By Stephen T. Watson
The Buffalo News, N.Y.
WWR Article Summary (tl;dr) Launch NY, a venture development organization that seeks to help startup companies in Western and Central New York has received a multi million dollar investment to expand its’ nonprofit. This article takes a look at how LaunchNY has helped “Rachel’s Remedies” get off the ground and succeed.
The Buffalo News, N.Y.
Rachel Jackson, founder of Rachel’s Remedies, said when she was starting her company that she didn’t think her idea for a product, a breast-feeding heating pack, would need clearance from federal regulators.
But Marnie LaVigne, president and CEO of Launch NY, told Jackson that the Food and Drug Administration likely would treat the product as a medical device. Jackson followed through on LaVigne’s advice to pursue FDA clearance, which came in May 2015.
“We’re the only hot-cold pack with FDA clearance,” Jackson said. “It just gives us a huge edge.”
Rachel’s Remedies also is the only company that has received seed money from Launch NY, the venture development organization that seeks to help startup companies in Western and Central New York.
That will change now that the Ralph C. Wilson Jr. Foundation has awarded a two-year, $2.5 million award to Launch NY.
The Buffalo-based nonprofit will use the award to boost its seed fund that provides investments to fledgling companies, to scale up the organization’s mentoring services for company founders and to support a strategic-planning initiative over the next 24 months.
Launch NY officials announced the award, the largest single grant in its history, Monday morning.
“This is just the beginning,” LaVigne said in an interview.
Wilson Foundation officials said they were looking to support entrepreneurial activity in the Buffalo area and to invest in a nonprofit that had a track record of success.
“This was a shovel-ready project,” David O. Egner, the foundation’s president and CEO, said in a phone interview.
Launch NY began operations in 2012. It has two full-time employees and is looking to hire a third. It is funded through a range of public and private sources.
The $50,000 that Rachel’s Remedies received earlier this year from Launch NY is the only money that the nonprofit has invested from its seed fund.
Jackson said she has used the money for the first round of manufacturing of her products, 2,500 double-packs; hiring a part-time marketing director and paying for promoted social-media marketing; and exhibiting at an industry conference in Washington, D.C. Rachel’s Remedies recently announced its heating pack is available in 90 Babies R Us stores nationwide and online.
The due diligence conducted by Launch NY before it put money into Rachel’s Remedies reassured other potential financial backers, Jackson said.
“It gave other investors a lot of confidence,” she said.
The Wilson Foundation funding will allow Launch NY to increase its seed fund investing to $500,000 per year, from $200,000 per year.
Launch NY also has mentored 500 companies in 27 upstate counties through its entrepreneur-in-residence program, and LaVigne said that those companies have gone on to raise $50 million in investment capital.
“Both parts of our mission are equally important,” said George Chamoun, Launch NY’s board chairman and a founder of information technology firm Synacor.
The award from the foundation, whose namesake was the founder and owner of the Buffalo Bills until his death in 2014, will be paid out over two years. Egner said that in addition to producing an economic impact, the foundation is seeking through its awards to Launch NY and similar recipients to produce a change in the business culture in Detroit and Buffalo.
He said he could not put a timetable on when the next awards from the foundation to organizations in Western New York and Southeast Michigan would be announced.
