Industry Veteran Casabona to Spearhead NJ’s First Tech Accelerator

Esther Surden
Publisher & Editor, New Jersey Tech Weekly

N.J. is getting its first tech accelerator, called TechLaunch, funded by a partnership between the New Jersey Economic Development Authority (EDA) and private equity and founded by tech industry veteran and angel investor Mario Casabona. Casabona’s proposal was selected from a field of six prospects interested in starting a tech accelerator in N.J. after the EDA announced last year it would be seeking proposals. A competitive solicitation for a fund manager was released in October 2011. While the field was narrowed to two competitive bids, Casabona’s proposal was the only one deemed complete, EDA CEO Caren Franzini said in a memo to the board. Casabona’s company, “addressed all evaluation criteria and was the highest-scoring application,” she added.

Hosted by TechLaunch, the LaunchPad intensive business boot camp-type program is prepared to sponsor its initial class later this year at Montclair State University. The accelerator expects to mentor 12 companies in its first year, making average investments of $18,000 per company. The EDA is contributing $150,000 annually for three years, while TechLaunch will add $300,000 in matching funds each year. In exchange for its investment, TechLaunch will receive a 10 percent equity position in the fledgling companies.

A conference will be held to introduce the 12 company teams to the entrepreneurial community, then the 12-week LaunchPad boot camp will provide the selected startups with business training, networking with mentors and potential strategic partners, talks by guest speakers, exposure to panel discussions and professional development and technical help to develop their products. After the three months, the companies will demonstrate their products and make an investor pitch for potential follow-up funding. TechLaunch will follow the successful model of other tech accelerators, such as Dreamit Ventures, TechStars and Y Combinator.

While there is no requirement for LaunchPad graduate companies to remain in N.J., it is clearly the state’s hope that they will settle here. Franzini said, “We are embarking on a competition for innovation to reveal N.J.’s entrepreneurial strengths, using a model that provides a potential return on the EDA’s investment and allows N.J. to compete with neighboring states to maintain and attract technology talent.” Casabona said entrepreneurs with great ideas who want to compete for an accelerator spot do not have to come from the Garden State, “but we want them to be in N.J. and will try to provide incentives for them to stay.”

In an interview with Casabona was extremely enthusiastic about this new project, pointing out that he came out of retirement to take it on. He successfully sold his own company, Electro-Radiation (Fairfield), to Honeywell in 2004 and then continued on at Honeywell until 2007. Since his retirement, he has been involved in angel investing through Casabona Ventures (Kinnelon) and is chairman of Jumpstart NJ Angel Network.

Casabona explained he was inspired to create the accelerator by the passionate entrepreneurs he has met at NJ Tech Meetup (Hoboken) and NY Tech Meetup. By launching an accelerator, he and his team “will have the opportunity to select the ideas and the company teams,” and, after selection, “the opportunity to put them through a training process, a business boot camp where you can actually influence their creation. I saw this as an opportunity to add value” to N.J.’s startup technology process. For the entrepreneurs and TechLaunch as a company, “the outcome can be very rewarding.”

He continued, “My sorting parameters are that the company must have an innovative idea and a great team, and needs to be able to go through the boot camp process, develop a demonstration in three months and then give an investor pitch. We have an abundance of great ideas and entrepreneurs, but the real question is, What can you build and demonstrate in 12 weeks?”

The companies that can build a prototype within this limited timeframe are primarily in IT, digital media and Internet technology, in any consumer-facing industry, Casabona said. The companies will also need to demonstrate a reasonable valuation at the end of the 12 weeks. “We are putting in $18,000 at the beginning of the boot camp, for a $180,000 valuation. We are hoping that by its end, the valuation will be significantly higher. We will have actually ‘de-risked’ the startup obstacles,” Casabona noted. Ultimately, the proof of the concept’s value to the state and Casabona will be how many companies graduate from LaunchPad and receive offers for additional funding.

Asked whether the process of dealing with the EDA was cumbersome, Casabona replied he was used to providing the Department of Defense detailed requests for proposal (RFPs) from his days at Honeywell, so the process seemed reasonable. “I became aware of the EDA initiative last year and at that time wrote a proposal outlining how I would execute the accelerator’s creation.”

“Based on feedback the EDA got from industry and its legal department, it chose to release a competitive proposal in October. At that point, I decided to write a full-blown proposal, with details about exactly how the accelerator would be executed and whom the members of my team would be. Some clarifications were requested, which I provided by the middle of January.” One frustration: “They really ran it as a competitive solicitation; no feedback whatsoever,” Casabona said, so it was just a matter of how a competitor interpreted the RFP.

Casabona is enthusiastic about the accelerator’s location at Montclair State, which has the facilities, technical and administrative support, dorms and, more important, access to New York the tech entrepreneurs will need, he said. “New York has Internet Alley,” he added, and the accelerator will need to attract that caliber of entrepreneur.

Casabona is excited about the company’s prospective team. The executive director will be a new hire, he said, and while the accelerator has identified the person it wants, the company has thus far declined to release the name. Creating and supporting the boot camp’s curriculum will be Mary Howard of Design Technologies (Guilford, Conn.), a professional experienced in this area, Casabona said. “We are in the process of bringing aboard sponsors, mentors and guest speakers,” he added.

Esther Surden is Publisher and Editor of New Jersey Tech Weekly , and a contributor to Philly Tech News. This article originally appeared in New Jersey Tech Weekly.


BuySide Partners breaks off from A-Frame to focus on large DoD opportunity

Tom Paine

I wrote a piece last year about A-Frame Technology Services, a King of Prussia-based firm which helped businesses and government agencies manage very large application development projects. Actually, A-Frame had two sides: one focused on the commercial market, and another focused on the government (specifically, the Department of Defense) sector named A-Frame Technology Assurance. The latter has now broken off into an entirely separate entity named BuySide Partners, reflecting the emphasis on who they represent.

A-Frame Technology Services continues to serve the commercial market.

BuySide Partners has an experienced team led by Managing Partner Chris Panaro, a founding principal at A-Frame Technology Assurance, who has more than 25 years of experience in developing and implementing best practices in procurement, contracting, and operational process methodologies. Also with BuySide is Bob Moyer, who co-founded and grew Aston Brooke and Aston Brooke Software which was ultimately sold to Platinum Technologies, and founded software company FullTilt Solutions that specialized in enterprise product information management (acquired by QAD in 2008). The team also includes John Zettler, a pricing and contract finance specialist with expertise in IT services and enterprise software acquisition, and Tom Crawford, an IT contracting specialist who led and grew business units at SAP, PeopleSoft, Oracle, and BMC, and also served as CEO of Cyber-Ark, a security software firm.

The timing of this reorganization coincides with the firm's ten-year relationship supporting the DoD’s IT sourcing initiative (known as DoD ESI or Enterprise Software Initiative). DoD ESI is an official Department of Defense program sponsored by CIOs from all military departments and civilian agencies that helps IT buyers obtain the best value on commercial software, IT hardware, and services. DoD ESI coordinates agreements with IT providers, resulting in a unified contracting and vendor management strategy across the entire department. The initiative claims to have achieved cost avoidance of $4 billion over the past 12 years.

Some of DoD's enterprise application projects are huge, multi-billion dollar undertakings, are very complex and often face enormous challenges. Examples are SAP's Army project and Oracle's Air Force project, which are both troubled according to some reports. BuySide does not manage specific enterprise application implementation projects for DoD, but rather consults on overall strategies and methodologies for project and vendor management, and develops specific systems to assist in this process. DoD ESI recently launched a pilot of its Products & Pricing Portal, developed by BuySide. The portal provides a new capability for IT buyers across the DoD to access, sort, and analyze product and pricing data for commercial software applications. The pilot release covered products available from Adobe, Gartner, iGrafx, Microsoft, Minitab, PowerSteering, and RWD. When fully deployed, this tool will provide access to over 50,000 commercial software products and IT services offered by DoD ESI vendors. In addition, a private price-benchmarking tool was developed by BuySide to provide DoD buyers with actual prices paid for thousands of IT products. This capability was developed in rapid response to a House Armed Services Committee report recommending that the military departments and civilian agencies share pricing data before purchasing any IT assets.

As part of the Obama Administration's efforts to rein in Defense spending, DoD's IT budget has not escaped cutbacks. The President's new budget calls for DoD's IT budget to decline from $38.6 billion in fiscal 2012 to $37.2 billion next year. While these cuts will put pressure on systems vendors, it potentially creates greater opportunities for a firm such as BuySide Partners, since it focuses on finding more efficiencies for the buyer.

Another huge issue facing Federal IT in general is the Cloud. Last year, Federal agencies were asked by then CIO Vivek Kundra to pursue a "cloud-first" option when evaluating technology purchases. Now, that initiative has been expanded with a recently announced "Shared First" program which prioritizes the sharing of both government and commercial Cloud resources for Federal systems. While BuySide has played a role in getting DoD up to speed on Cloud options, Managing Partner Panaro pointed out in an interview with Philly Tech News that there are many complications in moving DoD apps quickly to a Cloud environment. One issue is the security requirements, which are obviously more rigorous in the Defense sector than in other areas. The other issue is the complexity and size of and length of time to implement the huge enterprise applications that major DoD agencies use. Quicker Cloud adoption is more likely for smaller, new applications that may work in a hybrid manner with large on-premise apps.

A current proposal backed by the Defense Business Board, comprised of private-sector executives, would consolidate more control over the agencies under the office of DoD CIO Teri Takai and establish a coordinated, integrated strategy for data center consolidation and cloud computing at the department level.

Panaro sees a considerable growth opportunity for BuySide within its existing business model. He says that the firm will continue to focus on its specialized knowledge of the DoD IT market, although expansion into some other areas of the Federal goverment is a possibility. One recent research report estimated the total size of the Federal IT market as being $518 billion over the 2013 – 2018 time frame, growing at a 3% annual rate.


Daily Links 3/2/2012: Report: Rendell says PMN bid is in

It’s baaaack. Net neutrality to get its day in court (Gigaom)

Ed Rendell: Philly Inquirer bid in today (Politico)
Although you must remember, Rendell is sometimes quoted as saying things he really didn't intend to say.

NextFab plans larger studio, cafe on Washington Ave. ( Philly Deals)

East Coast venture capital firm sets sights on SaaS investments (Med City News)
On Edison Ventures.

Pa. Insurance Dept. gets $33M for health insurance exchange (Central Penn Business Journal)

MetaLayer launches community to make better infographics (exclusive) (VentureBeat)
metaLayer, currently based in DC, was in last Fall's DreamIt Ventures class in Philadelphia. It will participate in the Demo Pit at the Phorum 2012 Cloud Computing Conference in Philly on March 28.

Broadcasters don't like "tiny antennas," sue TV streaming startup (Ars Technica)
First Round Capital was an early backer of Aereo.