Edison Partners Opens Princeton Office Doors to Early-Stage Tech Startups

Esther Surden
Publisher & Editor, NJTechWeekly.com

Chris Sugden, Edison Partners managing partner | Courtesy Edison Partners

If you are a New Jersey tech startup that needs a little advice — on how to find a best-fit business-development expert, how to improve your slide deck, how to hone your business model and what steps you should take to prepare to scale, for example — Edison Partners wants to help.

The venture capital group has declared that it will be holding open office hours with its partners twice during the second week of every month. This isn’t an opportunity to pitch for funding. Rather, it’s is an opportunity to pick the brains and harness the expertise of these Princeton-based VCs.

This is somewhat of a departure for Edison, which invests in companies with $5 million to $25 million in revenues, providing $5 million to $12 million in equity investments.

“We wanted to do this before now, but we got busy with finishing raising our most recent fund, which is closing tomorrow,” said Chris Sugden, managing partner. “We moved to Princeton in October, and our goal was to bring the Princeton entrepreneurial community together in a more active way. The [Princeton Tech] meetup is doing a great job. There is Tigerlabs up the street. And we are trying to do our part as well.

“It’s a little bit of pay-it-forward as we try to help entrepreneurs who may not meet our criteria. We can give them some advice with 30 years of experience behind us.” Edison wants to help entrepreneurs and to make Princeton more of a destination for entrepreneurs who want to start businesses and stay here, he added.

How to Best Take Advantage

Sugden told us that the open office hours will work well for entrepreneurs who have a business plan, or have put some slides together and maybe have a product. Edison wants to help early companies, but not companies that are just an idea on the back of the napkin, or that have three ideas and want to know which one the VC likes.

However, “If you are not sure of your business plan, we can give you some advice on that,” he said.

Edison no longer goes to market based on geography, he said. The partners specialize in particular industries. “What the entrepreneurs who take advantage of office hours will want to know is if the partner” that is holding the hours that day “is in my industry or space. If Ryan [Zeigler] is meeting with a fintech company, that will be a waste of his time. But if Ryan is meeting with a marketing-technology or advertising-technology company, that’s in his wheelhouse.” The industries the partners specialize in are listed on the website. Sugden, for example, is a “fintech guy.”

The new open-office-hour approach is a natural progression for the firm, Sugden said. “We have more than 5,000 companies in our database and keep in touch with more than 1,000 a year.” Then Edison talks to about 1,000 companies a year that are new, he said.

 “So we are talking to companies about their early-stage business development efforts all the time. You never know which ones are going to pop. …We are giving back a little bit, but it’s not all altruistic because we believe there may be a couple of founders we’ll meet in this process that we’ll wind up backing at some point.”

Princeton is a great area in which to start a business, Sugden continued. “We have a lot of smart people in the area, with Princeton, Rutgers, Rider all here. As one of the larger funds in town, we wanted to make ourselves available to businesses.”

The mentoring sessions will work this way: A different partner will be available at each of the sessions listed on the website. So, you’ll know whom you’ll be speaking to on any given day.

Sugden noted that some of the partners already angel invest, and several mentor young companies in their free time. “Kelly Ford Buckley, on our team, mentors the Kitchen Twins,” the young sisters who have an online cooking empire. Princeton-based Theia Senior Solutions uses the Edison offices as kind of a coworking place, and the founder “sometimes hits us up for advice in the hallways.”

Two founders whose companies are based in New York use the Edison space all the time when they are in New Jersey. Sugden noted that, when Edison moved to Princeton, they thought they might create an incubator, but “we didn’t want to get too far removed from our day job.”

New Jersey Investment Climate

NJTechWeekly.com asked Sugden about the investment climate in New Jersey. “Three of our biggest wins ever have been in New Jersey," he said, citing three Bedminster firms: Dendrite,  which formerly provided software to the huge sales forces of pharmaceutical companies; GAIN Capital, a leader in online trading technology; and Premier Health Exchange, now part of Zelis Healthcare (also in Bedminster), which offers advanced network and cost-management solutions for health plans. "We’ve had great success here. I’d venture to say that New Jersey is number one or two of all the states we’ve done business in.”

As a “fintech guy,” Sugden noted that New Jersey has a “big advantage in capital markets and the backups for Wall Street. I see financial technology deals all the time in New Jersey.” He also said that New Jersey, and the East Coast in general, continues to be where the customers are. “There are a lot of big buyers in New Jersey or in New York, so being in New Jersey gives you access to pharma, large retail, telecommunications companies, cable companies, etc.”

Another thing New Jersey has going for it is the talent advantage, said Sugden. “Candidly, the talent advantage” is great. New Jersey is expensive and it’s not cheap to live here, “but people want to live here and they do live here and it’s a really smart, educated population. We see startups able to recruit talent that a lot of times no longer want to do the New York commute.” He added that, as companies begin to grow, they’ll be able to find middle management and executive talent right here.


Esther Surden is Publisher and Editor of NJTechWeekly, and a contributor to Philly Tech News. This article originally appeared in NJTechWeekly, and is republished here with her permission.

Doylestown-based BioClinica may seek sale (Report)

Tom Paine

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Doylestown-based BioClinica's private equity owner is exploring a sale, according to sources cited by Reuters.

BioClinica's eHealth unit is located in
Audubon

The clinical trial management services supplier, which was taken private in 2013 by JLL Partners for $123 million, could be valued at as much as $1.3 billion, the sources suggested to Reuters. It has apparently hired investment bank Jefferies LLC to run an auction.

Since going private, BioClinica has made several acquisitions, the most recent being its January acquisition of clinical trial payments specialist Clinverse, which was backed by Edison Partners. BioClinica is reported to have EBITDA (earnings before interest, taxes, depreciation and amortization ) in the $100 million range.

BioClinica was founded in 1990 as Bio-Imaging Technologies and has over 1200 employees, according to its website.

While several firms in the Philly area have one or more of the tools needed for clinical trials, the key to BioClinica's strategy has been to intregrate several of them.

Bioclinica continues expansion under PE ownership, acquires Clinverse

Tom Paine

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Considerable change has occurred since New York-based PE firm JLL Partners acquired Doylestown-based clinical trial management system (CTMS) vendor Bioclinica in early 2013.

In its latest move announced last week, Bioclinica acquired Edison Ventures-backed Clinverse, which is based in North Carolina.


Bioclinica, which had been a publicly traded company, reported revenue of nearly $100 million in 2012, and was acquired by JLL for $ 123 million.

It was also merged with CoreLab Partners of Princeton when the acqusition closed. In 2014, it merged with California-based SYNARC. At that time, the combined company said it would be a leader in four specialized areas of outsourced CTMS:

• medical imaging services that track the effectiveness of new drugs across multiple therapeutic areas, including oncology, neurology and musculoskeletal.

• an extensive worldwide network of research centers dedicated to recruiting patients for global trials.

• state-of-the-art technology and consulting services to support the overall drug development process, as well as services to monitor the cardiac safety of compounds under development.

• It also will offer central lab capabilities to analyze biological samples originating from clinical trials.

Bioclinica also made some smaller acquisitions in 2014-15, and one presumably reliable source reported 2014 revenue at over $200 million. At the end of 2014, long-time CEO Marc Weinsten departed, to be replaced by Dr. John Hubbard, who joined from Pfizer.

Last week, BioClinica announced it was acquiring Clinverse, a Durham, North Carolina-based provider of automated payment systems for clinical trial participants, as well as medical professionals making or receiving payments through involvement with trials. No terms were disclosed, and no financial data has been found for Clinverse.

New Jersey-based Edison Partners had led a $9.1 million Series C round in Clinverse in August 2014.

While some other payment tech firms dabble in the clinical trials market, the two main direct competitors to Clinverse are King of Prussia-based Greenphire and CFS Clinical of Audubon, which was acquired by DrugDev in 2013.

The 'Sunshine Act' reporting requirements, which went into effect in 2013, requires manufacturers of drugs, medical devices and biologicals that participate in U.S. federal health care programs to report certain payments and items of value given to physicians and teaching hospitals. This reporting need is the other side of the value proposition for the clinical trial payments vendors. Similar regulations are expected worldwide, although they may have been slower to materialize than expected.

Its not clear who is leading among the three clinical payment competitors, though Bioclinca must have liked what it saw in Clinverse's numbers. Greenphire ( see my 2013 profile )  in which PE firm The Riverside Company owns a controlling stake, reported revenue of $8.5 million in 2014, according to the Inc. 5000, up from $5.4 million in 2012. It moved into larger King of Prussia quarters in early 2015 and announced a goal to increase employment from 65 to 100 by year's end (LinkedIn currently shows 85). It just issued a release claimng "unprecedented year over year growth." CFS Clinical had 2012 revenue of $11 million, according to the Inc. 5000, though its a somewhat older business with a different revenue mix.

The Triangle Business Journal describes how the match between Bioclinica and Clinverse came to be. One issue that comes to mind is to what extent Clinverse will be able to serve the external market, rather than having all its energy sucked up by internal Bioclinica issues.

Edison Partners returns fire at out-of-town critics at IMPACT '14, but tends to find most of its own deals elsewhere

Tom Paine

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In a blog post entitled "Where's the Love for the City of Brotherly Love?", Edison Partners (Lawrenceville, NJ) General Partner Michael Kopelman wrote about how a panel of out-of-town VCs at 2014 IMPACT Capital Conference in Philadelphia late last month "dissed"(my words) the Philadelphia startup scene, paraphrasing their comments as saying "the Philadelphia region doesn’t have enough great companies, nor great entrepreneurs, to justify their 70-minute train ride or flight down from NYC or Boston."

The purpose of having an out-of-town panel(none of whom have closed a deal here) was to give Philly attendees an idea of how outside investors view the startup community here.

Kopelman then recites all the great companies Edison has helped build in Philadelphia over 30 years (true) that have been acquired, including Fiberlink (acquired by IBM), Verilogue (Publicis), Cadient (Cognizant), VirtualEdge (ADP), and Octagon (Accenture).

But Edison has not invested in a Philly metro-based company in quite some time. In fact, going through Edison's own funding announcements and CrunchBase I didn't find a single one going back to 2010, when there were follow-on rounds in some existing portfolio companies (including Health Market Science, which coincidentally announced today it was being acquired. Please let me know if I missed any.) There aren't too many Philly firms remaining in Edison's portfolio other than Neat Company, which I recently profiled. Also, there's Hamilton, NJ-based Billtrust, which took on Bain Capital Ventures as its lead investor two years ago, and Miria Systems of Media, PA. There were a couple of other small investments in central New Jersey.

When Edison raised its $249 million seventh fund in 2012, there were expectations it would deploy some of that capital in Philadelphia-area ventures. I'm not knocking Edison, which has an excellent track record (not believing in an overly provincial approach to VC investing), and I'm sure its people cover the region closely, but in fact most of Edison's recent investments have taken place in New York, Northern NJ, DC, with a few scattered in the midwest and south.

Neat, after period of organizational changes, seeks broader market; Partners with HP on productUpdate 11/5: Announces new CEO

Tom Paine

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The Neat Company and HP announced in late September that HP was bundling Neat's Smart Organization System, the cloud-based scanning and information extraction and storage tool, with HP's Officejet 8040 printer. The partnership is a first for Neat, which has sold its products separately through retail and online channels in the past. Neat is not contributing any hardware, but only its cloud software service.

The HP Officejet 8040 with Neat e-All-in-One Printer is available in the United States for a starting price of $399 in retail stores and online. That includes a three-year subscription to the NeatCloud service.

The recently announced intent to split HP into two companies is not expected to have any impact on the product, which will fall under HP's proposed Printers and PC business.

Whether the bundling of its products with others will be a major boost for Neat remains unclear, but the HP arrangement continues a shift away from hardware towards software which has been occurring for some time, although Neat Vice President-Product Management Chris Barbier stressed in an interview with Philly Tech News that it is still very much in the hardware business and the HP offering doesn't replace any existing Neat product.

Neat has gone through many changes over the past two years, since reporting revenue of $110 million in 2012. Almost the entire senior management team has turned over, and Ron Kaiser, a board member since 2012 who has served with other Edison Partners (Neat's principle investor) ventures, replaced Jim Foster as interim CEO late last year, though Foster is still on Neat's board (correction: Foster is no longer on the board, though the company tells me the relationship is amicable). A Neat spokesperson tells me a new permanent CEO will be named soon.

Comments on Glassdoor (admittedly not always a reliable indicator) do suggest with some consistency that 2013 was a rough year organizationally and financially, although no update on the financial picture was offered by the company. But it did provide this response to my inquiry:

"Last year Neat accelerated the company’s efforts toward its cloud strategy – opening up an entirely new chapter in the company story. The release of NeatConnect (already one of the Nations’ leading Wi-Fi scanners) and the advancement of NeatCloud and Neat’s mobile application took precedence over our traditional hardware and desktop software. Integrating our cloud capabilities into other manufacturers’ hardware is another example of our evolved approach. That evolution has been reflected in the changing interests and skill sets of the Neat team over time.”

Neat's total customer base, I confirmed, has roughly doubled from the 1 million that it indicated it was at when I spoke with them about two years ago.

Bsrbier said Neat is placing more emphasis on the SME (small and medium enterprises) segment in addition to the SOHO (small office, home office) segment, but is not going after the large enterprise segment. The HP announcement seems targeted more at the SOHO market, though. I see some indications that Neat might be over its rough spot (though no confirmation), and its WiFi-enabled NeatConnect product introduced late last year was well received. Barbier indicated Neat may expand its applications to encompass other accounting and customer relations management tasks.

Edison could be looking towards a future exit strategy for Neat, though I'm not sure if Neat is a strong enough or broad enough standalone play for an IPO right now. Perhaps a sale to a larger company could occur, but a combination of companies with complementary technologies serving the SOHO & SME markets might be intriguing. In the mean time, it might try more joint product partnerships.

Update November 5: Neat names Jeff Dickerson Chief Executive Officer.

Update November 11: Neat Announces Seamless Integrations with Intuit’s QuickBooks Online