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TechAlert - August, 2006

Welcome to the August 2006 edition of TechAlert, a newsletter of the Illinois Technology Development Alliance. Our issues feature articles of great interest to entrepreneurs, to investors interested in leading-edge, high-tech opportunities, and to established companies who are looking for innovative solutions to pressing business needs. This publication is printed every other month. Look for our next issue in October!

 

- President's Corner

- NASA Illinois Commercialization Center Connects NASA and Entrepreneurs

- WorkForceMinistry: Connecting Career Management and the Faith-based

  Community

- Monday Morning Meeting – November 13, 2006

- Entrepreneur Briefcase- Make Insurance Planning Part of Your Business 

  Process: By Guy Blazak-Heil & Heil Insurance Agency

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President’s Corner

Welcome to the August issue of TechAlert. We hope you have enjoyed a productive summer, with at least a little time for relaxation, although if it’s the same for you as it is for us, you know that relaxation and entrepreneurial innovation seldom go hand in hand.

We’ve been busy here at ITDA. In addition to expanding our staff and our mission to include the NASA Illinois Commercialization Center, we announced ITDA-NICC Awards Program, an opportunity for Illinois small businesses with technologies that meet NASA needs to apply for awards of approximately $50,000 to $100,000.

We continue to consult with dozens of entrepreneurs and start-up businesses who are intent on developing and commercializing innovative technologies that solve big problems for big markets. In this issue, you’ll read about WorkForceMinistry, an Internet-based company led by a creative team of entrepreneurs who are using technology and the Internet to deliver career management to the faith-based community.

Consulting with companies and entrepreneurs like WorkForceMinistry is a very important part of what we do, but there’s another side to ITDA that isn’t always as visible but is equally, or sometimes more, impactful. That aspect, which is a significant part of our mission, is to help build the infrastructure that supports Illinois entrepreneurial activity—not  just in the city of Chicago, but statewide.

We work with communities like Rockford, Peoria, and west Chicago to envision, develop, and fund technology-based economic development programs, and we help look at the entire state of Illinois as our “virtual” Silicon Valley. We help provide the relationship glue that connects economically and geographically diverse regions to each other to create state-wide technology networks.

To share some recent examples, we are working with the DuPage National Technology Park to develop an incubator there; we’ve helped to develop an angel network in Rockford; we are participating in building a bio-mass program in Belvedere, and the list goes on.

So as the summer ends and we gear up for fall, we reflect that ITDA is fortunate that we have a lot to work to do. A long priority list represents a welcome challenge and an opportunity for us and our economic partners to continue expanding the entrepreneurial community that so benefits every county in our state.

We continue to expand our new web site (www.illinoistechnology.com) to be an easy-click source of information about events, publications, funding, and ITDA programs and expertise. More than 16,000 subscribers now receive our publications, funding alerts, and event announcements electronically. Click here to subscribe (http://www.illinoistechnology.com/stay_informed/) or pass this link along to people you know.

ITDA’s mission is to grow the high technology economy of this state. We are committed to providing targeted programs and best-practices expertise to our constituents. TechAlert is one of the ways we communicate with you. I encourage you to read this issue from end to end and email us your opinion at info@itda.biz. We want to hear what you think.

Tom Thornton

President

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NASA Illinois Commercialization Center Connects NASA and Entrepreneurs

As part of their expanded mission to provide commercialization services for NASA technologies, the Illinois Technology Development Alliance (ITDA) recently sponsored a seminar on August 17th to educate and inform area entrepreneurs on the opportunities, resources, and assistance that are available through NASA programs and grants.

Additionally, ITDA has announced the ITDA-NICC Awards Program, an opportunity for Illinois small businesses with technologies that meet NASA needs to apply for awards of approximately $50,000 to $100,000.

NASA encourages small businesses to engage

More than 50 entrepreneurs, technologists, researchers, and academics attended the NASA Development Technology Opportunities Seminar held in Chicago in August.

“Our objective was to attract start-ups and small companies that might have an opportunity with NASA but may have been put off by the process,” says Jack Curley, Director of Client Services at ITDA. “We wanted to show them that there are resources both inside and outside of NASA to help move them along. From the feedback, I think we exceeded our goal.” (Click http://www.illinoistechnology.com/events/ to review the presentations from this session.)

Gynelle Steele, SBIR Program Manager at NASA’s Glenn Research Center in Cleveland, OH explained the NASA Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Programs and emphasized NASA’s interest in teaming up with entrepreneurial technology businesses.

“Small businesses are developing technologies that address NASA’s needs,” Steele says. “They are also an important avenue to commercialization of NASA technologies. It is very desirable that we get well-qualified companies to propose in the SBIR and STTR programs.”

The seminar was especially timely as the deadline for responding to NASA’s SBIR and STTR solicitation for this year is September 7 (www.sbir.nasa.gov). “The thing to remember about SBIRs,” Curley says, “is that they are narrowly written and time specific. NASA has a certain problem that they are trying to solve. There might be 200 topics in a solicitation, but to be successful a company has to be able to clearly say I’m working in this technology area, and here is what I can do for you.”

Bill Saettel, NASA Glenn Customer Liaison Specialist, discussed NASA Space Act Agreements, which offer three alternatives: “non-reimbursable” where NASA offers services or goods as part of a collaborative agreement; “partially reimbursable” where mutual interests are served on a collaborative effort, and “fully reimbursable” where the customer pays full cost of the effort based on a NASA price estimate.

Space Act Agreements are generally one-on-one negotiated contracts. There is no public announcement or time limit; and each agreement tends to be unique. “Companies approach NASA to find an interest in their technology or to identify a researcher who is working on a technology that they (the company) need,” Curley says.

“We realize that creativity is nurtured in small businesses,” Steele says. “That’s where a lot of innovation takes place. It’s very attractive to NASA to work with these small businesses.”

Illinois is one of very few states chosen to have a NASA Commercialization Center, and both Steele and Saettel agree that the Center, along with other ITDA programs and expertise, offers a unique benefit to regional entrepreneurs.

“It can be challenging understanding what each NASA Center is working on and who to go to,” Steele says. “The staff at ITDA is wonderful in guiding the small businesses so they don’t get frustrated. They filter and help companies focus, so that when organizations come to us they know what they are looking for; they know who to talk to, and together we can get right down to the nitty-gritty of discussing the technology.”

Previous NASA grant and award recipients share their learned experience

The opportunity seminar also featured four local companies that have collectively secured more than $1 million in NASA funding. Representatives from Firefly Energy of Peoria, IL; Alien Works of Urbana, IL:  EPIR Technologies of Bolingbrook, IL, and Pirouette Software of Chicago offered tips and keys to success.

"The seminar was great from a couple of standpoints,” says Mil Ovan, presenter, co-founder and Senior Vice President of Firefly Energy. “The NASA speakers knew their topics, and those in the audience who never worked with NASA benefited from hearing from those of us who had actually been successful in securing NASA funding and grants.”

Firefly was looking for a specific technology for graphite conductivity when during an Internet search they happened on the name of a world-class researcher at NASA who was working in this very area. “Finding the researcher was a little bit of serendipity,” Ovan says, “but we might not ever have been able to get to him if we hadn’t had Jack Curley to help us broker a meeting with NASA and work through the process.”

Firefly received a grant of $100,000, and the NASA researcher received a separate grant of $175,000 because NASA believes their programs can also benefit from light-weight wires. “When a young company is working with such a large organization as the government, you have to have an ally to ‘laser beam’ you to the right levels,” Ovan says. “That’s where ITDA comes in. They know how to get you to the right people at NASA and what the right program/contract vehicle is for that relationship to take place.”

Saettel agrees. “We like to see companies come to us through NICC,” he says. “ITDA is an outstanding conduit for information, and they work very effectively with us. They consistently strive to bring the capabilities and needs of government together with those of industry.”

ITDA-NICC Awards Program

 

The NICC is soliciting proposals from Illinois-based small business firms for development technologies that can benefit the NASA mission requirements. Priority will be given to projects which promote Illinois’ strengths and advantages, and NICC is particularly interested in projects commercializing locally developed technologies with Illinois economic development potential.

NICC anticipates making $450,000 available in response to this announcement. Specific funding depends on funding availability. All funds will be distributed through a convertible note. Visit: http://www.illinoistechnology.com/events/documents/NICCTechAwardRFPFY06.pdf) for more details.

 

"This seminar showed that government and industry collaboration can be a formula for success,” Saettel says. “NASA partnerships provide economic opportunities for the customer and also yield great value back to NASA.” 

Ovan’s advice for entrepreneurs: “Take a really good look at the key technology involved and then work with ITDA to determine if that competency exists at NASA and whether that could form the basis for a potential relationship.”

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WorkForce Ministry: Connecting Career Management and the Faith-Based Community

Question: What do you get when a pair of passionate and committed entrepreneurs with more than 45 combined years of corporate recruiting and career management experience team up with a former pastor who is intent on serving the needs of the faith-based community?

Answer:  WorkForceMinistry, an innovative, faith-based, online professional networking, career community, and career management resource that already serves more than 50 churches that offer special interest programs and outreach opportunities to their members.

According to recent surveys, a new mega-church (defined as those with 2000 members or more) is opening every few days. These churches are committed to providing more than a set of beliefs and a place to worship regularly. Most sponsor out-reach ministries that include sports, music, and support groups. These programs give church members a way to network and to be involved with others of similar interest and faith.

"Church pastors who are visionaries and leaders in their field see these out-reach programs as a way to serve their congregations and communities and to evangelize,” says Al Arends, CEO and co-founder of WorkForceMinistry of Downers Grove, IL (www.myworkforceministry.com). “The faith community is a dynamic and high growth market. These churches reach out because it is their creed and their belief, and when they offer a ministry, they need it to be permanent and effective. That’s where we come in.”

 

Arends and Steve Sellers, EVP/GM and co-founder of WFM, have met dozens of church leaders who were passionate about helping their congregations find or change jobs. “About 48 percent of job seekers go back to their church in times of need,” Arends says. “It’s quite compelling, and gives you an understanding of the flavor of these churches today.”

 

To serve this dynamic and growing market, Arends and Sellers developed a proprietary set of online tools and strategic partnerships to affordably and effectively deliver training, tools, and career management resources.

"Many of these churches started out with unemployment self-help groups,” Arends says, “but they quickly found out that their volunteers lacked the resources and tools needed to support the membership. Our vision was to serve the unemployed, under-employed, and employed. According to experts the underemployed (those who make less than they did five years ago) are now nearly 70 percent of the labor force. We saw a way to use our technology, our contacts, and our years of experience to help them further connect people of faith with communities for work.”

Lifelong career management

 

"The average American worker can expect to change jobs more than 20 times before they retire,” says Arends. “Too often when you ask the average person who is managing their career, their answer is either ‘no one’ or ‘they don’t know,’ and yet this is one of the most important aspects of their lives.”

WFM offers a variety of resources on line. For an annual membership fee of $59.95, members have access to more than 1400 job boards and 1200 real-time newspaper want ads. They can search 2500 staffing firms, build a resume, receive interview tips online, and use a data base management tool to handle their calendar and schedules.

"WFM is a one-stop shop, a total solution,” Arends says. “Members can also do threaded discussion 24 by 7 and can connect with the faith community locally or nationally. They can look at more than 600,000 jobs on line because one of the unique aspects of WorkForceMinistry is that we allow companies to post jobs for free.”

WFM “spreads the word” through pastors and church leaders

 

WFM began marketing to churches in January and is doubling every month in terms of clients and revenue. Arends has built a lean, but market-savvy management team that includes Don Coleman, WFM Regional Director and a former pastor with 25 years experience in marketing and management, to bring their products and services to the faith community. Their distribution model is based on church endorsements and sponsorship.

"We first engage the pastors and the leaders of the church,” Don says. “Everything comes through their direction. We’ve been invited to services where we’ve had an hour on the pulpit; we have another church that’s putting on a video clip. We also disseminate information through church bulletins and through email marketing.”

A side benefit of the discussion Arends says is that in the pews there are hiring managers and people who know about open jobs. “We were in one church,” he says, “where 30 percent of the members knew of open jobs in companies in their own community.”

Individuals can sign up at the WFM web site. If churches choose, they can brand and private label the offering or use the career portal at www.myworkforceministry.com to allow their members to seamlessly connect from their own church web site.

"Faith-based market is sensitive and built on relationship,” Arends says. “Ours is a consultative, open-handed model. We form a relationship with a pastor or elder who sees the value in developing a ministry around our services. For as little as $5 day, they can have an effective, robust resource career management ministry.”

WFM offers a unique service called myCoachesConnection (www.mycoachesconnection.com) that connects hundreds of certified life coaches and clients. Through a partnership with the Coaches Training Institute (http://www.thecoaches.com) WFM offers eight coaching sessions for $80.

WFM also receives monthly revenue from career management materials and online and offline workshops, which churches can license if they choose. The company serves all denominations in both rural and city markets.

WFM’s marketing programs include a newsletter that reaches more than 12,000 subscribers in faith-based and other communities offering tips, advice, and encouragement. Every two weeks WFM releases an events bulletin, and they offer periodic grant-writing tele-seminars.

Next Steps

WFM plans to expand regionally and then nationally. Their clients are of many denominations, in both cities and towns, and include church populations of a few hundred to mega-churches with memberships of 5,000 to 30,000. Arends says their sales cycle on average is about six to eight weeks but that each church is a little different.

When Coleman meets with churches, they tell him that helping their members find jobs is something they want to do.  “It’s just an amazing process,” he says. “When we meet with a church, it’s not if, it’s when. They want to be doing this, but they don’t have the resources, the expertise or the time. We have churches all over the city and suburbs. The needs are the same.”

The company has private equity investors and is engaged in seeking additional capital. The new money will be used for marketing and to build and scale based on the footprint they have in place.

"There are thousands of churches just in the state of Illinois,” Arends says. “We have a small team that is passionate and committed and wears a lot of hats. We don’t have heavy capital overhead. We have a small office with a lot of technology. We have a working model proven with paying customers and testimonials. That’s what investments should be founded on.”

For more information, please contact Al Arends: aa@eworldemployment.com

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Monday Morning Meeting-November 13, 2006

 

The next Monday Morning Meeting will be November 13 at the Hilton Garden Inn, 1818 Maple Ave., Evanston, IL. The session starts with coffee and informal networking at 8:30 a.m., and the presentations will begin at 9:00 a.m. and end at approximately 11:00 a.m.

This event is sponsored by The Illinois Technology Development Alliance (ITDA) and the Illinois Technology Enterprise Center (ITEC)-Evanston, a partnership of the Illinois Department of Commerce and economic Opportunity (DCEO) and Northwestern University that is dedicated to helping entrepreneurs develop new businesses that generate high paying, sustainable jobs.

The Monday Morning Meeting helps prepares early-stage technology companies seeking professional investment. The sessions are well-attended by the entrepreneurial community, and ITDA and the hosting organizations continuously look for additional ways to further provide value to this audience.

"Entrepreneurs have told us that even though they know that our region is well-endowed with the resources needed to turn a good idea into a start-up company, they need an efficient, straightforward way to understand just what is available. Organizations tend to be fairly focused and specialized, and many times entrepreneurs aren’t sure where to start, or where to go, or what the various organizations offer," said Arun Bhatia, Venture Development Director of the ITDA.

In response, the Monday Morning Meeting agenda will expand to showcase regional technical and business development resources available to meet the needs of early stage and start-up businesses. Starting in November and going forward, ITDA will co-host Monday Morning Meetings with partners like ITEC-Evanston, the Chicago Technology Park, and Argonne National Laboratory who will talk about how they can help entrepreneurs. Companies affiliated with these programs will also present.

Information on registering for the upcoming MMM will be available shortly on the ITDA website. For more information on how to submit your company as a potential presenter at an upcoming Monday Morning Meeting, contact Arun K. Bhatia at bhatia@itda.biz.

                                                                                                                 

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Making Insurance Planning Part of Your Business Process

By Guy Blaszak, CPCU

gblaszak@heilandheil.com

1.800.323.5474

1.847.733.2646

 

For an entrepreneur there are never enough hours in the day. Whether it’s raising money, recruiting key employees, applying for intellectual property rights, or signing up beta customers, if you are like most entrepreneurs I know, you probably already have a priority list that stretches all the way out to the parking lot, and here I am suggesting that you add to it.

Insurance planning, you say, what the heck is that? And whatever it is, with everything else I have going on, do I really have to think about that now?

The short answer is yes. Even though you have more pressing things on your mind, if you are starting-up or growing a small company, and particularly if that company is in high tech or life sciences, you may face a unique combination of exposures.

Introducing ITDA’s Insurance Education Series for High Technology and Life Sciences Entrepreneurs

This is the first in a series of educational articles that will appear in upcoming issues of TechAlert. We will present topics that contribute to a thoughtful, phased approach to help busy (and often cash-strapped) entrepreneurs make appropriate insurance coverage part of their budgets and business plans.

These articles will

Our focus is on high technology and life sciences companies; however, these articles will include information that may be useful to anyone leading a start-up venture or growing a small- to medium-sized company.

Click here to see the full schedule of topics.

Topic 1: Select the right insurance professional to join your team before you decide what coverage to buy

Too often entrepreneurs postpone thinking about insurance until someone tells them that they need a certificate of insurance to accomplish something nearer the top of their mile-long priority list—for example leasing an office or research space or entering into a strategic relationship.

Under this kind of pressure and lacking a relationship with a trusted insurance professional, the entrepreneur frequently selects insurance coverage based strictly on price instead of considering the full coverage needs of the business or the variety of insurance and other risk management options that may be available. They end up buying the wrong coverage because it fits their budget rather than their business needs.

There is a better way.

Every successful entrepreneur builds a network of trusted mentors, advisors, and service providers who share the entrepreneur’s commitment to the goals and success of the company. Just as you choose an attorney, a CPA, or a banker early on, you need to select an insurance professional, too. Like these other experts, the right insurance agent can become an extension of your management team and do things that you may not otherwise know to do.

Being in the start-up phase of a business isn’t like anything else. As an entrepreneur, you know that, and you want to choose an insurance professional and an insurance company that know that, too, and are interested in building a long-term relationship with you.

Seek referrals, but don’t be satisfied with a name just because someone you trust gave it to you. Interview a prospective insurance agent as seriously as you would interview that A-list VP of sales. Ask the agent what size companies and what markets he or she serves. Ask them how many other start-up or early stage companies they have as clients. Examine their credentials and their commitment to continuing education. Network with organizations like ITDA which have many contacts within the specialty.  

Look for an independent, experienced insurance professional who represents insurers that specifically serve start-up and early growth companies. The high tech and life sciences entrepreneurial space represents a relatively new market to the insurance industry, and only a handful of carriers provide coverages that specifically target the needs of these kinds of start-up businesses—for example, Travelers, Chubb, Hartford, CNA, and AIG. Engage a local representative who has strong relationships with the underwriters at those insurers.

In addition to coverages, loss control and claims handling services vary from insurer to insurer. When you deal with an insurer that understands your size company and the industry you are in, their claims department will be able to more effectively resolve your claim. Loss control experts can be invaluable because they work with a company up front to identify actions to reduce risk and correct potential problems before a disaster happens.

This process won’t be accomplished overnight. Allow enough time so that you are empowered and in control rather than being pressured to make a fast decision. After you’ve done your research, select an insurance professional who demonstrates expertise, integrity, a partnership attitude, and relationships with the carriers, and who is willing to sometimes say no. During your formative years, this person will become your risk management department and a trusted advisor to you and your senior management team.

Whether you are leading a start-up or growing a small- to medium-sized company and haven’t thought about insurance in this way before, don’t panic. You can begin evaluating your insurance needs before your next renewal.

As a first step, investigate if your present insurance representative/broker knows your marketplace and how to address your company’s specific needs. If your company has changed during the year, your insurance needs may have changed as well.

If you choose, you can get a second opinion on your current coverages and service by asking a different broker to review your present program and make a recommendation. If you determine that you are missing something, you can always add coverage mid-term; there is no requirement to wait until your next renewal.

In the end, you want to have three things:

As you and your insurance representative plan it out intelligently, setting milestones on a time line, just like with every other aspect of your business plan, will make your company more attractive to investors who will recognize that you have considered and addressed exposures that left unconsidered could bring an early stage company down.

Next time, we will discuss basic coverages and explain the differences between "normal” insurance options that you may already understand and those coverages that are specialized for high technology and life sciences businesses.

Guy Blaszak, account executive at Heil & Heil Insurance Agency, Inc. in Evanston, IL has more than 30 years experience in the insurance industry. He specializes in serving the high technology and life sciences industries.  

The Series: Make Insurance Planning Part of Your Business Process

 

                                                                                                              

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