Maryland's competition for startup companies — with three grand prizes of $100,000 each — was narrowed to nine finalists Monday.
The companies, based largely in Baltimore and Montgomery County, were part of an original field of nearly 260 in the InvestMaryland Challenge. Winners will be announced April 15.
The contest comes at a time of tight purse strings among the venture capitalists who invest in young firms. Venture capital funding in Maryland dropped 12 percent last year, mirroring a national contraction, according to the MoneyTree Report from PricewaterhouseCoopers and the National Venture Capital Association. The number of Maryland deals fell even more sharply — from 73 in 2011 to 54 last year.
All that makes a shot at $100,000 very welcome, said Sheila Connelly, vice president of research at GrayBug. The Baltimore pharmaceutical firm is one of three finalists in the competition's life sciences category.
Money aside, she sees validation value in the company's finalist status. It's something to bring up as GrayBug talks to potential investors.
"That is huge, and we're really excited about that," said Connelly, whose company is developing drugs to more effectively treat eye diseases such as age-related macular degeneration.
Baltimore-based BOSS Medical, an orthopedic medical device company, and College Park-based Remedium Technologies, which focuses on stemming traumatic bleeding, are the other finalists for the $100,000 life sciences prize.
Finalists for the InvestMaryland Challenge's information-technology category are Gaithersburg-based ClickMedix, whose mobile health services platform aims to connect patients and doctors in distant locations; RedOwl Analytics, a Baltimore corporate-data analytics company; and SocialToaster, a Baltimore social-media marketing firm.
The third category is "general business." Those finalists are i-lighting, a Cecil County company that specializes in LED lights for fences, stairs and the like; Mercaris, a Silver Spring provider of market data for organic and non-genetically modified agriculture; and Frederick-based Triea Systems, which helps companies produce heat from sources such as manure rather than fossil fuels.
Michelle D. Jackson, who is overseeing the competition for the state Department of Business and Economic Development, said the InvestMaryland Challenge is an effort to showcase fledging firms — companies in the "seed" and early-stage part of the business life cycle.
"We wanted them to get the type of exposure they need to continue to get their company off the ground," Jackson said. "We thought it would be a great way, as well, to connect startup companies to other entrepreneurs and [venture capital] firms and academic and business leaders throughout the area."
Nearly 80 judges — largely from the business community — scored entrants to decide the finalists. But more companies than the three eventual winners will benefit, Jackson said. Contest sponsors will pick entrants for additional prizes valued at $125,000, from research-and-development services to incubator space.
The competition was open to out-of-state firms, and 25 applied. None made the finalist cut. (Any out-of-state firm that won a grand prize would have had to establish operations in Maryland and spend more than half the prize money here.)
Neil Shah, chief executive at BOSS Medical, sees value in the competition's networking opportunities — especially to his team of first-time entrepreneurs from the Johns Hopkins Institutions. But he'd definitely like the cash.
The company, which has a prototype device to make bone-graft surgery less invasive, is finding potential investors uncertain about the health care market as the Affordable Care Act changes federal reimbursement practices.
"It's definitely not an easy road," Shah said.
RedOwl Analytics is deep into R&D on its product, aimed at helping companies squeeze illuminating information from internal data such as email and telephone records. Digital data can help pinpoint illegal activity or shed light on which employees are critically important, the company says.
More pilot projects would help "prove the product's viability," said Renny McPherson, co-founder and director of business development and strategy. Having $100,000 in hand to do that would be handy, especially now.
"We're primed to get to the market very soon," McPherson said.