Leonhardt Ventures News
It's Not Just Warren Buffett Who Is Bullish On Women
May 8, 2013, 11:02 am
Why are Warren Buffett and other men bullish on women?
Warren Buffett recognizes value when he sees it. His style of investing in high-quality, under-priced companies has made him one of the richest men in the world. Women are an under-valued resource who are key to America’s prosperity wrote Buffett in an essay in Fortune.
His view on women is supported by research, which documents the wisdom of investing in women-led companies.
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Venture capital firms that invest in women-led companies out perform those that don’t, according to research from the Small Business Administration’s Office of Advocacy. Male dominated VC firms that rely on the good ole boys network for referrals may be doing themselves a disservice. When you get a referral from someone you know, you may scrutinize the company less. VCs that are less embedded, share the risk with other VCs, find higher performing companies, and invest more often in women-led companies.
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Venture-backed companies that include more women on their executive management teams are more likely to succeed than companies with men-only executive suites, according to Women at the Wheel: Do Female Executives Drive Start-up Success, research conducted by Dow Jones. The report finds that companies with a greater percentage of women on the management team have a greater chance of success. Success is defined as going public, operating profitably, or being sold for more money than they’ve raised.
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If women entrepreneurs in the U.S. started with the same funding as their male counterparts, they would add 6 million jobs to the economy within five years, according to Babson College. That’s why Dell has a special initiative, the Dell Women’s Entrepreneur Network, to accelerate opportunities for women entrepreneurs, said Steve Felice, President and Chief Commercial Officer, Dell.
When Adam Quinton was a managing director at Bank of America Merrill Lynch, he saw the benefit of diverse teams: Having women on the team drove better outcomes. He sees the lower level of funding for women-led, high-growth companies as a market failure. But, while other investors are ignoring this market, he has more opportunity to invest. That’s why he’s a member of the Global Advisory Board of Astia (which accelerates the funding and growth of women-led companies) and Managing Director at Golden Seeds, (an investment firm that invests in women entrepreneurs) as well being a Founding Astia Angel. He is on the Board of Thrive Metrics and an Advisor at NopSec, Swoop Talent and Cloudamize, all of which have women CEOs and founders. In addition Quinton is an investor in four other women led/founded businesses including Flixmaster and The Muse. He is also a mentor to Women Innovate Mobile accelerator program and other women-led companies.
Women add diversity in skill sets, another benefit according to John Harthorne, founder and CEO of MassChallenge, a Boston based accelerator. His accelerator helps novice entrepreneurs with advice, resources, and funding to bring their ideas to fruition. In general, men are better at asking for money, but women are better at building at motivating teams, he says.
What’s standing in women’s way?
“Networking helps entrepreneurs share best practices, build business opportunities, explore expansion, and access new resources — like capital and technology — that support business growth,” said Felice. “Business is an inherently social practice and entrepreneurs rely on one another to play the roles of customer, partner, vendor, advisor, etc. at various stages of growth.”
Women leading high potential companies need to expand their networks to more of these resources. “You can’t buy this advice, but you can get it for free,” said Quinton.
Experts say that men tend to network less frequently and in a transactional, direct manner, reaching out to the people they need when they need them – for advice, a connection, etc., according to Felice. Both Harthorne and Quinton agree that, by and large, men are quicker to ask for what they want and get it. Women are slower to ask, feeling they need to earn the ability to ask.
Women need to get past their inhibitions. They need to identify and engage in the networks that are critical to their businesses, according to the SBA report.
What’s needed to tap this under-appreciated resource?
The SBA report mentions the need for mentorship programs. Astia and Springboard Enterprises offer programs specifically aimed at helping women raise money. MassChallenge ensures that women are included in the accelerator initiative with special outreach efforts. Other accelerators, such as Cal-X Stars do the same.
Howard J. Leonhardt, founder of Cal-X Stars and The California Stock Xchange, is a serial entrepreneur who made a fortune on his medical inventions. He thinks that it’s not just women who are excluded by the good ole boys network. As the son of a mechanic and a seamstress, he understands firsthand how it hard it to raise money when you’re not one of the good ole boys. He now teaches the lessons he learned through his Cal-X Stars accelerator programs.
Leonhardt did an IPO on NASDAQ; it cost $4.8 million to raise $6.5 million. This was hugely expensive and took a long time. He hopes The California Stock Xchange will be the third major stock exchange in the U.S. He wants to offer a cost-efficient stock exchange for small cap stocks to raise money. The stock exchange will also be geared toward socially responsible companies, many of which he hopes many will be women-led.
Leonhardt is also an advocate of crowdfunding as a way of raising money for start-up companies. I’ve written about its potential for women entrepreneurs.
Another point made by the SBA report is that we need to encourage investors to invest in women-led companies. That’s all investors, not just women investors. There’s not only an upside for your portfolio but for the American economy.
What about your portfolio? How will you add women-led companies to the mix?
Source: Forbes.com
Heart Failure 2013 LA Showcase of SoCal Heart Disease Startups
April 15, 2013, 3:41 pm
LOS ANGELES, March 20, 2013 /PRNewswire/ -- Heart Failure 2013 LA will be held at the Millennium Biltmore Hotel all day on Saturday April 6th. Leonhardt Ventures and the Cal-X Stars Life Science Business Accelerator are co-sponsoring @ 5:30pm a side showcase of startups that address heart and cardiovascular disease, most of them based in Southern California or with strong SoCal ties.Companies to be showcased include:MyoStim Pacers – http:/www.myostimpacers.com - world's first heart failure pacemaker with ability to recruit repairative stem cells to damaged and weakened heart tissue.Bioheart, Inc. – http://www.bioheartinc.com - Phase III leader in applying adult muscle stem cells to treat advanced heart failure. Only cell type known to grow new contractile muscle in the depths of scar tissue.BioPace– world's first biological pacemaker made entirely of living cells.CoroStim– world's first vibrational energy emitting pacemaker that prevents plaque formation in high risk coronary arteries.BioLeonhardt– http://www.bioleonhardt.com - combination electrical stimulation and multi-stage cell and gene therapy method, composition and devices for treating advanced heart failure. Featuring combined utilization of MicroRNAs, nutrient time release SDF-1, hydrogel, cardiac stem cells, iPS cells and muscle progenitor stem cells. First method under testing with up to 36 repeat injection sessions of stem cells over time via a needle catheter.Cardiobridge– http://www.cardiobridge.com - Highest flow rate 10FR circulatory support catheter pump in clinical testing for acute decompensating heart failure and high-risk PCI. Data on about 30 clinical patients will be presented.AortaCell– Method and device to treat aortic aneurysms non-invasively with an abdominal belt that delivers focal wireless electrical energy to weakened aortic wall that causes repairative autologous stem cells to home to that chosen treatment location.EndoCell– Method and device for growing new endothelium lining of a damaged artery with a percutaneous needle catheter and endothelial progenitor cells.MyoValve– Cell seeding method and device for heart valve leaflets invivo or invitro. Designed to reduce risk of calcification and valve replacement.Valvublator– Percutaneous catheter device for de-calcifying heart valves so a patient may keep their own valve instead of getting an artificial implant.HeartScore– Composite scoring system of genetic, blood and scan test results (some point of care) that are loaded into the SecondBeat wearable wrist watch for a baseline score. The watch has an infrared sensor that measures real time endothelial health. The baseline score goes up or down if the patient eats well, exercises well and is compliance with all doctor prescribed medicines and protocols. The composite HeartScore is clearly viewable to patients to help real time guidance of their heart and cardiovascular health.About Leonhardt Ventures: Since 1983 Leonhardt Ventures www.leonhardtventures.com has a strong history of inventing, developing, backing and bringing to market leadership products for treating heart and cardiovascular disease. Over 200,000 patients have been treated to date with Leonhardt inventions. In the 1980's the group developed market leadership in patented polyurethane balloon catheters including drug, stem cell and radiation delivery systems. In the 1990s they developed over 20 additional devices including the first commercially successful stent graft for aortic aneurysm repair (TALENT – Taheri-Leonhardt Stent Graft). The team completed the first ever truly percutaneous repair of an aortic aneurysm without surgery in Melbourne, Australia in 1995. Published the first thoracic aortic dissection repair with stent grafts paper in The New England Journal of Medicine in 1999. The first conformance sealing stent graft. The first above renal fixation stent graft. The first customized to fit individual patient stent grafts. The first multi-stage low profile stent graft. The first removable stent graft. The first foam and bioglue sealing cuff for stent grafts. The first use of muscle stem cells to reinforce aortic wall necks after stent graft placement. The team developed and patented the first percutaneous heart valve, intravascular lung catheter, the Pro-Cell intracavity stem cell delivery system and the MyoCath line of stem cell delivery catheters. Leonhardt patented inventions include the first heart pacemaker able to recruit repairative stem cells to damaged heart tissue (MyoStim Pacers). In 2001 the team led the first in the world non-surgical case of stem cell repair of damaged heart muscle in a human patient with Bioheart MyoCell. That led to the first Phase III double blinded, randomized, placebo controlled trial for stem cells growing new contractile muscle in post heart attack tissue in advanced heart failure patients – results published in the American Heart Journal Bioheart MyoCell pts 95.7 meters improvement in exercise capacity over placebo (minus 4 meters decline). The team is preparing to complete the first ever biological pacemaker implantation in a human patient within the next 12 months (BioPace).About Cal-X Stars:Cal-X Stars is a 5 year program business accelerator based in Santa Monica, California. Cal-X Stars also operates Cal-Xeleratora 12 week business startup launch accelerator. Both Cal-X Stars and Cal-Xelerator specialize in life science companies with a stem cell focus and social good enterprises with positive cash flow. Both accelerators guide firms through the California Qualification By Permit financings up to $5 million via Cal-X Crowdfund Connect www.calxcrowdfund.comAbout Heart Failure 2013 LA:Is officially endorsed by the Heart Failure Society of America. Heart Failure 2013http://www.laheartfailure.com has been designed to continue a tradition of providing a comprehensive, high level and clinically oriented update on prevention, diagnosis and management of heart failure. The program is structured to include lectures presented by experts in the field combined with interactive panel discussions. In addition the program will provide an update on cutting edge therapies including the use of gene therapy, neuroregulin and stem cell therapy in patients with heart failure.Contact: Howard Leonhardt, Leonhardt Ventures, 1531 6th Street, Unit 401, Santa Monica, California, 90401, 310 310 2534, EmailThis press release distribution was issued via PR Syndication.SOURCE Cal-X StarsRELATED LINKShttp://www.calxstars.com
From Main Street To Wall Street And Back: Cal-X Determined To Help Startups Succeed
March 27, 2013, 8:56 am
As Howard J. Leonhardt sat in the White House Rose Garden watching President Obama sign the JOBS Act into law on April 5, 2012, he was overwhelmed with a feeling of relief that future entrepreneurs may not be faced with the difficulties and the frustrations he faced in building his first company.
“I had chills up my spine,” he said. “I really believe in the depth of my heart that that signature was just as important as when President Lincoln was signing the freeing of the slaves. To me it’s that impactful, that important, and I really believe that most of the population of the US is underestimating the importance of the JOBS Act and particularly the crowdfunding provision.”
One can’t understand why Leonhardt would say such a profound thing without first understanding his back story. Beginning as a young entrepreneur, his story would eventually result in numerous medical breakthroughs and a series of new companies. It is also pockmarked with the all-too-familiar tales of regulatory hurdles, high costs and time wasted.
His frustrations would lead him to lobby for passage of the JOBS Act. He’d later launch a venture fund, two accelerators and a stock exchange, eventually funding 28 companies and counting.
In a way his story is the story of why the JOBS Act came to be in the first place, mirroring the experiences of Woodie Neiss, Jason Best and the other entrepreneurs that saw a need for radical change in the rules governing access to capital in the United States.
Friends And Family
What does a young mind with a great idea do when that idea would cost millions to bring to market?
Leonhardt was faced with this question after attending the University of Florida. He founded his first company, World Medical Corp., in 1986. The goal: to bring revolutionary new biotech products to market, specifically products for treating cardiovascular conditions. The process of fundraising began.
This is the first time he was faced with the regulatory realities of raising capital in the United States. He needed access to millionaires, but his upbringing in a largely blue collar neighborhood meant he didn’t know any. The average income of the households in his neighborhood was around $40,000. He would learn that regulations prevented him from soliciting investment from anyone he didn’t already know.
After pitching his friends and family, Leonhardt had 35 investments of a thousand dollars each, no doubt a humbling vote of confidence from people without a lot of expendable cash in the coffers. Thanks to this new round of non-accredited investments in his company, legal fees doubled from $10,000 to $20,000, effectively skimming almost 30% of the money he had just raised from those closest to him; The money that he had promised would be put to good use.
Feeling angry and betrayed by the system, he dreamed of going to Washington one day to fix things, but it would have to wait. He had a company to build.
Lives Saved, Lives Lost
Things were going well and eventually Leonhardt realized that he needed a factory, but before he could get the factory he would need a million dollars to acquire it. It would take years to get the money he needed to expand.
“We ended up finding a way to do it which is almost impossible,” he said. “We wholesaled other products and we private labeled products and we earned the money to get the million to build the factory. We couldn’t get capital from outsiders. It took ten years longer than it would have taken otherwise, and finally when we broke loose we went from 35 employees to 550 employees and saved 200,000 lives. All of that was delayed.”
“In a certain way, I think the SEC holds – as they do again and again – blood on their hands that developments that could have saved millions of lives are held up because the rules are so daunting that you can’t get the capital to do it.”
A manufacturing-focused spinoff of his original company, World Medical Manufacturing Company would eventually bring over 15 cardiovascular products to market including cardiovascular balloon catheters, percutaneous heart valves, intravascular lung catheter and the world’s leading aortic stent graft system – the TALENT (Taheri-Leonhardt) stent graft.
Those 15 products were delayed years while Leonhardt tried to find ways to raise money. They would later be credited with saving as many as 200,000 lives. Death rates for associated cardiovascular diseases would be reduced from 90% to less than 1%.
War
Eventually Leonhardt would shift focus to Bioheart Inc. Bioheart aimed to take World Medical Manufacturing’s progress a step further. A modified stent would be used as the delivery mechanism for Bioheart’s breakthrough treatment, a treatment that would use stem cells to help heal scar tissue of the heart.
Leonhardt knew Medicare was spending $8 billion on heart failure drugs every year, and the drugs that did dominate the market left a lot to be desired. Quality of life for patients was generally poor.
After years of research Bioheart’s method was ready for trials. Clinical trials would cost $7 million. The year was 2008 and the US economy was in a tailspin. Bioheart would go on to be the only biotech IPO in the United States that year, raising $6.5 million.
Trials have shown cause for optimism. A one-half hour injection session of myoblast cells using technology from Bioheart Inc. delivers great results in a majority patients, and results tend to improve with subsequent injections. It could one day revolutionize how we treat heart failure in the United States and around the world.
After the 2008 IPO, Leonhardt asked to see the tabulation of cost for the IPO. The total?
$4.8 million, more than half of the $6.5 million raise.
“Heart failure is the the leading drain on Medicare in the United States, and we have the solution and we can’t get it to market because the capital raising system is broken. I was furious. I resigned as CEO, and I went up to Washington and started yelling at people.”
The California Accelerator, Cal-X Stars & The California Stock Exchange
Today, Leonhardt is putting his experience to good use, traveling and evangelizing crowdfunding in his home state of California and beyond. He is planning a run for Lt. Governor of the State of California (a post with a heavy focus on economic development), and he is the state spokesperson for the JOBS Act and crowdfunding in California, a position he was asked to fill by Startup America Partnership.
He also launched Leonhardt Ventures, a venture fund that has invested over $145 million in 28 companies to date.
A logical extension of this venture fund was a small business accelerator. In 2008 Cal-X was launched. Cal-X’s top product at the moment is called “Cal-X Crowdfunding Connect,” which specializes in California Qualification by Permit offerings. These deals are available to residents and businesses of California. Investors must be accredited as defined by California securities law, so Cal-X is participating in equity crowdfunding right now as we wait for rules to come from the SEC.
Cal-X also offers two accelerators: the California Accelerator, which is a 12 week accelerator. There is also a comprehensive, napkin-concept-to-IPO 5 year accelerator called Cal-X Stars. All of this is centered around a new California Stock Exchange, or Cal-X, which Leonhardt says is ”designed to be the very first concious capitalism stock exchange with an emphasis on local investing.”
Cal-X Stars is the only 5 year business accelerator that is partnered with Cal-X The California Stock Exchange registering with the SEC with intent to serve as the leading U.S. exchange focused on serving smaller firms. Cal-X Stars selects the best startups to be engaged in a full co-founder partnership with the goal to first get listed on Cal-X and later on NASDAQ or NYSE.
Leonhardt says the choice to place all of these under a California brand was deliberate. ”We wanted to go with that name because we think we embody the spirit of California, the entrepreneurial spirit, the little bit of slant to the left as far as caring for the community and the environment,” he said. “We’re going to try to create a feel good marketplace where people that never thought of investing are all of the sudden going to want to participate.”
The exchange aims to break the walls down between CEO and investor. Leonhardt wants to place emphasis on the human aspect of businesses, the people that create them and the passion they have for their ideas.
“When our investors sign on to the California Stock Exchange in the future, the number one thing they’ll be directed to is a local investing meeting that is taking place in their city where we’ll showcase entrepreneurs raising cpaital in their community… we want the investors to meet in person the CEO and the CFO of the company and develop trust and rapport, which is very different from the Wall Street way.”
Cal-X is seeking a technology partner in an effort to license secure, effective trading software. They are also in the process of acquiring a space in San Francisco or LA.
Wherever the market ends up, I wouldn’t bet on a Wall Street mailing address.
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