What if there was a blood test that would tell you whether a cancer treatment was working within a day instead of several months into the therapy?
Or a scope so tiny that it could shimmy its way into inaccessible parts of the brain and help scientists discover better methods to treat diseases like Parkinson’s?
Or what about a molecule that builds stronger bones even for those with postmenopausal osteoporosis?
This may sound like science fiction, but the potentially groundbreaking solutions are all being developed right here and right now in Colorado. And they’re getting a boost from the state’s economic development agency, which just awarded nearly $10 million in grants to these three companies and 40 other startups or researchers.
“The mission,” said Rama Haris, the state’s program manager, “is to fund the most innovative projects and the ones that will provide the best ROI to the state.”
With the economy in a lull and venture capital in decline, the state’s Advanced Industries Early-Stage and Retention Grant provides seed money to early-stage companies to prove a concept and figure out a business plan.
This includes companies like Modendo Inc., which sprung up from university research. The Boulder firm, still in stealth mode, received a $250,000 grant and is building ultrathin endoscopes able to reach “inaccessible regions for disease diagnosis and treatment.”
Longmont-based Beryl Therapeutics is developing a molecule that could reverse osteoporosis and treat bone health impacted by disease or aging.
It’s not just biohealth and technology concepts.
“This round had women’s health and education, wildfire mitigation, concussion treatment and mitigation, converting agro waste or other types of waste into renewable sources of energy or bio products,” Haris said. “We were excited to see those themes for this specific cycle.”
Early stage to commercialization
Aurora-based aiGENE, one of this year’s recipients, benefited from an earlier $300,000 advanced industries grant to help prove out a concept by working with university researchers. With its new $250,000 early-stage grant, aiGENE hopes to make a product oncologists can use at their office to see if a cancer patient’s treatment is improving before the next session.
“The recent award is to help us convert that into a commercial test,” CEO Floyd Taub said. “At our stage, it’s a significant amount of money that really helps us move forward. It certainly does motivate our investors.”
The science behind the test isn’t aiGENE’s discovery. Cancers shed DNA. An effective treatment means less cancer DNA is in the blood. If the cancer is growing, there’s more DNA from the cancer in the blood.
But what aiGENE is hoping to bring to market is a test that is fast and affordable. Its blood test analyzes a small sample for evidence of cancer DNA so after each treatment, it checks if cancer DNA is higher or lower. There are already tests that do this job but they can cost $2,500 to $5,000, require highly skilled workers and can take a week or month to provide results, Taub said. That doesn’t really help someone who has weekly chemotherapy sessions.
“What’s special about our test is it’s going to cost one-tenth that. And it can give a turnaround in a lab overnight the same day the sample is received,” Taub said. “We’re ultimately targeting a test that can be done in the oncologist’s office. A patient comes in to get another infusion. And the doctor tests in his office whether their blood count is OK and their chemistry is OK and can handle another infusion. We’re going to add the ability to determine whether the last infusion worked and whether the same therapy worked or whether the patient would do better on another therapy.”
The return on $128 million in grants
Giving local companies a leg up has long been part of economic development policy. Because when local companies grow, there’s the ripple effect of more workers who eat, shop and live in a community. The growing company also needs more resources, which feeds the growth of vendors, suppliers and other businesses. The reverse is true, too, so when jobs are cut, those laid-off workers will spend less and maybe move to cheaper locales.
And according to a 2019 analysis by the Economic Policy Institute, some work creates more economic ripples, including jobs in information, utilities and certain manufacturing sectors. One hundred jobs in durable manufacturing, for example, indirectly support 744.1 others. While 100 retail jobs indirectly add 122.1.
The Colorado grants, which are distributed from the Office of Economic Development and International Trade, target seven industries that increase the state’s economic productivity, such as aerospace, advanced manufacturing and bioscience. In the decade since it was launched, the program has funded 714 projects and provided $128 million in grant funding. Funding was recently extended another 10 years.
The return on investment so far?
Well, the state doesn’t ask for the money back. It’s a grant.
Haris, who’s worked on the program since 2016, said ROI is measured differently. They track each winner for five years. At the end of last fiscal year, June 30, 2022, grantees had created 4,400 jobs and 124 companies. Companies had attracted $2.5 billion from private investors and received 624 patents or other intellectual property. The combined projected annual revenue last year was $332.3 million, Haris said.
“We don’t take equity and we do not require them to pay anything to us. We also don’t take a stake in their IP,” Haris said. “Really, what we want to see is growth and how they have supported the Colorado economy through those different metrics.”
A modest return is OK, she added, because often at the early stage, doubling the size of the company can mean hiring three employees. Many are pre-revenue. And the grant amount — typically $250,000 or less — can only get a startup so far. Part of the award does require the winners to get matching private investment that’s twice the amount of the award.
“They’re not going to create 70 jobs with that amount of money. Hopefully, they leverage our investment for additional investment,” she said. “But we’re realistic in what kind of projections we’re expecting from them. And in my experience with the program, we have not seen anyone not grow, even just a modest amount.”
Vartega: More than modest growth
Six years ago, carbon-fiber recycler Vartega in Golden had four employees when it received one of the state’s early-stage grants for $250,000.
Last week, it held an open house at its new 82,000-square-foot manufacturing plant and headquarters in unincorporated Adams County. The facility can recycle 10 times more carbon-fiber waste than at its old plant in Golden. It now employs about 35 workers and plans to double its workforce in the next 12 to 18 months, Vartega founder and CEO Andrew Maxey said.
Growth has been more than modest. Revenues are on track to increase 500% from last year. And to date, the company has attracted more than $10 million in venture funding, and is working on more.
Even so, that early-stage grant in 2017 was really helpful, Maxey said.
“It was pivotal. It really did make a big difference for us early on. Because raising capital for early-stage companies is really hard,” Maxey said. “Early on, you’re asking people to invest in a dream or a vision. And that’s really where those OEDIT funds helped us reinforce that, hey, there’s a need there’s a desire to invest in this technology. And capital that’s willing to take a risk makes a big difference.”
Vartega started in 2014 to recycle scrap carbon-fiber materials about to be tossed by the aerospace industry. Its patented recycling process turns the waste into material that other manufacturers can use in all sorts of products, from automotive applications to sporting goods. As part of the state grant, it was required to report back to Haris’ office for five years. That wrapped up last year.
But Maxey said the support from the state continues. Haris attended the ribbon-cutting ceremony at the new plant.
“The state has been just a really good partner of ours. They do other things as well that helped to create jobs in Colorado and help with exporting of materials,” he said. “Helping to reinforce this ecosystem is really important.”
➔ Applications for the next round of grants starts July 3. >> Apply
➔ Searching for more small business and startup resources? Some options:
- Colorado’s economic development agency’s list >> Grants and programs
Take the poll: Summer jobs
Help us: Who’s hiring for the summer? Who’s looking for a job? Neither? Take this week’s poll anyway about when you had a summer job: cosun.co/WWsummerjobs
Other working bits
➔ Hidden costs of Denver homeownership? $14,500 a year. Property taxes, insurance, maintenance and utilities do add up as “hidden” costs of owning a house, according to a new report from Zillow. At least Denver’s $1,200 a month in “hidden costs” doesn’t rank in the nation’s top 10 states though it’s higher than the national average of $1,180 per month. What Colorado homeowners and renters have going for us is lower utility bills. The state is ranked the third-lowest for energy bills and fourth-lowest for all utilities, according to an analysis by Forbes. By comparison, according to Zillow, Denver’s cost in 2017 was $8,450, which was below the national average of $9,080. >> Report
➔ $10,000 in welding scholarships. According to the American Welding Society, the U.S. needs another 360,000 welding professionals by 2027. To attract more workers, Ontario-based Metal Supermarkets, a retailer with stores in Commerce City and Wheat Ridge, is offering $2,500 scholarships to four students enrolled in a post-secondary trade school program this year. Interested? >> Apply by June 30
➔ Still hiring: Colorado’s prison system. Colorado’s Department of Corrections is hosting at least five job fairs this month, including two that are virtual. Pay starts at $50,000 and there are up to $7,000 in hiring incentives. >> Details
➔ ICYMI: A major Colorado insurer goes under. As Friday Health Plans ceases operations, 30,000 Coloradans will need to find new coverage next year, reports The Sun’s John Ingold. >> Read
Thanks for sticking with me for this week’s report. As always, share your 2 cents on how the economy is keeping you down or helping you up at cosun.co/heyww. ~ tamara
Miss a column? Catch up:
- What’s Working: Welcome to summer 2023 travel season, as airlines and labor issues collide
- What’s Working: Colorado’s April job growth is the best in 12 months, but it’s slower than the nation’s
- What’s Working: Front Range rents were mostly flat in April. Here’s how they’ve changed over four years.
- What’s Working: The back-and-forth recession fears continue in Colorado’s economy
- What’s Working: Colorado women earned 85.4 cents for every dollar a man made in 2021
What’s Working is a Colorado Sun column about surviving in today’s economy. Email tamara@coloradosun.com with stories, tips or questions. Read the archive, ask a question at cosun.co/heyww and don’t miss the next one by signing up at coloradosun.com/getww.