Realizing that vision is a long way off, but it starts with investment funding to prove the Carnegie Mellon University chemistry professor’s idea works, then to move the technology out of his Mellon Institute lab in Oakland and into the marketplace. And despite the economic upheaval caused by the new coronavirus, Pittsburgh-area experts say investments are continuing in high-risk, high-reward projects like Mr. Ly’s.
“When there’s disruption in the market, opportunities always emerge,” said serial entrepreneur Don Morrison, who is also co-chair of deal flow at Blue Tree Allied Angels, a Wexford-based private equity investor group. “It’s really about execution, never about the technology. It’s the business model. That hasn’t really changed.
Pittsburgh’s fledgling startup economy stuttered with investors turning to protection of existing investments with the outbreak of COVID-19, a highly infectious respiratory disease that shut down commerce, university campuses and medical procedures for two months before government mitigation efforts began easing in June.
But investor interest in promising startups is perking up, Mr. Morrison said.
Or maybe it never really went away.
For 15 years, Mr. Ly, 48, has been working to refine technology that allows rapid identification of pathogens, and preliminary testing shows his system works. He recently received a $300,000 grant through the Mellon Foundation. Mr. Ly’s research is a long way from becoming the core of a commercial enterprise, so his search for funding to confirm the early lab results continues.
In the meantime, Mr. Morrison said Blue Tree Angels is also continuing to search, this time for early-stage companies for investment. And North Shore-based small business accelerator Innovation Works is distributing $2 million to its portfolio companies to help them through the COVID-19 downturn. As many as 40 companies will receive the new investment money, which was distributed by the Ben Franklin Technology Development Authority.
Innovation Works has also created a COVID-19 Relief Fund to help other startups through the economic downturn.
“It’s been tough for startups, sure,” said Innovation Works spokeswoman Terri Glueck. “Good companies get funded in good times and bad.”
Entrepreneurs took a hit with the spread of the new coronavirus starting in March.
In a survey done in April, San Francisco-based research and policy advisory group Startup Genome found 41% of startups globally had less than three months of cash available, up from 29% pre-pandemic.
Almost three-quarters of startups surveyed had to terminate full-time employees as a result of the COVID-19 outbreak, underscoring the frailty of the startup ecosystem.
But new business applications in Pennsylvania through May 23 rose to 2,280, a 5.6% increase from a year ago, according to the Census Bureau, so entrepreneurs aren’t stopping.
At the AI Robotics Venture Fair at CMU in May sponsored by Innovation Works, 30 companies, including many from the Pittsburgh area, pitched investors, Ms. Glueck said. Following the presentation of investment opportunities, there were hundreds of followup discussions between investors and entrepreneurs, indicating robust interest in the city’s startup offerings.
Mr. Ly, an entrepreneur, recognizes the difficult road for life science companies, many of which quickly fold. Still, he’s committed to making his molecular testing widely available as he waits for a patent to be issued for the technology.
“These infectious pathogens pop up left and right,” he said. “They really don’t vanish. I’m never going to give up on this concept.”
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