This Arizona incubator helps early-stage startups reach success

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BioAccel 2

BioAccel

Located near Phoenix, the city of Peoria has a lot to offer, with hiking trails, lakes, parks, a vibrant arts scene, and historic buildings. But Peoria also has something entrepreneurs really need: BioAccel, a nonprofit business accelerator and incubator that helps early-stage life science companies reach success.

Until they get independent funding, startups are at a critical stage where they're either going to grow strong or fall by the wayside. The stakes are high: Every decision they make is extremely important and they need a lot of guidance. That's where BioAccel comes in.

First Aid for Startups

Startups in the medical device field can face even more obstacles. Medical-device companies often have to deal with regulatory agencies that enforce exacting rules and standards. These companies also have huge upfront costs, since you can't build a complex medical device in some garage. They need business incubators such as BioAccel and its medical device incubator BioInspire.

MaryAnn Guerra, co-founder and CEO of BioAccel, says, her group "thrives" in that early period. The nonprofit has offices in both Phoenix and Peoria, with Peoria's BioInspire focused mainly on medical-device startups. Before taking on a partner, BioAccel assesses a company for its proof of concept and whether or not the idea has any commercial utility.

When BioAccel partners with a startup, it makes an investment. It helps the company build up its infrastructure and provides it with free lab and office space for a year, along with business and technical support. Startups then pay half the rent their second year, and full rent their third year. During years four and five, they are expected to move out of the incubator and into the city of Peoria.

The entire time, the BioAccel partners have weekly meetings and benefit from a national council of advisors. They get their financials double-checked. They brainstorm on how to become stronger companies. They also make contacts with investors, until slowly, they're ready to be out there on their own.

"These companies are like your kids," Guerra says, laughing. "We're right there with them. At first, we're very hands-on, then we gradually let up, once they're positioned as an attractive investment opportunity for larger institutions or venture capital."

After five years, BioAccel partners are likely to be on solid ground, providing additional employment to the citizens of Peoria. BioAccel's ultimate goal is to build a strong ecosystem in Peoria for the health technologies and life sciences.

The Scorpion Pit

How does BioAccel find its partners? Through applications and recruiting (they've even convinced three startups to leave California and join them in Peoria). They also have an event called the Solutions Challenge that allows startups to compete in four different health categories, with an extra wild-card category for student biomedical entrepreneurs.

"There are a lot of problems out there, in search of a solution," says Guerra. "We identify unmet health needs and ask entrepreneurs how they'd solve them. We want to focus on real problems and see if we could connect them with real solutions. We also want to bring early-stage investments to the solutions putting them on a faster track."

The format for the event is a lot like the TV show "Shark Tank," except the competition takes place in a "Scorpion Pit." The Solutions Challenge "Scorpions" are entrepreneurs with deep-level experience, such as Todd Davis, chairman and CEO of LifeLock.

Each "Scorpion" has agreed to invest up to $50,000. Their investment is matched by BioAccel, giving the fledgling company $100,000 to work with right out of the gate. This year's event culminates with the Scorpion Pit on May 15.

Laying the Groundwork for Further Success

Arizona is taking technology seriously, and groups around the country are taking notice. In fact, BioAccel just won a grant from the US Department of Commerce's i6 Challenge. A nationwide competition, this half-million-dollar grant is for BioAccel's Southwest Proof of Concept Commercialization Center. The money will be used to provide increased access to BioAccel's facilities, along with additional investment capital for new startups.

This post is sponsored by Arizona Commerce Authority.

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