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2016#B

Anecosystemwhere
startupshelpeach
other
Theangelfund,JumpstartVentures,has
backedmorethan45businesses,giving$20
millionsince2011
ByJohnFWasik

When startups begin, it's akin to Joseph Campbell's mythical hero's

journey. Instead of battling hydras and gorgons alone, entrepreneurs
often help each other face obstacles like entrenched markets,
financingandabjectfearoffailure.

It is a symbiotic relationship that makes sense to Shradha Agarwal

and Rishi Shah, both 31 and cofounders of ContextMedia, a
healthcare media company in Chicago. The two entrepreneurs are
expanding their 10yearold company, which they started when they
werestudentsatNorthwesternUniversity.Theyhavemadeapointof
supportingotherstartupsbyfinancinganangelfundcalledJumpstart
Ventures.Thefund has backed more than 45 businesses, giving $20
millionsince2011.

Although there are no precise estimates on how many such

ecosystems exist, the Kauffman Foundation, a research organisation
focusingonentrepreneurship,foundthatnearlyeveryoneofthemore
than 360 major metropolitan areas in the United States had such a
networkinplace.

ContextMediaprovidescustomisedhealthcareinformationonscreens
at doctors' offices and other sites. Doctors can show patients digital
3D anatomical diagrams of procedures using ContextMedia
"wallboards"ortablets.

Theirmaterialisnowviewedbymorethan6millionpatientsamonth
at 25,000 medical practices or healthcare locations. More than 400
people work at the company, whose revenue last year was $63.5
million.Ithopestoaddmorethan200workersbytheendoftheyear.

AlthoughContextMediahasmadeinroadsintoanotoriouslydifficult
market to crack doctors' waiting and examination rooms it was
donewithoutventurecapitalists,whowerenotwillingtotakearisk,
Agarwal said. Support from the Chicago entrepreneurial community
not only got her company started, but it also helped the company
clearsomehighhurdles.

Professors at Northwestern first helped Shah and Agarwal. And the

founders "bootstrapped," or selffunded, their enterprise during the
recession. "In 20082009, we slowed down," Agarwal said, "so we
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hadtoreconnecttoourjourney,whichwasourpassionforchanging
healthcare."WiththeJumpstartfund,shesaysshenowwantsto"pay
itforward"tootherentrepreneurs.

These support systems need to be diverse to be effective, though.

AccordingtotheWorldEconomicForum,whichsurveyedmorethan
1,000 entrepreneurs around the world, what startups value most are
accessible markets, funding, regulatory framework, an educated
workforceandmajoruniversities.Thatdoesnotmean,however,that
the network always provides robust financial backing from big
moneyplayerslikelargeventurecapitalfirms.

An ecosystem also offers social and psychological support. What

fuels entrepreneurial success, Agarwal noted, are passion and
purpose.Whenshestartedhercompany,shewantedanenterprisethat
would have a positive social and personal effect. She started with
diabetes education, a disease that affected both her and Shah's
relatives in India. When Agarwal interviews candidates for the
Jumpstart Ventures portfolio, she wants to find likeminded people
whoare"passionateabouttheirmission."

MertIseri,cofounderandchiefexecutiveofSwipeSense,acompany
focusedonreducinghospitalinfections,wassomeonewhofitthebill.
AlsoaformerNorthwestern student, he met Agarwal in 2012. Iseri,
28, was focused on providing a digital hand hygiene solution to
combatthe100,000annualdeathsintheUnitedStatesfromhospital
acquiredinfections.Suchinfectionscost$28billionayearinrelated
healthcareexpenses.

"Shradha became our first investor and gave us our first check for
$25,000andemployed'radicalcandor,'"inhermentoring,Iserisaid.
Thatincludeddiscussionsabouttoughdecisionsthathadtobemade
whenbuildingabusiness,suchashiring,firinganddetermininglong
termgoals.

"It is always difficult to fire someone," Iseri said. He described one

situationwhereasalesrepresentativewasahighperformerbutdidn't
fit the culture at SwipeSense. "Shradha was very clear her direct
feedback was to part ways right then and there, and she highlighted
that no amount of shortterm results can justify holding on to folks
whowon'tbelongtermmembersoftheteam."

SwipeSense's initial presentation at Healthbox, a Chicagobased

incubator, raised $1 million in 2011 after one of its first
demonstrations. Iseri credited Agarwal's continuing support with
helping his company secure more than $12 million through several
roundsoffinancing.Iseriwouldnotdisclosehiscompany'ssalesbut
said it had "annual revenues in the seven figures" and was
"experiencing significant monthovermonth growth" with its
customers.

Directguidance

Agarwal, her employees, coinvestors and angel investors have also

bolstered entrepreneurs by simply being nearby and giving direct
guidance. For instance, ContextMedia provided office space to
Packback, which offers online learning communities and digital

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textbooksforcollegestudents.AgarwalandContextMediaemployees
ofteninteractedwiththefirm'sworkerstoofferadvice.

"We'vebeeninsevenofficespacessincewewerefoundedfouryears
ago," said Jessica Tenuta, a cofounder and head of design of
Packback. "Shradha showed us how to hire and incorporate our
valueswhilementoringus.Wemadegreatconnectionswhilebeingin
theirspace."

Packback now has 24 employees and a $250,000 investment from

Mark Cuban, who took a 20% stake in the company after the co
founderspresentedontherealityshow"SharkTank"twoyearsago.

Tenuta and Packback's cofounders Kasey Gandham, Nick Currier

and Mike Shannon have also garnered support in other ways. The
company works with 1871, a business incubator in Chicago that
offersclasses,coworkingspacesandaccesstoventurecapitalists.

Fortheirpart,IseriandTenutawereinspiredbytheirexperiencesto
mentor other startups. These may be at universitybased or private
incubators and accelerators, in coworking environments or through
otherangelinvestorsandventurecapitalists.

Agarwalcharacterisedthepayoffas"thecommunalsupportthrough
learning, wellness and volunteer opportunities." She added that her
enterpriseandthoseshebackshave"abiastowardactionandscaling
tothemarket."Thatmeansanentrepreneur'svisionmusteventually
translate into revenues, profit, growth and a commitment to giving
backtothecommunityandotherentrepreneurs.

The network of support offered by startup ecosystems, though, will

notgetentrepreneursentirelypastthefearoffailureandrejection.A
plungeintotheunknownispartofmakingitpastthoseperilousfirst
years.

"WhenIwasagirl,mymotherpushedmeintothedeependofapool
togetmetoswim,"recalledAgarwal."Shesaiditwastheonlyway
to learn. She was one of four daughters in her family, all of whom
werepushedtoearncollegedegreesbymygrandmother."

If Agarwal and her peers succeed, their companies will also

contribute to social good such as better medical education and
improved health outcomes. They will, in her words, be "solving
problemsworthsolving."

InternationalNewYorkTimes

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