in the world.
US Combat Sports is a new media company built with open source technology and proprietary processes that allows for a systematic, scalable platform for revolutionizing local, regional and national news collection, editing and distribution to the internet. USCS is leveraging this platform as an effective way to connect local, regional, and national advertisers, such as Harley Davidson, Budweiser, and Burger King to 18-34 year-olds and is monetizing through four revenue streams: website sponsorships, user subscriptions, display advertising, and an online store.
Good To Go EcoConvenience Center
Waukesha County
Steve Nikolas came up with a new and innovative development in the world of convenience stores (C-Stores). It is a fully automated convenience store with a half conventional and half biofuel gas station. Inside the store there is a series of vending machines that consumers can utilize for normal c-store needs. They also include a car wash with reclamation water technology. The store is fully ‘green’ and highly cost effective due to decreased labor costs and an immediate improvement to the bottom line due to decreased employee and customer theft, which accounts for over 10% of revenues annually. This is a franchise or license model.
Contact Chelsea Krause to find out more.
Learning Encounters
Racine County
Learning Encounters is dedicated to providing good quality yet affordable products for science education. Their market, science educators (internationally and domestically), as well as interested students can go to their website to purchase telescopes or microscopes as well as download experiments, lesson plans and interact with blogs. They have already started to create a vibrant online community which will help market their product and ensure a steady stream of sales. This young company has also established a strong social media presence. With science education being emphasized more and more within the education system, Learning Encounters is in a great position to capture a large market share. |
Newsmakers: Start-ups & Innovations in the News
BizTech Conference and Expo
BizStarts Milwaukee will have a booth at the upcoming BizTech Conference and Expo, held on May 11-12 at State Fair Park. The 7th annual BizTech Conference & Expo will once again foster business growth and innovation. Over 3,500 pre-qualified owners, executives and business professionals representing all industries will gather at the Wisconsin Exposition Center in search of new products, connections and strategies. Don’t miss it--register here. http://expo.biztimes.com/
Spaulding IQ Electrocardiogram Gets Green Light from FDA
The doughnut-sized electrocardiogram, developed by Spaulding Clinical Research, LLC, is designed for use in clinical trials. It records heartbeat data and has a voiceprint feature that identifies the subject. Read more about it in Kathleen Gallagher’s Ventures column in the Journal-Sentinel http://www.jsonline.com/business/118339144.html
Hands-On Garage Looking to Expand its Locations
The do-it-yourself auto-repair shop was featured earlier this month in the Business Journal in a piece by Stacy Vogel Davis. Read more here:
http://assets.bizjournals.com/milwaukee/print-edition/2011/03/04/auto-repair-shop-looks-to-expand.html
Mark Your Calendar
Venture Track Director Chelsea Krause will speak on funding strategies for your new venture at the next Inventors and Entrepreneurs’ Symposium, held on April 11 at 5:30 p.m. at Marquette High School in Room 127. The I&E Symposium, a lively and informative event, is hosted by Jill Welytok and Absolute Technology Law Group. For more information, visit http://www.milwaukeepatents.com/inventors.html
 The national Small Business Innovation Research and Small Business Technology Transfer (SBIR/SBTT) event in Madison will be held April 10-11.Register http://conferencing.uwex.edu/conferences/sbir2011/
Innovation and networking are the themes for this year’s BizTech Conference and Expo, held on May 11-12 at State Fair Park. Learn more and register http://expo.biztimes.com/
BizStarts Milwaukee in the news! Read all about us in the following stories:
http://www.milwaukeemagazine.com/currentIssue/full_feature_story.asp?NewMessageID=26013
http://www.biztimes.com/news/2010/9/17/new-companies-create-new-jobs
http://www.biztimes.com/news/2010/8/6/10-people-who-are-changing-milwaukee
http://www.fox6now.com/news/witi-100707-bizstarts,0,7484694.story
For up-to-date information on BizStarts Milwaukee, be sure to visit the website:
http://www.bizstartsmilwaukee.com
Classes and events relating to business can be found on the BizStarts calendar at:
http://www.bizstartsmilwaukee.com/Calendar.htm
Pass The Catalyst newsletter on to your friend and associates! They can subscribe to our free newsletter on BizStarts Milwaukee’s Home Page under BizStarts Milwaukee Catalyst.
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