It turns out that you can do well while doing good. Yesterday’s Initial Public Offering (IPO) of Athenex stock at $11 a share is a win for a number of WNY investors, including Insyte Consulting and our partner organizations in the Western New York Business Development Fund (BDF) which Insyte helped create. Although the availability of startup funding has increased with the success of 43North, Z80 Labs, LaunchNY and our burgeoning entrepreneurial ecosystem, back in 1999 there was severe a lack of funding, especially seed capital, for WNY start-ups. Insyte recognized this problem and created the BDF, an innovative collaboration with the UB Foundation, the Erie County IDA, NYS’ Small Business Technology Investment Fund and the Amherst IDA to invest in early stage start-ups. The BDF was more a public service—aimed at encouraging start-ups and entrepreneurial activity in WNY—than an investment vehicle. According to Jack McGowan of Insyte, “Our primary goal was to encourage entrepreneurs and start-ups in WNY, especially those leveraging intellectual property from UB and other area institutions. Of course, we also hoped to generate a return to re-invest in additional companies.” Athenex has followed that plan perfectly, starting with the licensing UB intellectual property developed by Dr. David Hangauer to fight cancer. The BDF invested $200,000 in 2005 which is now worth almost $1.5 million after Athenex’s IPO. The BDF made a number of other investments, too, ultimately funding $1.2 million in 10 WNY start-ups. Six of the BDF’s portfolio companies have already been written-off making Athenex the exception that proves the rule. “You’re lucky if one investment in ten is a home run,” says McGowan, “because that one needs to pay for all the other investments that’ll never make it. We’re pleased that a few of the remaining companies in the portfolio are continuing to make progress and may someday provide additional financial returns.” In addition to the BDF, Insyte continues to support the WNY entrepreneurial ecosystem in many other ways, including providing SBIR/STTR guidance and serving as executive director of the WNY Venture Association, its Buffalo Angels affiliate and the Buffalo Angel Fund.
