Blackstone Builds Out Triangle Presence - 1

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Blackstone Builds Out Triangle Presence - 1
In January 2012, Blackstone came to the Triangle to set up the Blackstone Entrepreneurs Network (BEN). Until now, the group has maintained a relatively low profile in the Triangle. But I think we can expect that to change, as evidenced by a couple of recent announcements.

Earlier this month, BEN announced that 2014 will bring a Blackstone suite to HQ Raleigh.

Blackstone actually had a suite at HQ Raleigh last year and several Blackstone startups -- Sanitation Creations, Novocor Medical Systems, GemaTouch and Offline Media, to name a few -- have been HQ Raleigh members for a while. The difference this year is in the publicity of the announcement.

It was also announced this month that Blackstone will be funding space for 10 NC State spinouts at HQ Raleigh. This is entirely new.

So the group is building out their Triangle presence. But what does that mean? What does Blackstone want to accomplish in the Triangle?

The Blackstone Entrepreneurs Network Backstory

I first met Bob Creeden, Executive Director at BEN, last summer, but have rarely crossed paths with him since. So I called him last week to talk about Blackstone's recent collaborations and the BEN big picture.

Creeden, who spent the first part of his career in startup operations before spending over 20 years as a VC in Boston, explained that he came on board at BEN after the Triangle was chosen as a region of focus. But he told me that what Blackstone probably saw in the region was a lot of untapped startup potential.

"I think what they saw was an abundance of intellectual capital, four universities, a fair amount of strong clusters of life science and technology, but not as much generation and acceleration of new startups as in some other parts of country," he told me.

BEN was funded by a foundation affiliated with the international Blackstone investment firm and began working with Triangle companies in April 2012. The group's goal in our region, according to Creeden, is to have a positive economic impact by helping to build high growth companies that bring jobs and revenue.

There are lots of groups in the Triangle with missions that include supporting startups; BEN's niche is largely in the connections they provide and their focus on helping companies get investment dollars.

Since April 2012, BEN has worked with about 65 companies in the Triangle, with about 22 to 25 that are active inside the network at any given time.

The group reports that in 2013, 25 companies in the BEN network raised $47.9M.

The Network and University Partnerships

Although it maintains a connection to the New York-based Blackstone investment firm, BEN doesn't invest directly in their companies. Their support is structured around a network of Entrepreneurs in Residence who are experienced entrepreneurs and investors recruited from the region.

Every other week, Creeden and Sheryl Waddell, BEN Program Manager, present companies they've chosen as high growth potential startups to the EIRs. Each Blackstone startup is matched with a lead EIR who works directly with the company and acts as, as Creeden put it, "as the voice of the group to the company."

EIRs are also the voice of the company to the group. As lead EIRs work with their startups, they give updates to other EIRs, who might jump in to work on specific projects or provide connections. Blackstone Fellows (MBA students) are also available to help with research, financial models, or other projects.

BEN also has strong ties to its university partners: UNC-Chapel Hill, NC State, Duke, and North Carolina Central.

"The universities provide us with opportunities to look at, and we help the universities evaluate those opportunities," Creeden said.

Creeden explained that his group helps universities identify new technologies or student-founded startups that have high growth potential and then supports the entrepreneurs as they commercialize their technology or position their startups for success.

Through its partnerships, Creeden says BEN can pool the resources of all four universities to help any Blackstone company. So a UNC-Chapel Hill spinout that works with BEN could access prototyping technology available at NC State.

Recent HQ Raleigh Collaborations

Blackstone's recent HQ Raleigh collaborations include a renewal of the Blackstone suite at the new HQ Raleigh location and BEN's funding of another suite for 10 NC State Office of Technology Transfer startups.

Through the first partnership, five Blackstone companies and EIRs will have access to the Blackstone suite and HQ Raleigh coworking space while Blackstone will offer expertise and advice to all HQ Raleigh companies.

Creeden said that HQ Raleigh is "the right place to be with the right people running it."

I asked Jason Widen of HQ Raleigh why they partnered with BEN.

"Blackstone has the expertise, the funding, and has been huge supporters of HQ Raleigh from day one," he said.

To me, the second collaboration -- BEN's funding of space for NC State startups at HQ Raleigh -- is an obvious fit.

Bridging the transition from on-campus project to off-campus startup isn't a new goal for those behind HQ Raleigh (think ThinkHouse). And NC State saw the benefits of bridging this transition via space at HQ Raleigh. So Blackstone backed it.

Creeden told me that each year, BEN funds programs or resources to support entrepreneurship and innovation at partner universities.