At SXSW, Western Pa. partnership to tout region's ability to revolutionize products
One way to gauge Pittsburgh's popularity among venture capital firms is to look at the RSVP list for a March 9 party in Austin.
The Pittsburgh Technology Council and Carnegie Mellon University are hosting an event to promote Western Pennsylvania startup companies during the annual South by Southwest music, film and technology festival in the Texas city.
“We put out a note and in two weeks, 800 people registered” ranging from prospective investors to representatives from Apple and Google, Brian Kennedy, a vice president with the tech council, said Friday.
Pittsburgh's profile among firms that put money into startups appears to be rising. The National Venture Capital Association ranks the city No. 12 for the number of investments made in local companies in 2012, with 76 deals totaling $167.41 million.
That's far behind San Francisco's 636 deals totaling $5.64 billion. Local leaders know they can't reach Silicon Valley's level, but in five or six years it might reach No. 11 Austin's level of investment at around $625 million, Kennedy said.
Pittsburgh “at one time was a flyover” for out-of-town investors, said Rich Lunak, CEO of Innovation Works, a South Side organization that helps new businesses.
But online apparel retailer ModCloth, information technology company Avere Systems and baby products maker 4Moms and others are drawing national attention, as are the city's research universities and business support network. Strip District-based 4Moms' Origami power-folding stroller that lights a path and even charges cellphones appeared in a Honda Civic ad that aired during the Super Bowl, for example, Lunak said.
“Increasingly, out-of-town investors are taking note of the great opportunities we have,” he said. About 70 percent of venture capital raised in Western Pennsylvania comes from outside the region, Innovation Works said, and the venture association's numbers don't count “angel” investments by individuals.
Sarjoun Skaff, a founder of Bossa Nova Robotics, with research and development offices in the Strip District, notices more local companies drawing investments from outside of Pennsylvania.
“This is interesting, because investors typically prefer to invest close to home to minimize travel to board meetings and business emergencies,” said Skaff, whose San Francisco-based company is developing robots to interact with humans.
Once a firm makes a first investment, he said, “it becomes easier to make a second, as that doesn't really increase their travel requirement.” Still, more locally based venture capitalists are needed to continue growing technology companies here, he added.
Sam Landman, principal with Comcast Ventures, part of the media and cable giant, said while the San Francisco-based unit invests nationwide, Pittsburgh “in the last decade or two has seen a revival in terms of quality of life and commitment to the city.”
Comcast Ventures took part in a $12 million funding round for BodyMedia Inc. of Downtown, which develops wearable body monitors.
The technology council is reaching out to new, top-tier funders as well as firms that already have investments here to see if they'd like to do more, Kennedy said.
AOL Ventures “called to ask us to help facilitate introductions to some cool, CMU-related spinouts. They spent a day with us two weeks ago,” he said.
“I was interested in getting closer to the Pittsburgh community in part because of CMU,” said Nic Poulos of AOL Ventures. “It trains some of the world's foremost coders and technologists.” And while his firm hasn't invested here to date, “We certainly believe in CMU's and the city's ability to generate disruptive businesses.”
Kim Leonard is a staff writer for Trib Total Media. She can be reached at 412-380-5606 or firstname.lastname@example.org.
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