Tag: Spring2011

In chemistry, if you want to get a reaction, you have to find a way to bring the right molecules together and have them bump into each other with sufficient force. Sometimes you need a catalyst to get things started.

It turns out that the process of encouraging entrepreneurship is remarkably similar, according to Germain Böer, Professor of Accounting and Director of the Owen Entrepreneurship Center. “One of the best ways to stimulate a lot of entrepreneurial activity is to create occasions for entrepreneurs to bump into one another,” says Böer. (Watch Böer’s video about entrepreneurship.)

These days entrepreneurs in Middle Tennessee have lots of opportunities to rub elbows, thanks to Vanderbilt and its collaborations with two local organizations: the Nashville Capital Network (NCN) and the Nashville Entrepreneur Center (NEC). NCN supports entrepreneurs and startup companies by providing feedback on business plans and assistance with raising capital. NEC, on the other hand, is a 501(c)(3) public-private partnership that gives its members access to training classes, mentoring resources and networking events.

In addition to the school’s own classroom offerings and funding opportunities, Owen students can get a taste for entrepreneurship by participating in internship programs at both organizations. These internships give them direct exposure to the process of refining a business plan, securing financing and getting a new venture off the ground. Meanwhile the organizations (and entrepreneurs they serve) benefit from the intelligence and enthusiasm that the students bring to analyzing business plans and improving presentations or pitch materials. In sum, it is a winning formula for everyone involved, and at the center of the equation is the Owen School, providing just the right catalyst to spark business growth in Middle Tennessee and beyond.

NCN: Matching Entrepreneurs with Angels

Getting a business off the ground is always a challenge, particularly for first-time entrepreneurs without the network or connections to raise capital. That is where NCN comes into play. Started as a joint initiative between private investors and the Owen School, NCN maintains close ties with Vanderbilt. Its Executive Director Sid Chambless, BA’96, MBA’03, and Director Chase Perry, MBA’08, are both Owen alumni. Dean Jim Bradford and Professor Böer sit on its board of directors.

NCN has an interesting hybrid structure. The organization is structured as a taxable nonprofit but also manages two venture capital funds: NCN Angel Fund and a TNInvestco Tennessee Angel Fund. The first fund pools the resources of angel investors who also invest individually in NCN-supported companies. The second fund represents the proceeds from $20 million in tax credits that NCN accessed through Tennessee’s competitive TNInvestco program, which seeks to foster entrepreneurial “innovation clusters” across the state by awarding tax credits to a select group of venture capital funds. In addition to the economic development benefits, the state also shares any profits from TNInvestco investments.

To ensure that worthy entrepreneurs have access to an enthusiastic network of angel investors, NCN must provide those angel investors with high-quality, well-vetted investment opportunities. Interning as NCN associates, Owen students work with entrepreneurs to refine their presentations and clean up their business plans. The interns also participate in meetings where experienced local advisers give the entrepreneurs feedback on their ideas. Meanwhile, on the other side of the deal, the students provide deal context and analysis to help angel investors assess the quality of a potential investment. Since its founding in 2003, NCN has helped 23 early-stage companies secure financing, with NCN angel investors providing more than $20 million in funding.

Chambless credits Professor Böer and Dean Bradford with forging a strong partnership between NCN and Vanderbilt. “For Owen students who may want to start their own businesses, an NCN internship provides a great opportunity to learn all about the process of capitalizing and growing a business,” Chambless says. “The real benefit for students is to be in the room with entrepreneurs as they pitch to investors, to see the kinds of questions that investors ask. I really think this program is one of a kind in the way it enables business school students to work on live venture capital funds and influence the deployment of those funds while simultaneously working with entrepreneurs in the community.”

NEC: Students in the StartUp Studio

Founded in fall 2009, NEC has met with more than 150 companies and helped 13 of them raise $3 million in angel financing. Four of those companies have since officially launched their businesses. “That’s a pretty good hit rate,” says NEC President and CEO Michael Burcham, who has firsthand entrepreneurial experience himself. Burcham founded three separate venture-backed health care companies before taking on the leadership role at NEC. Burcham also serves as Clinical Professor of Entrepreneurship at Owen, teaching classes about health care innovation and launching ventures.

From formal internships and independent study programs to extracurricular volunteer projects, Owen students are involved at NEC in numerous ways. As part of its mission to promote entrepreneurship and economic growth in Middle Tennessee, NEC evaluates new business ideas and offers a series of popular classes and coaching sessions on basic topics, including starting a business, raising capital and building a leadership team. Students assist with these services by organizing classes, delivering training, assessing business plans and offering feedback.

Burcham says there are typically several Owen students working at any one time with the entrepreneurs in NEC’s StartUp Studio incubator space. This temporary work arrangement gives the highest-paying members a business address, access to meeting rooms and classrooms, and face-to-face time with mentors. Students also help organize and run NEC’s technology microfund, which invested in seven new technology startups in 2010, including a company founded by Mark Harris, BS’03, PhD’09, an MBA candidate for 2011.

“A lot of these students either want to work in a startup company or have some interest in moving into investment banking or venture capital,” Burcham says. “By working with NEC, the students gain valuable experience that can give them a competitive advantage when they graduate.”

Learning Entrepreneurship in the Classroom—and Beyond

“Our goal in teaching entrepreneurship is to create wealth in the region,” Germain Böer says. “We want to help lots of startups and ultimately create a lot of very successful companies.” In the Vanderbilt MBA program, a lot of this learning takes place inside the classroom in courses such as Launching the Venture, Business Plan Development, Product Design & Innovation, and Accounting & Finance for Entrepreneurs.

Many Owen students, however, learn just as much if not more about entrepreneurship through the aforementioned internships with NCN and NEC. The school also offers its own Summer Enterprise Development internship program. Instead of taking a typical internship in a corporate environment, students can apply to receive a stipend of $15,000 to work on their own startup ventures during the summer between the first and second years of their studies.

Henry Oehmig, an MBA candidate for 2011, was one of three Owen students to receive a stipend last summer. He entered the process with a business plan for an environmentally friendly charcoal lighter fluid made from recycled restaurant grease. Oehmig had been thinking about building a business around a green lighter fluid product for a couple of years, but the Walmart Better Living Business Plan Challenge provided the impetus to build a true business plan around the idea. The annual competition encourages students to invent sustainable products or develop sustainable business solutions and present them to a panel of Walmart executives, suppliers and environmental organizations. The plan developed by Oehmig, fellow 2011 classmate Ian Prunty and three other Owen students won the regional level of the 2010 competition and made it to the national semifinals at Walmart’s headquarters.

After the competition, the other students peeled off to pursue their own summer plans, but Oehmig felt the lighter fluid idea had potential, so he revised the business plan and prepared to make his pitch to the panel of Owen professors, alumni and local businesspeople, including investment bankers and marketing analysts, who were awarding the summer stipends.

“The application process was a great learning experience,” Oehmig says. “Going through the process of pitching our businesses and trying to convince potential investors gave all the applicants a taste of what it is really like to try to raise money when starting a business. There was a lot of camaraderie among all the students who were pitching business plans, and I really enjoyed hearing the other pitches.”

A couple of days later Oehmig was thrilled to learn that he had been awarded one of the stipends. “If you have a business idea that really excites you, there’s no better situation than to be given $15,000 in seed capital without having to give up any ownership stake in the company,” he says. “As a student, it’s terrific because it really gives you a chance to practice entrepreneurship with a safety net in place. If the business does not work out as you’d hoped, you can still go back to your second year of business school with valuable skills and experience, plus a great story to tell recruiters.”

Of course having that safety net did not mean that Oehmig rested on his laurels. To the contrary, Oehmig dove wholeheartedly into making his business a success. He ended up plowing all of the stipend into the venture and then even supplemented it with his own personal funds. During the course of the summer, his vision for the business evolved. Where Oehmig had originally planned on setting up his own manufacturing facility to create the lighter fluid, his talks with biodiesel marketers and manufacturers convinced him that he could launch his venture more quickly and more cost-effectively by outsourcing manufacturing to third-party manufacturers.

His biggest change in direction, however, came when Germain Böer introduced Oehmig to Nashville-based consultant Rick Neitz, who suggested that Oehmig consider licensing the intellectual property behind the product rather than attempting to produce and market the product on his own. For Oehmig, who had a provisional patent on a green lighter fluid formula, the licensing idea had several attractions: He could launch his product faster with less upfront capital and earn revenue from sales royalties. When Oehmig saw that Clorox, which dominates the lighter fluid market through its Kingsford brand, was soliciting ideas for an eco-friendly lighter fluid, he made the decision to pursue the licensing route.

The bulk of the stipend money went toward hiring a professional chemical development lab that could formulate a biodiesel product that closely matched Clorox’s environmental and performance considerations. Although the product formulation was originally supposed to take only six weeks, it ended up lasting more than four months, teaching Oehmig a valuable lesson that product development can take longer than anticipated.

With the product in hand at the end of November, Oehmig has since been in serious discussions with representatives of Clorox and the senior management of other manufacturers. He recognizes that the success of his company will ultimately hinge on whether he can land a licensing deal. “If it doesn’t work out, I’m definitely interested in working with venture capital or private equity firms on investing in early-stage companies,” says Oehmig, who recently interned with Nashville-based venture firm Mountain Group Capital. “I also think I would really enjoy working for a startup company, but a venture capital job might give me a bit more stability while also providing an avenue to stay plugged into the world of entrepreneurship.”

A Great Place to Be an Entrepreneur

As recently as 2009, Christopher Rand, MBA’04, was working in Vanderbilt’s Office of Technology Transfer and Enterprise Development (OTTED), helping the university create and invest in companies based on its faculty’s intellectual property. Today Rand is a Partner at TriStar Technology Ventures, an early-stage venture capital fund that focuses on health care innovation including biotech, pharmaceuticals, personalized medicine, medical devices, health care information technology, and health care services. Both of Rand’s partners have Vanderbilt connections too: Dr. Harry Jacobson, former Vice Chancellor for Health Affairs, and Brian Laden, former Assistant Director in Vanderbilt’s OTTED.

Like NCN’s Tennessee Angel Fund, TriStar is a recipient of TNInvestco funds. During the past year TriStar has used the proceeds from its sale of TNInvestco tax credits to invest in five health care companies. Four of them were already local and one—VenX—relocated to Nashville from Florida to receive funding from TriStar. (TNInvestco rules mandate that companies receiving TNInvestco funds must have their headquarters and at least 60 percent of their staff based in Tennessee within one year of receiving funding.)

“We have seen a great number of opportunities from companies outside the state that are willing to relocate to Middle Tennessee,” Rand says. “Not just in order to receive our investment, but also to take advantage of the strategic value that our group can bring, particularly the connections of someone as well-known and respected as Dr. Jacobson.”

Rand and his partners may no longer work at Vanderbilt, but they are still more than willing to invest in great ideas that come from Vanderbilt researchers. One of TriStar’s other portfolio companies is Pathfinder Therapeutics, a company that has developed a trademarked image-guided device called Explorer to help physicians deliver ablation therapy within soft-tissue organs. The technology behind Pathfinder came from the lab of Robert L. Galloway Jr., Professor of Biomedical Engineering at Vanderbilt. In the company’s early stages, Rand worked with Pathfinder’s current Chief Operating Officer Jim Stefansic, MS’96, PhD’00, who happened to earn his doctorate working in Galloway’s lab.

Rand also represents the close ties between Vanderbilt, Nashville’s venture capital community, and groups like NCN and NEC. While working at the university, Rand joined NCN’s board as a Vanderbilt representative and collaborated with Sid Chambless to get promising Vanderbilt-based entrepreneurial concepts in front of NCN investors. Now Rand looks at NCN’s deal flow more from the perspective of a potential co-investor. In his spare time he also serves on NEC’s finance committee and tries to be a resource for that organization’s members.

Rand would like to encourage more involvement between Owen students and Vanderbilt researchers looking to commercialize their ideas and build business plans. He acknowledges, though, that the students already have plenty of entrepreneurial opportunities— not only through Owen’s efforts to promote entrepreneurship, but also thanks to the exciting business climate that has taken shape in Middle Tennessee in recent years.

Before attending Vanderbilt, Rand worked in Atlanta during the dot-com boom, and that experience has afforded him insight into Nashville’s stature as a business hub. “Atlanta had a pretty entrepreneurial environment back then, but I think Nashville is still a much easier business climate to maneuver in,” Rand says. “It’s smaller, more open and more welcoming. It’s actually pretty easy to get in front of C-level people at almost any company in Nashville. In fact, I believe that the entrepreneurial environment in Nashville now rivals almost any place in the country. With TNInvestco, NEC, NCN, the angel investor community … and other programs at the state level, Nashville and Tennessee overall are simply great places to be an entrepreneur.”

This article and the accompanying sidebars discuss cancer from the perspective of two patients—Professor Gary Scudder and alumnus Michael Oyler—and a caregiver, student Sarah Burfitt. All three express gratitude for the help and encouragement they have received from Owen’s close-knit community, and they hope their stories provide solace for others facing similar journeys.

Imagine going to see your dermatologist and leaving her office knowing you have several swollen lymph nodes. That is exactly what happened to me in early August 2009. I was told “run, don’t walk” to my primary care physician, which I did—the dermatologist’s office even called to make sure I had followed their directions. My physician quickly ordered a CT scan, and it verified that my numerous swollen lymph nodes were likely a sign of some form of lymphoma. It actually took 20 more days until we had the final diagnosis: aggressive stage IV mantle cell non-Hodgkin’s lymphoma.

When any cancer is diagnosed, the words “stage IV” and “aggressive” are not what you want to hear and serve to raise anxiety levels to new highs. Immediately my mind jumped to scary questions like “How long do I have to live?,” “Is this kind of cancer curable?,” and so on. These questions and fears became an everyday part of my life for the next nine months.

At the beginning of September, my wife, Marti, and I met with our hematologist/oncologist at Vanderbilt University Medical Center for the first time. He spent almost two hours explaining my particular disease and his treatment plan: six 21-day cycles of intense chemotherapy. In addition, at the end of these six treatments, I would be having a stem cell transplant, which would renew my immune system with cancer-free stem cells. My chemo regime showed great promise in clinical trials—which, incidentally, weren’t completed at the National Institutes for Health until last month.

During my first month of treatment, it was necessary to identify possible stem cell donors. If I was in total remission, I would be able to use my own stem cells, but if not, a matched donor would be necessary. Transplant recipients have a fatality rate of 15 percent or more, so this was a very anxious time for us. Both of my sisters were tested to see if either was a match and could be a donor. We were overjoyed when the call came that my younger sister was a perfect match! This was the first really encouraging piece of news on our journey.

Thankfully I was spared the extensive side effects of chemo during my treatments. I believe one of the major reasons why was prayer. Yes, I had to deal with low blood counts, increased risk of infection, fatigue and other issues. I also ended up in the hospital twice during my stem cell transplant, going in both times late at night for high fevers. But overall I had little nausea, and my symptoms were not as bad as they could have been.

My first post-chemo scans were not until Nov. 23, or 11 weeks after the start of my treatment. We teach Owen students in our operations courses about managing waiting times and reducing anxiety, but I must admit it was very difficult to wait a week for the results. I felt like I had started a class, so to speak, when I was diagnosed back in August and there had been no feedback on my progress until those tests. It was as if all the weight was on the final exam.

On Nov. 30 we received news that most of my scans were clear, but there was one final result needed before I could be declared “squeaky clean.” My nurse practitioner had told me not to expect anything until the next day, but during her drive home she received the great news that my final scan was clean and called me from her car.

Having determined that I was in total remission, we proceeded with the stem cell collection and transplant. I was thankful that I was able to use my own cells and not those of my sister. The transplant occurred in March after two more rounds of chemo and a final, more intense round to kill my existing immune system. This last one was the hardest to tolerate, but we knew it was necessary for my future health.

As I write this, I have been in remission for more than a year, but doctors do not use the term “cured” for this disease. I am instead “cancer-free” and taking little medicine—a miraculous outcome given where I started in August 2009. I finally came back to Owen full time at the start of the 2010–11 school year, after missing an entire year for my treatments.

Every type of cancer is treated with its own protocol, but the journey for every patient and caregiver has similar highs, and especially lows. The hardest part for me was waiting for and receiving the initial diagnosis. Another low came when the doctor told me about the treatment. I had gone into the meeting with expectations of spending one day every three or four weeks receiving chemo (very typical for lymphoma patients), not four days in the hospital every three weeks. It also took a major change of mindset to adjust to the length of the treatment. There is no such thing as instant gratification when you get chemo—you can’t pay for a next-day cure!

How did I cope throughout the process? It took a lot of support of family, friends, our church, colleagues and the medical community. In particular, my wife and I relied on our Christian faith and took solace in the stories of the many folks who had taken this journey before us.

We want to thank everyone for the outpouring of love we have received. Many of you visited me while I was in the hospital, sent notes through CaringBridge, mailed cards, gave me rides to my semiweekly appointments, and brought us wonderful meals. We were well cared for by the Owen community, including current and past students, faculty and staff. Alums visited from as far away as California and Montana. Another alum sent me a hat to cover my bald head. (Speaking of bald heads, it has been interesting to observe how many men starting chemo are really concerned about losing their hair!)

In addition, I would be remiss not to express our overwhelming gratitude to the Vanderbilt nursing staff on 11 North, and my nurses and doctors in the hematology and stem cell transplant clinic. My care was exceptional!

Finally a special thanks is due to Dean Jim Bradford for his continuous support during this trying season of our lives. He kept me updated on major initiatives during the year, so when I returned to the faculty full time in June 2010, I was still knowledgeable about various aspects of the school.

A fellow mantle cell “journeyer” once wrote to me about blind turns in the cancer treatment process—we know the turns are coming but have no foreknowledge of what is around the corner. Hebrews 11:1 says, “Now faith is being sure of what we hope for and certain of what we do not see.” The first set of scans, the results of the stem cell donor testing, my semiweekly blood tests, my reactions to my treatments—many areas of our journey were filled with these blind turns. We received favorable news at each turn, but that is not guaranteed.

Trials like this change one’s perspectives on what is important in life. People become more important, daily tasks much less so. Trials are used to strengthen us for future trials and enable us to assist others who are suffering. My wife and I are already reaching out to several others making this journey (including Michael and Sarah, who wrote the accompanying sidebars). Please continue to keep us in your thoughts and prayers in the coming months as we pray for a durable remission—one that lasts five, 10 or even 20 years!

Gary Scudder is the Justin Potter Professor of Operations Management and the Faculty Director of International Programs.