Ask an Expert: Onkos Surgical® CEO Patrick Treacy on Growing a Startup in New Jersey
Innovation is the fuel that keeps modern economies running. Everywhere you look, creative entrepreneurs and the startups they run are transforming the way we communicate, travel, shop, and do everything in between. Meanwhile, their innovative companies are driving job creation, community revitalization, and economic growth around the world.
New Jersey has a rich history of innovation and the NJEDA is committed to helping Garden State entrepreneurs at every stage of the startup process. Programs such as Founders and Funders and NJ Ignite help early-stage companies connect with investors and establish themselves in coworking spaces, while the Angel Investor Tax Credit, Technology Business Tax Certificate Transfer (NOL) Program, and recently-announced partnership with Golden Seeds bring investment dollars to New Jersey and foster a comprehensive innovation ecosystem.
Dozens of companies have already benefited from these programs, and we expect many more will take advantage of them as New Jersey’s innovation ecosystem continues to grow. To help entrepreneurs make the most of NJEDA’s resources, we sat down with EY Entrepreneur of the Year Patrick Treacy, President and CEO of Onkos Surgical, a Parsippany-based biotech company that designs solutions for surgeons and health systems treating cancers of the musculoskeletal system. The company plans to launch multiple 3D-printed technologies that are designed to match the specific anatomy of each patient, resulting in more precise ways to treat musculoskeletal cancers and preserve quality of life. In addition, Onkos develops numerous digital assets that allow surgeons and staff to manage relevant data for use in meaningful ways.
We discussed how the Angel Investor Tax Credit helped Onkos attract the funding it needed to launch, tips for attracting venture capital investments, and why New Jersey is a great place for startups.
The Importance of Angel Investors
Raising the necessary capital to launch any startup is a challenge. Launching an innovative business aimed at creating new treatments in the field of orthopaedic oncology is especially difficult.
In order to succeed, Onkos used a special business plan called a “medtech jumpstart model” that involved acquiring several underperforming assets and then building strategic partnerships to rapidly achieve a stable, revenue-generating foundation. The company then built on this foundation to create products that are changing patients’ lives for the better.
Executing on this strategy required just the right mix of expertise, skill, innovation, and resources. While the team at Onkos brought more than enough of the first three ingredients to the table, the NJEDA’s Angel Investor Tax Credit Program played a key role in providing the fourth. Recently expanded by Governor Phil Murphy, this program offers refundable tax credits against qualified investments in technology businesses with a physical presence in New Jersey that conduct research, manufacturing, or technology commercialization in the state, with an additional bonus available for investments in a business located in a qualified opportunity zone, low-income community, or a business that is certified as minority- or women-owned by the State. In its early stages, Onkos benefitted from more than $1 million in investments from funders who participated in the program.
Tips for Attracting Venture Capital
In addition to drawing funding from angel investors, Onkos has also been incredibly successful attracting venture capital, including investments from high-profile funds such as 1315 Capital and Canaan Partners.
According to Treacy, venture capital investors look for investments where a solid management team can build a high growth, scalable business. He says it is important to demonstrate to early stage investors that a company’s management team has the relevant experience and track record to create a business that can take full advantage of the opportunity the founders identified.
Treacy also noted that networking is critical, especially on the East Coast. Though venture firms have historically been concentrated on the West Coast, Treacy says that any startup — regardless of location — can build a network of potential investors who will refer the company to other potential investors. Beyond just meeting with investors, Treacy also stressed that meeting with other entrepreneurs, participating in industry associations, and attending investment conferences can help build an entrepreneur’s network of potential investors.
Why New Jersey is a Great Place for Startups
While New Jersey provides many benefits for companies that choose to locate here — from our unbeatable location at the heart of the Northeast Corridor to our top-notch public schools — for Onkos, the decision to locate here was, according to Treacy, “first and largely about the talent.”
New Jersey is well known as a center of the world’s pharmaceutical industry and has long been a global leader in biotech innovation and research. However, Treacy pointed out that New Jersey is also home to a thriving medical device ecosystem of large cap multinationals, numerous small cap and start-up firms, as well as world class manufacturing.
Onkos has tapped into New Jersey’s talent pool to leverage the Garden State’s great talent resources while also developing a talent pool in high tech areas such as 3D printing and digital healthcare. This has allowed the company to create 40 highly skilled positions and bring medical implant production business to New Jersey manufacturers.
