ALung CEO Pete DeComo reflects on what he’s learned as an entrepreneur, shares advice, and has an odd item in his refrigerator
by Anne Parys, Director of Marketing, Rothman Gordon
August 30, 2017
You might say ALung Technologies is not Pete DeComo’s first rodeo, but, before joining ALung, Pete was the founder of Renal Solutions, a company that he started in 2000. ALung was founded even earlier, in the late 1990s, by a cardiothoracic transplant surgeon from UPMC and engineer/Ph.D in medical devices at the McGowan Institute. They realized the need for an artificial lung to assist patients whose lungs were failing. Pete likes to joke that ALung is probably the oldest start-up in Pittsburgh, going on twenty years. The company went down a path of developing technology to address the need for an artificial lung, but changed strategies in 2005 based on feedback from the market that the technology was moving in the wrong direction. Pete came aboard, first as a board member and then as CEO, after the sale of Renal Solutions. Since then, he has shepherded the company through various rounds of investing and testing. The technology has been approved in 35 countries, including France, Germany and the United Kingdom.
When asked “what is the end game” for ALung, a question Pete acknowledged that every entrepreneur will be asked by investors, he explains that in the medical device arena, the goal is to be acquired. The IPO market is nonexistent for medical devices, so the likelihood of an IPO is remote. Rather, the focus is to take the company to a point where larger, more strategic companies want to acquire it. That requires the entrepreneur to go further in mitigating risk, increasing the likelihood that a strategic acquirer will make an offer. As the US market is 50% of the medical device market, it is unlikely the company would be acquired before FDA approval. Luckily, ALung recently closed on $36 million in financing and will be commencing clinical trials for FDA approval, the brass ring for medical devices companies.
Although he is a seasoned entrepreneur, Pete shared some of his earlier experiences. His first experience with the 3 Rivers Venture Fair (3RVF) was as founder of Renal Solutions. He was chosen to present in 2002 at the first Fair. He was inexperienced as an entrepreneur and inexperienced at presenting at venture fairs, but he buckled down and did an immense amount of preparation for his eight minute segment. He laughs, “As an entrepreneur when you’re trying to tell your story, you can talk forever,” so condensing to eight minutes was a difficult task. But he has nothing but enthusiasm for the 3RVF and is planning to attend again this year. He shares,
“The interesting thing, and what young entrepreneurs have to realize, is it [the 3RVF] a tremendous opportunity to network and tell your story.”
When asked for advice for new entrepreneurs presenting at the upcoming fair, Pete offered a number of sound recommendations: “Know your material well – why is it better than existing opportunities? What differentiates you? Be able to tell your story in articulate manner and represent you know how to change the paradigm as it relates to the product offering.” He also warns,
“It will always takes more money than your think it will take and it always takes longer than you think it will take.”
Another reason Pete is a proponent of the 3RVF is he recognizes that entrepreneurs have to network and talk to anyone who is interested. He also stressed the need to be able to handle rejection, because most ideas are rejected 99% of the time. He recalls, “At the beginning, I though everyone would be interested and want to invest. When I got funded, I had done 250 presentations to 250 VCs, and out of that 250, five invested. Not a great success ratio – there’s a lot of rejection but that’s the way it goes – you have to find that particular investor who has an specific interest in your technology, your type of market, and is interested in what you are doing – that takes a lot of presentations and perseverance.”
He also suggests being strategic: what are you developing? What is your technology? It takes a lot of study and networking – not only with investors, but other entrepreneurs – to reach the right people. Pete advises entrepreneurs to contact investors interested not only in their specialized space but also their stage of investment – there are early stage investors, mid-stage investors, and late stage investors. Try to be targeted in your approach.
On a lighter note, the last book he read is called The Serving Leader. He was interested in it as a student of leadership and believes that many entrepreneurs lack the skills necessary to take a company from founding through various stages to exit. Entrepreneurs need not only to be risk takers, but also good managers and good leaders who can put together synergistic teams. Because so many start-ups often operate lean, he feels the need to create a culture where employees are excited about the company, the technology and the people they work with. The Serving Leader is about empowering others to be productive members of that team; provide them with the resources they need, articulate the vision and mission of the company, and then get out of the way.
When asked what he does when he’s not networking or raising capital, Pete says, “I make my own wine and a variety of Italian meats and I have a wood fired pizza oven in my backyard, so we love to have parties where we can serve homemade sopresatta, homemade wine, and homemade pizza.” You might think home cured meats are the oddest thing in Pete’s refrigerator but it’s not. “Pickled herring, and I hate pickled herring.” Pete shakes his head. “It’s a great protein source, my wife says, and she loves pickled herring but it’s the oddest thing in my refrigerator and I wish we didn’t have it in there.”
About Peter DeComo:
Peter M. DeComo, the Chairman and Chief Executive Officer of ALung Technologies, Inc., founded and shepherded Renal Solutions to a $200 million acquisition by Fresenius Medical Care in late 2007. In addition, he is a registered respiratory therapist, and has an extensive background in extracorporeal therapies. ALung Technologies, Inc. is a privately-held Pittsburgh-based developer and manufacturer of innovative lung assist devices. Founded in 1997 as a spin-out of the University of Pittsburgh, ALung has developed the Hemolung RAS as a dialysis-like alternative or supplement to mechanical ventilation. ALung is backed by Philips, UPMC Enterprises, Abiomed, The Accelerator Fund, Allos Ventures, Birchmere Ventures, Blue Tree Ventures, Eagle Ventures, Riverfront Ventures, West Capital Advisors, and other individual investors. Hemolung RA is currently available in the EU and Canada and undergoing trials to be approved by the FDA in the United States.
About the Author:
Anne Parys is the Director of Marketing for Rothman Gordon. In addition to developing and implementing annual and long-term marketing plans, she works with every attorney to develop their own marketing strengths and initiatives. Anne oversees all aspects of marketing, including budgeting, PR and advertising, market research, branding, and all print material and social media. Her articles have been published in the ABA’s Law Practice Today, TechnoLawyer, ACBA’s The Lawyers Journal and The Pennsylvania Lawyer.
by Jonathan Kersting, VP of Communications and Media, Pittsburgh Technology Council
July 21, 2017
Deal flow is the lifeblood of every investor -- large and small. And that is especially true for Connetic Ventures in Covington, Kentucky.
An investment firm with a focus on early stage start-up companies, Connetic Ventures participates with venture capital firms and angel syndicates for companies that are in the late seed stage. It focuses on developing investment strategies and deploying them on startups to build up their portfolios.
"Our core investment strategy is to see more deals so we can do more deals and create a diversified portfolio," said Kyle Schlotman, Partner and Chief Investment Officer at Connetic Ventures.
"We believe diversity amongst industry, platforms, geography and founders is a good thing."
With a focus on technology companies in the Midwest, the 3 Rivers Venture Fair has become a powerful resource to widen Connetic Venture's deal flow funnel as it approaches 40 companies in its portfolio, said Schlotman.
The 2016 3RVF last April drew more than 140 capital-raising entrepreneurs resulting in more than 1,400 meetings between investors and entrepreneurs. In particular, Schlotman liked the "speed dating" portion of the conference to get in front of numerous deals in a short amount of time.
And, it's not just the quantity of deals, it's the quality. Last year, Connetic Ventures set up more than a dozen follow-on meetings with potential investments and did a deal with Healthy Roster out of Columbus, Ohio.
"At Connetic we believe time matters: finding great ideas whose time has come with great teams we believe can execute quickly is what we are all about," said Schlotman.
At this year's 3 Rivers Venture Fair, Schlotman said he is looking forward to meeting with companies in the fintech, blockchain and cybersecurity spaces. His advice to entrepreneurs pitching him or any other potential investor:
"I hear more than 2,000 pitches a year. Make your pitch an amazing 30 seconds!"
About Kyle Schlotman:
Kyle Schlotman is a 2008 graduate of Indiana University where he majored in Finance, Entrepreneurship and Legal Studies.
After Indiana University, he went onto work for JP Morgan and Sagent Advisors as an Investment Banking Analyst with a focus on Retail and Healthcare. Transaction Advisory history includes, ImClone's sale to Eli Lilly, Pfizer's acquisition of Wyeth, Pavestone's sale to OPUBCO, Merck's merger with Schering-Plough and a Digicel Debt Offering.
After working on Wall Street, he joined dunnhumby/84.51 in 2010 where he led consulting projects for Retail and CPG clients such as P&G, Kroger and Brown-Forman.
Kyle is now a Founding Partner and Chief Investment Officer of Connetic Ventures, an early stage (Seed and Series A) investment fund based in Covington, Kentucky.
About the Author:
Working at the Pittsburgh Technology Council for 20 years, Jonathan Kersting has tracked and documented the growth of Pittsburgh's innovation economy through his work publishing TEQ Magazine and Made in PA Magazine and co-hosting TechVibe Radio on Newsradio KDKA 1020 AM. The Pittsburgh Technology Council was founded in 1983 as one of the nation's first regional technology trade association with a mission to help technology companies succeed.