As key players in the Garden State’s innovation ecosystem, Jim Gunton and Stephen Socolof know the importance of nurturing early-stage technology and life sciences companies. They also understand the value that strategic investments can provide to these businesses. Together the duo spearheads Tech Council Ventures, the venture fund arm of the New Jersey Technology Council.
Last year, the New Jersey Economic Development Authority (EDA) made a limited partnership investment of up to $7.5 million in Tech Council Venture’s latest venture fund – Tech Council Ventures II – to support emerging companies in fast growing sectors, including healthcare information technology, life sciences, education technology, financial technology, media technology and energy. The objective of Tech Council Ventures II is to invest in 20 to 25 early-stage companies with an average initial investment of $500,000 to $2 million. A variety of New Jersey Fortune 50 corporations, health systems, multiple university endowments, and Wall Street financial institutions also invested in the Fund.
Tech Council Ventures II recently made its first investment into Holmdel-based Vydia. Located at Bell Works, Vydia provides a platform for over 200,000 video content creators to share their content through all the online distribution channels. The Inc. 500 company currently has approximately 60 employees and was named by NJBIZ as one of its Best Places to Work in New Jersey this year. Vydia Founder Roy LaManna was a 2018 finalist for EY’s Entrepreneur of the Year.
The EDA previously invested in the Tech Council Ventures’ initial venture fund – NJTC Fund I, which was also led by Gunton. The EDA’s $7.15 million limited partnership investment in the $70 million fund resulted in a public/private leverage multiplier of 51.76 times the total $370 million of third-party partner capital into New Jersey-based businesses. The 24 New Jersey companies that benefited have generated an estimated 1,983 jobs in the State.
“Quality of leadership is one of the criteria we weigh when choosing to invest in a venture fund,” EDA Vice President of Technology and Life Sciences Investments Kathleen Coviello said. “Jim and Steve bring a wealth of expertise to their positions, specifically in the area of cultivating emerging companies from infancy through commercialization.”
Gunton is a member of the EDA’s Technology Advisory Board, where his guidance and input helps EDA in the decision-making process regarding which companies should receive funding under the Edison Innovation Fund. Gunton spent the early part his career working with Fortune 500 companies in Silicon Valley, including Oracle and PricewaterhouseCoopers. He moved east in 1994 to work at Edison Partners, now located in Princeton, before transitioning to the New Jersey Technology Council to spearhead its venture funds.
Socolof spent decades of his own career creating opportunities for early-stage New Jersey companies. Born in Long Branch and later living in Franklin Lakes, he joined Lucent Technologies in 1996, a week after the telecommunications giant filed its initial public offering. As Vice President of New Ventures for Lucent, Socolof was instrumental in the launch of a venture incubator that helped Bell Labs, Lucent’s research and development arm, bring its innovation to market. In 2001, Socolof left Lucent to become Managing Partner at New Venture Partners, in New Providence, where he worked with large companies such as IBM, Intel, Motorola and Philips to commercialize their technology.
“It used to be that 90 percent of venture capital investments were focused on Silicon Valley and 10 percent on Boston,” Socolof said. “But now, there’s a startup ecosystem everywhere, and we are seeing lots of investment opportunities up and down the Mid-Atlantic region and in New Jersey in particular. The time has never been better for our strategy and how we can foster innovation.”
Another indication of Gunton and Socolof’s commitment to New Jersey’s innovation sector is the pair’s participation in New Jersey Founders & Funders events, which provide them the opportunity to engage with new startup companies. During the semi-annual events, investors meet one-on-one with entrepreneurs during “speed dating”-type sessions to discuss strategy, business models, and funding opportunities. EDA staff pre-matches these meetings based on the needs of the companies and the interest areas of the investors. Entrepreneurs can apply online to attend an upcoming New Jersey Founders & Funders event. The next one is scheduled for November 1 in North Brunswick.
@NewJerseyEDA spoke to the partners about their experience investing in New Jersey:
What attracted you to New Jersey as a place to invest in early-stage companies?
New Jersey has tremendous advantages as a home for early-stage companies. As the most densely-populated state providing a range of business and living communities and nestled next to New York and Philadelphia, there is great talent and opportunity to work with leaders in almost every industry sector.
The Garden State is home to many corporate headquarters and research centers of American and international companies. It’s a communication and transportation hub for the East Coast. It has fantastic universities building startup ecosystems and supporting organizations like the EDA and the New Jersey Technology Council provide great connectivity.
What advice do you offer entrepreneurs at New Jersey Founders & Funders?
We always try to offer (1) some feedback regarding the entrepreneur’s thinking about the business, (2) a connection that might be helpful to the business, and (3) what demonstrations or milestones would make us excited about it as an investment.
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