For several tense moments Wednesday afternoon, the founders of 15 startups stood along one side of the Atrium @ Rich’s and waited to find out if they were moving on to the finals of the $5 million 43North business plan contest.
They came to Buffalo from across the country – and as far away as Serbia – to make 5-minute pitches and face pointed questioning from the panel of 30 judges, all investors themselves.
Then, two 43North officials called out 10 company names to reveal which companies will have a chance to win at least $500,000 Thursday at Shea’s Performing Arts Center. Three companies will vie for a top prize of $1 million in Thursday’s event.
“Amazing and slightly life-changing,” Angel Rich, CEO of the Wealth Factory, a financial literacy startup from Washington, D.C., said afterward. “We’re really looking forward to being in the Top 3.”
For Jon Powers, a Clarence native and one-time congressional candidate, who is chairman and co-founder of a clean-energy startup that didn’t hear its name called, it was a good experience, but it’s hard to go back to Washington without any money.
“We feel disappointed, of course,” Powers said shortly after getting the news.
The judges took nearly an hour to deliberate after hearing what many in the audience said were a strong set of pitches from a solid lineup of contenders this year, compared with the first two years of 43North.
More of the companies are at a stage in their lives where they are generating revenue and raising money from investors.
“We’ve just upped the game,” said John T. Gavigan, 43North’s executive director.
Gov. Andrew M. Cuomo, in opening remarks Wednesday, said 43North is helping to spur the region’s transition to an innovation-based economy and is, in its third year, living up to his expectations.
The governor announced that he was committing $5 million for the fourth year of the contest, which is part of the state’s Buffalo Billion economic-development initiative and is fueled largely by New York Power Authority proceeds.
43North promises prize money, free incubator space and other services to the winning companies – eight this year. In exchange, they agree to move to Buffalo for at least a year and give 43North an ownership share.
Organizers made several changes to the contest format this year, to bring in a higher-quality mix of contenders, even if fewer companies applied. They asked applicants to answer more questions, including more questions about their finances, earlier in the application process than in previous years. And they charged an application fee for the first time.
Veterans of the Buffalo startup scene who watched Wednesday’s pitches and saw the presentations from the second or first year of the 43North competition say the roster of finalists has gotten stronger.
“Hopefully we have another 20 years of this,” said Steve Poland, managing director of the Z80 Labs technology incubator.
Most of the finalist companies came from Boston, downstate New York, the Washington, D.C., area and Northern California, all of which have more mature startup communities than Buffalo.
But 43North’s ability to draw the companies to the contest says something about the region’s resurgence, said Norma J. Nowak, executive director of the University at Buffalo New York State Center of Excellence in Bioinformatics & Life Sciences.
“We’re not the laughingstock anymore. We’re a town going through this renaissance,” she said.
Some of the company founders sound like they’re ready to move here, even before the winners are announced Thursday.
Several presenters talked about a desire to expand here or to take their company’s next step here. A handful said they had company ties to Buffalo that predated the contest.
One finalist, UltraCell Insulation, based in Boston, which recycles corrugated cardboard into residential insulation, has started a pilot study with Greenpac in Niagara Falls.
Another company, Asarasi, based in Westchester County, which has developed a way to harvest and bottle water from maple trees, relies on Mayer Bros. for bottling and has other business relationships here, said CEO Adam Lazar.
“We’re really excited to be part of the Buffalo ecosystem,” he said before his presentation.
The 30 or so judges came from the investing and venture capital communities.
“There are such high-quality, supermotivated, supertalented people going after real market opportunities. There’s not much more you could ask for than that,” said judge Jim Orlando of Omers Ventures in Toronto.
The 10 companies picked to move on are:
• Arthena, a New York City startup that uses automated and data-driven results to invest in the art market.
• Bounce Imaging, from Boston, which makes 360-degree, disposable cameras for first responders to use as they enter dangerous spaces to better identify hazards ahead.
• Formarum, a Toronto company that developed a water turbine technology to create self-powered and self-contained devices that can be installed in swimming pools.
• HigherMe, a Boston company that developed software to help retail and hourly employers hire better employees.
• Oncolinx, a Boston company that worked with the National Cancer Institute to develop cancer immunotherapies.
• PathoVax, a Baltimore biotech spinout from Johns Hopkins University that is commercializing RGVax, a low-cost vaccine to prevent HPV-associated cancers.
• UltraCell Insulation.
• The Wealth Factory.
• WeDidIt, a Brooklyn software service that aggregates donor data so charities can automate their prospect research and launch highly targeted fundraising campaigns.
The five who go home are: Buffalo’s Abcombi Biosciences, CleanCapital, MobioSense, NeoReach and Strawberry Energy.
A 16th company, Andromium, a San Francisco software company, withdrew from the contest prior to the pitches.
On Thursday, a new set of judges will listen to pitches over two rounds, first in the morning from the full group of 10 finalist startup founders and then in the evening from a group of three selected to compete for the top prize of $1 million.
In addition to selecting an overall winner, the judges will hand out a $600,000 runner-up award and six $500,000 awards.
News Business Reporter Matt Glynn contributed to this report.