After graduating with his MBA in 2006, Zajicek joined NTEC that November and became its managing director of medical technology in 2011.
The NTEC Connection: Zajicek joined the incubator at the same time it was preparing to expand. By October 2008, NTEC had moved out of 10,000 square feet of provided office space into its own, 50,000-square-foot building in Frisco.
The incubator went from a dozen offices to 80 offices and from having only a dry lab to 10,000 square feet of wet lab space. It also added thousands of dollars worth of common-use medical technology equipment and a machine shop for making prototypes.
NTEC markets itself to entrepreneurs on its flexibility to allow them to grow or contract as needed. Entrepreneur Clark Terrill is a case in point.
For Terrill, NTEC had the ability to help his early-stage firm reach the next level of growth.
“It was around 2006, and we decided we needed growth capital,” says Terrill, a Plano native who with his father had bootstrapped MDConnection, then a California-based company marketing Web-based management technology to physician groups.
“We were doing well, but weren’t cash-flow-positive yet,” he says. “At the time, we were strictly self-funded. We reached out to friends to ask who could help us, and we were introduced to Larry Calton [NTEC’s executive director] and Hubert.”
After meeting Calton and Zajicek and making a presentation to the board, MDConnection was accepted into the incubator, where it had access to affordable rent and a company adviser: Zajicek.
The first thing NTEC did was help the startup form a company board. Using Zajicek’s Rolodex, they tapped people with skill sets complementary to the company. Those advisers helped MDConnection make connections with venture capitalists, write a new business plan, and prepare investor presentations.
“While we had a business plan, it was really outdated, and our strategy changed,” Terrill says. “The business plan wasn’t really adequate for what we wanted to do. Hubert helped us re-strategize and get something that would make sense for investors.”
Unfortunately, MDConnection wasn’t able to raise capital. Part of the problem: the Great Recession had hit.
“Nobody was investing. There were no deals being done,” Terrill says. “VCs were not closing their funds. We were fundraising, really, at the wrong time. But the happy side to that is it forced us to make some strategic decisions to bootstrap ourselves and get to profitability without investors, which we did thanks to Hubert’s strategy and the board he put together.”
Terrill says there’s no question that the company reached profitability faster due to NTEC’s resources, advisers, and strategic help. “We had no idea how to open those doors,” he says. “And really that was all Hubert. He was our main adviser.”
For OxySure Systems, one of NTEC’s first companies, the medical hub proved to be a perfect fit, even for the short time it was there. The company, which makes medically pure oxygen from a powder technology, moved into NTEC in early 2004 and stayed about two years. It is now housed across the street in its own facility, built with the help of incentives from the Frisco Economic Development Corp.
“For us, back then, it was a network to plug into for advice and ideas,” says Julian Ross, OxySure chairman and CEO. “We’ve maintained our relationships. I look at NTEC and how it has grown since we left. A big chunk of it is under Hubert’s leadership.”
Medventures Success: Besides his dedication to advising companies, Zajicek also has led the charge on NTEC’s successful MedVentures conference, now in its fourth year.
Mike Bartlett, an angel investor and himself an entrepreneur, attends the conference every year, often serving as a panelist. He met Zajicek while Zajicek was still a UTSW professor. Bartlett, who spent a career at Texas Instruments, was the initial chairman of the North Texas Angel Network, where he remains an active member. The group has about 55 accredited investor members who meet 10 times a year to review startups and make investments.
“Lately, probably our biggest area of investment has been in medical startups,” Bartlett says. The network has invested in a handful of NTEC companies.
Joe Cunningham, a venture capitalist and medical doctor, is another investor keeping tabs on NTEC, MedVentures, and Zajicek, whom he’s known for about nine years.
Cunningham is managing director of Sante, a VC firm based in Austin and Houston that closed its $130 million Sante II fund in December 2011. With all its investments in life sciences, Sante focuses on the middle of the country with a preference for Texas-based entrepreneurs. Sante has not yet invested in an NTEC firm, but that doesn’t keep it from maintaining close ties and continually watching for investment opportunities.
Cunningham firmly believes cities like Dallas need business incubators like NTEC to grow a life-science entrepreneurial community. Dallas, historically, has lagged behind Austin and Houston in entrepreneurship, he says, but incubators like NTEC are helping to raise DFW’s profile.
“Every city in America sees biotech as a hot area,” Cunningham says. “The ones that succeed in transforming into a hub are when they have a hit. That’s how Austin became an IT center. There is some degree of luck involved in that.”
Zajicek is circumspect about the big “hit” concept. He admits NTEC is still on the hunt for a company that makes it big after being nurtured there. But he believes DFW as a whole is well situated for medical technology growth.
“We are still chasing the elusive big hit—which could be a good thing, because, with a big hit, you can also get a big fall,” he says.
“You have to let capitalism run its course,” he adds. “Do we play a role in facilitating startups, propping them up? We are very sensitive to that. We want to help startups, but they have to raise capital based on the criteria that the market sets for them. I could help you all I want.
If the investor isn’t going to put money into you, you are not fundable.”
Nickel’s DxUpClose, meantime, is in the midst of raising $1.1 million in its Series A funds. The funding should get it through the development process into the next phase—manufacturing validation. She credits NTEC, and Zajicek, with helping quicken the company’s growth pace.
“Hubert—the blend between his research background and his business expertise—is a good thing to have in an incubator like NTEC,” Nickel says. “He understands the scientific technology, and he understands the business. When he gives advice, it always tends to be very good advice.”