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November 14, 2013 (Baltimore, MD) – Governor Martin O’Malley announced today that EnerTech Capital Partners and Foundation Medical Partners (FMP) have been selected to receive funds through the State’s $84 million InvestMaryland program. The venture capital firms will invest $10 and $7 million each in young, innovative Maryland companies. As part of the agreement, the firms will return to the State’s general fund 100 percent of the principal and 80 percent of the proceeds from successful investments. Created by Governor O’Malley and the Maryland General Assembly in 2011, InvestMaryland is a historic initiative to fuel Maryland’s Innovation Economy, support entrepreneurs and stimulate job creation.

“Maryland is committed to investing in the entrepreneurs, startups and small businesses that will soon become the leaders of our growing Innovation Economy and we are excited to have EnerTech and FMP join us in that effort,” Governor O’Malley said. “InvestMaryland leverages the capital and expertise of the private sector to support young Maryland businesses as they grow and create family-sustaining jobs for the people of our State.”

“Venture capital and knowledgeable investors can mean the difference between success and failure for young companies, even those built around promising ideas and innovative technologies,” Business and Economic Development Secretary Dominick E. Murray said. “InvestMaryland is just one more advantage Maryland has in the life sciences, social media, cybersecurity, big data, green energy and other high-tech fields. We look forward to working with EnerTech and FMP as they make their investments.”

“EnerTech has been investing in Maryland since shortly after our founding in 1996. We are delighted to be selected by the InvestMaryland team and welcome their participation in our final close of EnerTech Capital Partners IV,” said Tucker Twitmyer, Managing Director of EnerTech. “The State has an impressive track record in our sector and we look forward to helping Maryland’s workforce create the next generation of real energy solutions — for Maryland and for the world.”

EnerTech invests in early to growth-stage companies that offer products or services that make energy production and consumption more efficient, reliable, and cost-effective. The firm has managed about $500 million since its founding in 1996. Its current fund, in which InvestMaryland is a participant, is approximately $120 million. EnerTech’s portfolio ranges from Tangent Energy Solutions, a company that makes industrial sites more energy efficient, to n-Dimension Solutions, a cybersecurity firm focused on critical infrastructure.

FMP invests in the healthcare technology sector, focusing on transformational technologies and services that enable value-based healthcare and leverage wireless, data and analytics technologies. Its portfolio includes a diverse set of companies specializing in healthcare informatics, medical device development and innovative diagnostic technologies. FMP is still in its fundraising phase and could not comment on its new fund.

InvestMaryland is the largest venture capital investment in history by the State. Last year, $84 million was raised for the program through an online auction of tax credits. Of that funding, two-thirds will be managed by private venture firms like EnerTech and FMP. So far, $48 million has been committed to seven firms. The remaining third is being invested by the state-run Maryland Venture Fund (MVF).

The MVF was seeded with $25 million and over its 17-year existence invested in hundreds of start-up and early stage technology and life sciences companies, generating a $67 million return, 2000 jobs and more than $1 billion in private investment. Returns from MVF investments are reinvested in the program.

The second annual InvestMaryland Challenge is in full swing. If your business is in need of a jump start, check out this site for more information about the national business competition. The Challenge offers applicants free admission to networking events, social media promotion, scoring and feedback from judges, exposure to venture capital firms and angel investors and the chance to compete for more than $600,000 in prizes. Winners of the Life Sciences, IT, Cybersecurity and General Industry categories will each win $100,000 awards. Others will take home smaller grants, incubator space, consulting services and other cash and in-kind prizes. Applications are due by Dec. 6.

Judges include a distinguished lineup of industry leaders and experts in a variety of fields. Meet a selection of judges below.

Meet The Judges:

IT-robDoub

ROBB DOUB

Robb Doub joined New Markets Venture Partners in 2003. Robb is the lead administrative partner and serves as a board director for eCoast Sales Solutions and Appfluent Technology, and is lead partner or board observer for K2 Global, Kroll Bond Ratings, Navtrak, Three Stage Media, CSA Medical and TidalTV. He also serves on the board of Egeen International and the Conflicts Advisory Board of the off-shore hedge funds.

IT-daphneDufresneDAPHNE DUFRESNE

Daphne Dufresne joined RLJ Equity Partners from Parish Capital Advisors, where she was a Venture Partner managing the direct investment and co-investment program. Formerly, Ms. Dufresne was a Principal at Weston Presidio Capital with $3.4 billion of assets under management. She also served as Associate Director in the Bank of Scotland’s Structured Finance Group. Ms. Dufresne received her B.S. from the University of Pennsylvania and her M.B.A. from Harvard Business School.

LS_Christy_W_WyskielCHRISTY WILLIAMS WYSKIEL

Christy Williams Wyskiel is an entrepreneur and investor with 20 years of experience focused on the life sciences and healthcare industries. Previously, Christy was Managing Director at Maverick Capital, an equity hedge fund with $12 billion under management. She co-founded GrayBug, an ophthalmic drug-delivery company. In 2012, Christy joined the Johns Hopkins Alliance, a board charged with evaluating the commercial viability of research projects at JHU.

CS_Frederick_FerrerFREDERICK J. FERRER

Frederick J. Ferrer has over three decades of experience in the National Security, Intelligence Community (IC), Homeland Defense and Cyber. Mr. Ferrer holds a Master’s of Science in Strategic Intelligence from the National Intelligence University and serves in a number of leadership capacities, including the Maryland Commission on Cybersecurity Innovation and Excellence; National STEM Consortium Advisory Committee; and Chesapeake Regional Tech Council.

GEN_Deb_TillettDEBORAH TILLETT

As the Executive Director and President of the Emerging Technology Center in Baltimore, Ms. Tillett is responsible for management of budgetary, administrative, programmatic functions and strategic planning. Prior to joining ETC, Ms. Tillett served as president and co-founder of Immersive 3D, LLC, a technology start-up providing web-based 3D computer gaming solutions for K-20 education and offering contract-based technology services.

See the full list of judges and submit your application on InvestMarylandChallenge.org.

Dozens of entrepreneurs—ranging from seasoned business leaders to first-time startup launchers—sat down to breakfast together this week in Baltimore. 

The Maryland Entrepreneur Breakfast, sponsored by the Maryland Department of Business and Economic Development, honored Maryland’s Inc. 500 I 5000 fastest-growing private companies and showcased representatives of the state’s vibrant and diverse entrepreneurial community.

In total, 19 Maryland companies made the top 500 of Inc. magazine’s 2013 list, several of which were recognized during the event.

Ellicott City-based GiftCardRescue.Com ranked 151st on the list with 2,518 percent growth and $6.6 million revenue in 2012. CEO Kwame Kuadey praised Maryland’s investment in early stage companies.

“The first five years, as we know, are critical, and for me, even at this stage, having gone on five years, you still have different challenges at the level you get to, especially if you’re growing, and to have resources and incubators in the area that can help startups that are promising, I think is critical,” Kuadey said.

Jessup-based TheraPearl, which ranked 210th on the list, experienced 2,017 percent growth and $5 million revenue in 2012. CEO Daniel Baumwald spoke about the role of state agencies in the company’s expansion effort.

“DBED has been fantastic for us with our global launch. I’m in talks with a lot of the folks down there about all of our globalization, and how we can take [TheraPearl] to Europe, to Asia, Australia, etc.,” Baumwald said.

Maryland DBED Secretary Dominick Murray emphasized that attendees were the evidence behind the state’s No. 1 ranking for entrepreneurship and innovation by the U.S. Chamber of Commerce.

“At DBED and the Economic Alliance of Greater Baltimore and the GBC and the Greater Washington Board of Trade—all of us are able to talk about our No. 1 status in this realm, and that’s because of what you guys do,” Murray said.

Find video highlights from speakers in the above video.

Maryland government agencies have a history of funding worker training projects, but never before has training been made so widely available across an entire industry.

Under the direction of the Maryland Department of Labor, Licensing and Regulation, the EARN (Employment Advancement Right Now) Maryland Workforce Training Initiative is now offering an unprecedented opportunity for business leaders to form partnerships and offer the type of training needed to significantly increase worker productivity.

The first step is filling out an EARN Maryland Planning Grant application, which first became available on Oct. 15 and must be submitted by Nov. 12, 2013. Lead applicants will apply for $25,000 to fund the creation of a Strategic Industry Partnership Workforce Training Plan. There is no limit to the number of these grants the state will issue.

Between November 2013 and April 2014, the funding will assist the lead applicant in forming a partnership with fellow key players in their industry. Many will take advantage of professional membership organizations that already join business leaders together according to their shared interests. Through conferences, meetings and training sessions, they will determine the type of training needed most among workers in their industry and submit their requests for training programs.

By May 2014, DLLR will award implementation grants for approved Strategic Industry Partnership Workforce Training Plans.

The lead applicant for the initial $25,000 planning grant can fall into any of the following categories:

• Employer
• Nonprofit organization
• Two- and four-year institution of higher education
• Local Workforce Board
• Industry association
• Labor union
• Local government
• Local or regional economic development entity

While the initiative is the first of its kind in Maryland, similar programs have succeeded in Colorado, Pennsylvania and Wisconsin, and have already assisted workers in industries including aerospace, healthcare and clean energy. More information on their best practices is available through DLLR.

Those seeking more information should consider watching webinars on the program through DLLR’s website or attending a statewide Pre-Proposal Conference at 1 p.m. on October 18 at the Anne Arundel Community College, Robert E. Kauffman Theater, 101 College Parkway, Arnold, MD 21012.

Keep up with the latest Maryland business news.

Are you a 20-steps-or-less Rubik’s Cube master, or do you enjoy the more time consuming guess-and-check method? While puzzles make for popular toys, they also reflect the way we confront everyday societal needs like energy security.

The Maryland Clean Energy Center will present the Maryland Clean Energy Summit, held Oct. 15-16 at the Marriott Inn & Conference Center in Hyattsville. The summit is themed, ”Solving the Distributed Energy Puzzle: Microgrids & Other Smart Solutions,” with an emphasis on energy security.

Expert presenters will discuss clean renewable power, transmission, distribution and resiliency. “With the application of communications technology to manage this critical infrastructure for cost savings, reliability, security, and greenhouse gas emissions reductions, the ‘democratization of the grid’ is becoming a reality,” according to the event website.

Online registration continues until Oct. 15, with entry cost for selected events starting at $150.

Industry and government leaders gathered Oct. 8-9 for CyberMaryland 2013, sponsored by the Maryland Department of Business and Economic Development. The event showcased the state’s growing cybersecurity industry, challenged professionals and students and fostered networking. Find more information on the conference here, as well as the winners of the Maryland Cyber Challenge here.

Mikra Krasniqi is an economist at the Maryland Department of Business and Economic Development.

The federal government shutdown will have an adverse effect on the entire United States economy and especially the Washington, D.C. area. While federal government civilian and military spending makes up about 4 percent of U.S. economic output and federal employment contributes with about 2 percent of all jobs, the effects of the shutdown might have far-reaching consequences given the tenuous state of economic recovery from the recession.

Figure 1 Federal Civilian Employment by State

Source: DBED, BEA 2012

With 6 percent of all jobs in the state, Maryland’s share of federal employment is higher than most states. Over 80 percent of Maryland jobs are in private sector firms across the state, while state and local government make up the remaining 14 percent of jobs in Maryland.

Figure 2 Composition of Employment and Earned Wages in Maryland

Source: 2012 Employment and Wages, DLLR

The Washington, D.C. area is not only the center of federal employment, it is also the largest recipient of federal contracting dollars. The value of federal government contracts was about $104 billion in 2012, according to a report by Bloomberg Government which was based on the locations of headquarters of the 200 largest contractors. This amount represents about 20 percent of all federal contracting, which stood at $517.6 billion in 2012 according to USASpending.gov.

Of the total 2012 federal spending, firms received federal contracts to perform $27.3 billion worth of work in Maryland, making Maryland the fourth largest recipient of federal procurement dollars. The largest federal contractor, Bethesda-based Lockheed Martin Corp., which was awarded contracts valued at $1.8 billion in Maryland and a total of $36 billion nationwide, employs about 5,000 people in Montgomery County alone.

Figure 3 Federal Procurement Top 10 States 2012

Source: DBED, USASpending.gov

While large contractors like Lockheed dominate in terms of the share of employment and spending in the state, there are more than 14,000 Maryland firms that contract with the federal government. Nearly half of those are small firms receiving federal contracts as prime contractors. The halt in federal economic activity means that these firms may not be as well-cushioned as other big businesses are during a prolonged shutdown, which may result in cancellations, investment delays, reduced spending and possible layoffs under a cloud of ongoing uncertainty.

Impact on Workers and Families

While the exact number of furloughed workers from the state is unknown, about 315,000 state residents work for the federal government. Most of those live and work in Maryland, but at least a third of them work in the District of Columbia or Virginia.  These workers earned a total of $25.6 billion in wages and salaries in 2012.

Delayed paychecks for Maryland-based furloughed workers means delayed spending and consumption, which has ripple effects for hundreds and thousands of families, individuals, schools, hospitals, and businesses across the state and industries. It is estimated that a two-week loss of income to federal workers might reduce spending on taxable goods by more than $145 million. In other words, there will be about $15 million in lost economic activity during each shutdown day.

The fallout from the shutdown will also affect government revenues. The Maryland Department of Budget and Management estimates that a two-week loss of income for federal workers in Maryland could reduce state tax revenues by as much as $51 million or about $5 million in state revenue loss for each shutdown day.  And the effects will only get worse as the stalemate continues.  According to Moody’s Analytics, if the shutdown lasts for 10 days and 40 percent of federal workers are furloughed, it would cut 1.2 percent from fourth quarter state GDP growth, owing to the higher concentration of federal employees. In addition, federal workers earn about $92,000 annually compared with about $73,000 in the rest of the country.

Mike Binko, President & CEO of Kloudtrack, Julie Lenzer Kirk, Author and Entrepreneur and Governor Martin O’Malley speaking about the strength of Maryland’s innovation economy on the Startup Maryland Pitch Across Maryland Bus Tour.

Mike Binko, President & CEO of Kloudtrack, Julie Lenzer Kirk, Author and Entrepreneur and Governor Martin O’Malley speaking about the strength of Maryland’s innovation economy on the Startup Maryland Pitch Across Maryland Bus Tour.

Stretching into its second week, the federal government’s shutdown is looming over Maryland businesses.

Governor Martin O’Malley’s blog has featured three accounts of successful Maryland companies now threatened by the budget gridlock in Congress.

  • Baltimore-based Fyodor Biotechnologies Corp. was forced to place an important medical research project on hold after the shutdown prevented them from processing a National Science Foundation grant. The project could be shuttered permanently. Read more here
  • M. Luis Construction in Baltimore, which performs many paving and road construction projects across Maryland, is facing stalled bidding processes and possibly postponed payments as result of the shutdown. Read more here.
  • Kloudtrack, with offices in Rockville and Annapolis, is an information technology subcontractor within the Defense Information Systems Agency, the Department of Veterans Affairs and the Department of Homeland Security. They’re now uncertain how long they can continue to provide their high quality product without the promise of future payment. Read more here.

Tell us how the shutdown is impacting your business on the Maryland Department of Business and Economic Development Facebook page.

Maryland Department of Business and Economic Development Secretary Dominick Murray presents a proclamation during MEDA's fall conference.

Maryland Department of Business and Economic Development Secretary Dominick Murray presents a proclamation during MEDA’s fall conference.

Looking to boost your community’s economy? Consider sprucing up the town’s welcome sign, organizing an outdoor farmers market or printing T-shirts with the town name on them.

These actions and more, shared during Tuesday’s Maryland Economic Development Association fall conference in Frederick, may not directly translate into new jobs, but the sense of place they create will help deliver sustainable long-term growth. Experts—ranging from a innovative mixed-use land developer to a social branding consultant—spoke on the importance of improving place to attract higher skilled workers, foster entrepreneurship and increase an area’s overall quality of life.

“Why would anyone invest in a city that doesn’t want to invest in itself?” asked keynote speaker Ed McMahon, Senior Fellow for Sustainable Development at the Urban Land Institute.

McMahon discussed the importance of basic aesthetics. “Every single day in America, people make decisions about where to live, where to work, where to retire, based almost entirely on what communities look like,” he said.

Frederick Mayor Randy McClement said he hoped the backdrop of his city would help inspire fellow community leaders to devote resources to place making.

Developing Frederick’s unique character has been a conscious ongoing effort for the city, which boasts a growing selection of restaurants, outdoor markets and festivals, following a sort of “Mayberry theme,” McClement said.

“You’ve got to find that niche, that thing people would want to come see, whether it’s that hometown charm we have here in Frederick, or maybe the excitement of more urban aspects. You need to find what’s good for you, but we can share the example of building on what you have,” he said.

Keasha Haythe, vice president of MEDA and Director of Economic Development of Dorchester City, said she hoped the conference would inspire fellow MEDA members to improve the perception of their own communities.

“Creating a sense of place is extremely important to economic development because that is what the residents and the business community draw on. That’s how they attract new investment,” Haythe said.

She praised MEDA for providing a platform to spread innovative ideas within the state’s business leadership community. “Events like this bring all the players together, the right policy makers and panelists and business leaders. Today was truly a great conference and we had a great turnout,” she said.

On behalf of Governor Martin O’Malley, Maryland Department of Business and Economic Development Secretary Dominick Murray presented a proclamation to MEDA, recognizing its support of Maryland’s third annual Economic Development Week.

“It’s such a pleasure to work with all of you as a team—we’ve got a tremendous team. All of us are dedicated to doing things that make Maryland a better place to live and work, it’s my honor and privilege to work with all of you,” Murray said.

Robert Walker is Deputy Secretary of the Maryland Department of Business and Economic Development.

Supporting Maryland manufacturing is a top priority here at the Maryland Department of Business and Economic Development, and a recent event organized by Walmart shed some light on revitalizing industry in our state and across the nation.

Walmart has a goal of creating $50 billion in new manufacturing in the United States over the next decade, much of it by encouraging its suppliers to bring outsourced manufacturing back home. This plan was detailed in a summit attended by more than 1,500 participants, including the U.S. Secretary of Commerce, the Honorable Penny Pritzker, and eight governors, as well as the CEOs of General Electric, Walmart, Sam’s Club and other corporate leaders.

The Good News: U.S. exports in the first six months of this year were $1.2 trillion, the total of all U.S. exports in 2003. Increased exports means increased manufacturing jobs as well. The output of U.S. workers is up 9 percent on average since the 2008 recession due to improved productivity, continuing innovation, research and development and the important economic development activities of U.S. universities.  Manufacturing processes are being done with less labor, cheaper natural gas and at a lower cost of credit (thanks to the Federal Reserve).  And three jobs are created for every one manufacturing job.

One speaker said we hear a lot about China’s robust economic growth and how it will “sink” the U.S. economy. The same thing was said of Japan in the 1970s. Today, the U.S. has 2.5 times more manufacturing value-added than five years ago. Chinese labor costs continue to rise, although still well behind average U.S. wages. However, the cost of transporting products continues to rise. In addition, import duties and delays in backfilling orders makes U.S. manufacturing increasingly more competitive with the fully-loaded cost of Chinese imports. In the case of flooring material, the U.S. now has a $.03 advantage over China and the product can be delivered to buyers within a matter of one to three days.

Some of the governors said they have eliminated state taxes on utilities, cut corporate taxes by 20-plus percent, provided tax incentives, improved infrastructure and implemented programs to provide the workforce needed to meet the demands of tomorrow’s job market. In fact, all of the governors who spoke said that the quality and availability of the workforce were the most important factors for companies looking to expand or relocate to their states. One governor spoke of a high school program in his state that allows qualified students to also complete a two-year associate degree at the same time that includes a mandatory internship in the skill area chosen by the student. Another state provides a certificate of “readiness” that confirms for an employer what it is that the prospective employee can do as a result of education and on-the-job training, certified by a professional trained in that skill area.

The CEO of General Electric commented that the U.S. can compete with any country anywhere in the world, and that manufacturing is getting better. The speakers concluded that we are at a tipping point and we should challenge our old assumptions about the capability and capacity of U.S. manufacturing. U.S. manufacturing can and will rebound and grow in light of U.S. leadership in research and development, innovation, productivity improvements and changes in China and elsewhere that will work to our advantage.

The good news that Maryland added 1,800 manufacturing jobs in July, the most of any job sector in the state, underscores the vitality of, and opportunity for, manufacturing in Maryland.

BALTIMORE, MD (September 5, 2013) – Governor Martin O’Malley today via video kicked off the 2nd annual InvestMaryland Challenge, a national business competition that supports Maryland startups and strengthens a climate of innovation and entrepreneurship that has been ranked #1 in the country by the U.S. Chamber of Commerce for two years in a row. The Maryland Department of Business and Economic Development (DBED), through the Maryland Venture Fund and the BioMaryland Center, will award $400,000 in top prizes spread across four categories — Life Sciences, IT, General Industry and a new Cybersecurity category — as well as secondary prizes and awards from partners and sponsors. DBED is continuing its partnership with Inc. magazine to promote the Challenge to a national audience of entrepreneurs and small business owners. The application period opens immediately and will close December 6 and applications are available here.

“The future of Maryland’s economy is the entrepreneurs, innovators, startup founders and small business owners all across our State. The InvestMaryland Challenge is a central piece of our strategy to provide the critical resources to help these men and women succeed,” said Governor O’Malley. “The winners in the New Economy will be those states and countries that make the smart investments in the people, technologies and companies that will lead their economies for decades to come. The InvestMaryland Challenge is one way we are doing just that, while showing entrepreneurs everywhere that Maryland is the best place to start and grow their businesses.”

“We are excited to bring back the InvestMaryland Challenge for a second year, build on the success of the first competition and continue our efforts to reach and support Maryland’s diverse and growing community of innovators,” said DBED Secretary Dominick E. Murray. “The Challenge is an opportunity for us to connect in a unique and impactful way to Maryland companies on the cutting edge of life sciences, social media, cybersecurity, big data, green energy and the other high-tech fields at the forefront of Maryland’s Innovation Economy. We look forward to meeting an exciting new crop of entrepreneurs and helping them strengthen and grow their businesses.”

“We at Inc. have been watching innovation and fast-growing private companies blossom in Maryland for more than 30 years,” said Editor-In-Chief Eric Schurenberg. “Like our partners in the InvestMaryland Challenge, we like nothing more in life than to help our favorite people—entrepreneurs—succeed.”

The benefits of the Challenge stretch far beyond the cash prizes and other awards that companies will receive. Contestants will have their companies evaluated by teams of expert judges comprised of successful entrepreneurs, angel investors, venture capitalists, high-tech and scientific researchers, top-level executives and others who work with startups. Connections forged with judges and fellow contestants can pave the way for partnerships, new customer relationships and further investment.

For example, SocialToaster, a Baltimore company that helps organizations amplify their social media messages by deputizing their most ardent followers, landed a $200,000 venture capital investment from DBED’s Maryland Venture Fund after being named one of the three finalists in the IT category in the first InvestMaryland Challenge. The company has also partnered with DBED to help promote the second Challenge. North East-based i-Lighting, a producer of home lighting systems, has moved into a larger facility, expanded its manufacturing operation and added staff since it won the General category in the first InvestMaryland Challenge in April. The company has also signed on to provide a $5,000 prize and help judge the second Challenge.

“Winning the InvestMaryland Challenge has been a huge advantage to i-Lighting. The influx of cash that we needed to expand our business and grow it in so many categories has been huge,” said Scott Holland, i-Lighting’s founder, president and CEO. “The funding was the end result, but it would be very difficult to put a value on the exposure we have received from outside sources after winning the InvestMaryland Challenge. It was almost brand recognition all by itself.”

The inaugural Challenge awarded more than $425,000 in cash prizes and services and drew 259 contestants from 10 states and Washington D.C., with companies applying from as far away as California, Georgia and Massachusetts. As required last year, out-of-state companies are eligible to apply in the General Category but would have to establish an office in Maryland and spend a majority of the funding here if they claim the top prize. The Life Sciences, IT and Cybersecurity categories are open only to Maryland companies. Every category is limited to companies with fewer than 25 employees and less than $1 million in annual revenue. After businesses turn in their entries, including a business plan, by Dec. 6, they will be evaluated in January by panels of judges. The top 10 companies in each category will move on to face-to-face interviews with judging panels in March. Winners of each category and the special awards and prizes will be announced at the InvestMaryland Challenge Finale in April.