By Péralte C. Paul
Two startup firms — one in the patient recruitment industry for clinical drug trials, the other in real estate micro-lending — have joined the Advanced Technology Development Center (ATDC) as Select Companies.
NeuroCruitment and Groundfloor were approved for admittance into the highly selective program after a thorough review and interview process by a panel of ATDC staff.
ATDC is one of the nation’s premier technology startup incubators. It also is a unit of Georgia Tech’s Enterprise Innovation Institute (EI2), which is tasked with leading several economic development and business growth initiatives across the state.
NeuroCruitment, which launched in 2013, is an online platform that decreases patient recruitment times in later-stage clinical drug trials while increasing the quality of the patients recruited. Its system reduces the pharmaceutical companies’ risk of their clinical trials failing due to patient enrollment. NeuroCruitment counts Merck, Aradigm, and Covance among its clients.
Groundfloor operates on the “crowdfunding” model, but only for the real estate space. Individuals who want to fund loans pool their money — $10 is the minimum required investment per person. Groundfloor verifies the information submitted as part of the loan application process to ensure it is accurately represented. The information also is compared to a grading algorithm that yields a grade from “A” to “G” and assigns an interest rate.
The company launched in 2013 and relocated to Georgia this year from North Carolina because of the state’s more compatible laws with its business model. Groundfloor has closed more than $600,000 in loans on more than $1.5 million in real estate transactions during its one-year Georgia test pilot.
“Since moving our company to Atlanta in August, we continue to be impressed by everything this city uniquely has to offer a startup like ours,” said Brian Dally, Groundfloor’s co-founder and CEO. “We’re proud to be accepted into the ATDC Select program and look forward to tapping into the valuable resources ATDC has to offer as we prepare for a big 2015.”
Startups designated as ATDC’s Select Companies are those deemed most ready to succeed, get investors, and thrive as stand-alone enterprises.
They also receive one-on-one mentoring from an Entrepreneur in Residence (EIR) — businesspeople with a successful track record of developing and selling startups — as well as other offerings such as Industry Connect, which matches the startup’s offerings with the needs of the Fortune 1000.
“The market knows it means something to be an ATDC Select Company, that we do this full analysis of the company, and that if it passes all of the criteria, we admit them,” said Tim Sheehan, ATDC’s lead EIR and a serial entrepreneur whose credits include helping to build ESPN.com, Yahoo! Finance, and launch of E*Trade.
Indeed, more than 90 percent of ATDC Select Companies that graduate from the program remain successful enterprises five years after graduation. That’s compared to a national failure rate of 55 percent among all startups by their fifth year of operation.
Separated out, technology startups fare even worse, with a 90 percent failure rate.
“I know a lot of investors that if the company is an ATDC Select Company, they will always meet with them and seriously consider them,” Sheehan said.
It explains why so many startups vie to be admitted into the Select program, which at any one time has between 35 and 40 companies culled from the several hundred that apply each year.
“It is a special designation,” he said, explaining the process includes an analysis of 20 criteria ranging from the business model and uniqueness of technology to the leadership team and funding.
Both NeuroCruitment, founded by Bethany Bray, and Groundfloor scored high against all the benchmarks for admittance into the Select program.
“Some of Atlanta’s most successful startups have been incubated at ATDC, but ATDC is more than an incubator; it’s a community,” Bray said. “Being entrepreneurs isn’t as glamorous as it’s sometimes made out to be, and being a part of a community of fellow startups and mentors who are thought leaders in our industry, who can mentor and connect us, makes the journey all the more exciting and will, we believe, significantly increase NeuroCruitment’s chance of success.”