- [Announcer] Live from your public media studios, WVIA presents "Keystone Edition Business," a public affairs program that goes beyond the headlines to address issues in Northeastern and Central Pennsylvania.

This is "Keystone Edition Business."

And now, moderator, Kris Jones.

- Hello, I'm Kris Jones.

Benjamin Franklin lived a revolutionary life, much of it here in Pennsylvania.

You can learn more about the founding father in an upcoming Ken burns documentary here on WVIA.

But tonight, we're talking about Ben Franklin Technology Partners, a group that's revolutionized investing in early stage tech companies and manufacturers.

Do you have questions about what Ben Franklin Technology Partners does and how it can help you?

Email us AT keystone@wvia.org.

Tag us on social with the #keystonebusiness.

But first, WVIA's Paul Lazar has some fast facts on Ben Franklin Technology Partners.

- [Paul] Ben Franklin Technology Partners got its start right here in Pennsylvania in 1983.

BFTP invests in technology oriented companies to ensure financial and economic growth and foster job creation and retention.

BFTP has four regional offices and 10 satellite offices throughout the state.

Ben Franklin Technology Partners of Northeast Pennsylvania covers a 21-county area that includes Carbon, Luzerne, Lackawanna and Columbia counties, including a business incubator in Bloomsburg.

The organization supports both early stage tech firms and established manufacturers through capital investments, business expertise, and infrastructure.

It also fosters a connection with university resources including faculty and students.

BFTP is also a strong contributor to the state economy.

A nonpartisan research organization found that from 2012 to 2016, BFTP generated $3.90 cents of additional state tax revenue for each dollar invested in the program.

It also produced more than 11,000 jobs and those jobs paid on average more than $79,000 a year.

For more information on Ben Franklin Technology Partners, head to wvia.org.

For "Keystone Edition Business," I'm Paul Lazar.

- Now, let's meet the regional manager of Ben Franklin Technology Partners of Northeast PA, Ken Okrepkie.

Welcome back, Ken.

- Glad to be here.

- Yep, absolutely.

It's great to have you back on the show.

Last time, we had you, you were just one of three guests.

Now, our viewers have you for the next half an hour, which is awesome.

Why don't you go ahead and set the stage for our viewers.

Tell us more about Ben Franklin Technology Partners.

- Well first, let me say thank you for giving us an opportunity to talk a little bit about the technology sector here in Northeastern Pennsylvania.

When we talk about the tech sector, I might initially say Dunder Mifflin, right?

And you'd say, "Ken, but that's a fictitious company associated with the sitcom, The Office based in Scranton."

But if I said ChannelApe or Signallamp Health or Noble Biomaterials or TMG Health or American Paper Bag, or studio BE Mindfulness or Nexii, well, those are all real companies growing here in Northeastern, Pennsylvania.

And what they all have in common is that they're in Ben Franklin Technology Partners of Northeastern Pennsylvania's investment portfolio.

And that group of companies have generated over 2,000 jobs here in our community.

As for Ben Franklin, we were founded in 1983 under the Governor Dick Thornburgh's administration with Lieutenant Governor Will Scranton.

And we were founded to invest in innovation and technology to create jobs in the Commonwealth of Pennsylvania.

So there are actually four Ben Franklins, one in Pittsburgh, one in Philadelphia, one that runs from Erie to Harrisburg, and then our Ben Franklin covers the 21 counties that you heard mentioned just a few moments ago.

I'm specifically responsible for the deals that take place from Pike County to lower Luzerne County and north to the New York state border.

And Kris, I would tell you that there's a tech hub percolating here in Northeastern, Pennsylvania along the I-81 corridor.

And so I look forward to our conversation here tonight.

- Yeah.

It's so exciting to have you here to dive deeper into each of these topics and to share some of the excitement and some of the success stories, but let's better understand a little bit about how you evaluate your success.

In the intro, we talked about nearly $4 coming back to our state for every dollar invested.

It seemed like jobs.

And you mentioned it even just now are a primary metric.

So how does Ben Franklin know that it's doing its job?

- Yeah.

We would like to say that Ben Franklin Technology Partners is a job creation factory.

We're funded through the Pennsylvania Department of Community and Economic Development.

We're a line item in the governor's budget.

And that line is approved every year by the legislature.

So we're supported both by the Democrats and the Republicans.

And our goal is to invest the dollars in early stage technology companies and support manufacturing companies through innovative products, projects that help to create and retain jobs.

So unlike a traditional venture capitalist that would only be looking for a return on investment, in our case, if we can help account company create 20, 30, 50, 100 jobs or more, TMG health is more than 1,500 employees in the Commonwealth of Pennsylvania now.

OraSure down in Lehigh Valley has created over 300 jobs.

That's where we get our return.

And that's where the Commonwealth of Pennsylvania gets its return.

And because every one of those companies that are growing in our communities has a positive impact is they pay the salaries as you saw 52% higher than the average wage in the Commonwealth of Pennsylvania.

So not only do we have companies that create jobs, but then you heard that there's for every dollar we invest in a technology company or in one of our projects, they create $3.90 cents in tax revenue back to the Commonwealth of Pennsylvania.

So an investment in Ben Franklin actually happens to be a good investment in the Commonwealth of Pennsylvania.

So it's taxpayer dollars, but it's taxpayer dollars that create a return on that investment.

- So you and I have known each other now for over two decades, and there's a reason.

I'm an entrepreneur.

And one of the things I admire about what you've done for your portfolio companies is really get behind their stories, really get behind what it is that makes an entrepreneur tick.

So when I think about Ben Franklin, I think about it as a hub for entrepreneurs.

Can you talk more about your sort of perspective and point of view on the importance of entrepreneurship and what Ben Franklin tries to do to help them?

- Yeah.

So I have a portfolio of more than 40 companies just located in that six counties here in Northeastern, Pennsylvania.

Most of those entrepreneurs come to Ben Franklin because they need capital.

They're trying to find their first investor and we tend to be the first outside of family and friends, a kind of an institutional entity that puts money into that company which allows them maybe to hire that first staff member or the developer or help them commercialize their technology for their first customer.

That's important.

The money is a value to that entrepreneur, but all of the resources that we can bring to bear to support their marketing strategy to help them manage their cash flow, we put them through a due diligence process.

So it's very similar to an angel investor or a venture capitalist so that they can understand the questions that investors ask.

Because for every dollar that we invest in a company, they'll leverage our investment at least five to one.

And in some cases, raising tens of millions of dollars.

For our companies in our 21 counties last year, they leveraged our investment to raise more than 60 million.

So not only is it the money and not only is it the guidance and the resources that we can bring to those entrepreneurs, but we put them through a process that prepares them to raise additional dollars.

- Yeah, that's awesome.

And I hope the viewers will stick around with us here.

I wanna do a little bit of a deep dive on this idea of venture capital, because at the end of the day, as I was prepping for this interview today, I was reading through all the materials and I thought to myself, "Ben Franklin Technology Partners in, from my point of view is every bit a venture capital fund."

So I have some questions specifically around this idea of putting money, investing money into these companies.

So the first question is how do you find deals?

How do you find those deals?

And then secondarily, how does the company get on your radar?

- Yeah, so I say, we find deals through the entrepreneurial ecosystem that's here in Northeastern, Pennsylvania, whether it's NEPA Alliance or the small business development centers or the chambers of commerce for Scranton, Wilkes-Barre, Hazleton, the can do organization.

They all know that we can bring dollars and resources to help entrepreneurs.

So when they find an entrepreneur that's located in Northeastern, Pennsylvania that fits Ben Franklin's mission to create jobs and has a scalable business opportunity, they send them to us here.

They send those companies, those entrepreneurs to Ben Franklin, but we also have an incubator network.

There are seven business incubators here in Northeastern, Pennsylvania, 14 within the 21 county.

So Ben Franklin Technology Partners of Northeastern Pennsylvania has one of the largest business incubator networks in the country.

- Yeah, no, that's awesome.

So you have partners, and the partners are making referrals.

- [Ken] Absolutely.

- So I guess one bit of advice to someone who might be one watching that would like to get an introduction, could go through one of the partners that you mentioned.

And later on in the show, we're gonna talk about some of the other sort of let's call them open casting calls and other opportunities you guys present through programming and events.

- And, Kris, I would just like to know that if you have an entrepreneur that's listening to this program tonight, I welcome the opportunity to have a conversation with them.

And maybe they're a little early for Ben Franklin, but we can get them to the right resources here in Northeastern, Pennsylvania so that they can move forward toward commercialization or toward job creation.

And if they're ready, then maybe Ben Franklin could make an investment.

- Perfect.

So introduction's made or they get your ear or they get your time.

- [Ken] Absolutely.

- How do you vet a deal?

In other words, how do you take a look at the opportunity and say, "This checks the box and is worthy of the investment."

- Yeah.

And I would say this is where we're probably most similar to a venture capital firm.

They we're asking a lot of the same questions, right?

So who is the management team?

Do they have experience in the industry?

Do they understand where their customers are coming from?

What is their repeatable sales process?

Do they understand what is the value proposition that's associated with their product?

What does it take to develop whatever the product is?

Whether it's a mobile app or whether they're building a product in a manufacturing setting.

Do they understand the cost associated with acquiring a customer?

And then I always go back to how do they find that repeatable sales process so they can replicate it time and time again to generate the revenue that allows them to hire more individuals.

But in the end, it's less about the technology it's more about, is there a market opportunity big enough so that they can scale, so that they can create jobs here in Northeastern, Pennsylvania?

- So should have entrepreneur business expect a similar deal structure to what they might get if they brought in an angel investor or say, a Silicon Valley venture capitalist?

So how does Ben Franklin Technology Partners tend to structure deals?

- Yeah, so Ben Franklin provides a loan with warrant options.

So we provide a loan that's an opportunity for an entrepreneur.

Let's just say we made an invest, we can invest up to $100,000 in a given round.

And let's just say, we made $100,000 investment in a 10-month project.

That entrepreneur would draw down those funds month over month.

So maybe $10,000 a month.

And then to the end of that, 10 months start to pay us interest only.

Our loan is not personally guaranteed.

It's collateralized on the business.

And then there's an upside opportunity for us to have a warrant option which gives us the chance if we're interested to purchase equity at the price of the round as it starts.

So that's how Ben Franklin structures its deal.

It's a loan with warrants.

If you're talking about angel investors, they may structure their deal as a loan.

They may structure their deal as a convertible note.

And then even some folks out there now, there's a safe note which pushes the valuation date to a later date.

And then a venture capitalist is gonna look a different set of terms that kind of reach, may even restructure the deal in a little more detail.

But they're all looking for different return on investment.

In Ben Franklin's case, this is where we kind of part ways.

In Ben Franklin's case, that job creation is very important.

An angel investor is probably looking for a five or a seven X return, and a venture capitalist is probably looking for a 15 to 20 X return.

So they each have a different threshold that need to be able to see that that company can grow aggressively enough to potentially provide that return on investment.

- Cool, great.

So there's two primary sort of types of businesses you invest in, early stage technology businesses and we'll call it sort of manufacturing innovation companies.

The first one we're gonna chat about is early stage technology.

And we're gonna show a clip of Jen Ciarmboli who's the CEO of studio BE in Wilkes-Barre.

So let's go ahead and watch that video.

- studio Be is a digital wellbeing platform that serves corporations, teams and people with whole health wellbeing solutions that can be accessed either on demand or through live virtual engagements with expert resources from around the globe.

I got involved with Ben Franklin Technology Partners through the Wyoming Valley Chamber of Commerce.

We were early on in 2019 and understanding how our services and resources could be accessed and expanded and realized at that point that we needed to develop technology to make our services more scalable, especially in serving remote locations, teams and people.

It was a game changer for us as a small company, understanding the resources that were available to us.

And we took full advantage of the opportunity.

Ben Franklin Technology Partners has been instrumental in our ability to navigate, especially the pandemic.

But navigating those early years, there's no way we could have stayed in business without the support of Ben Franklin Technology Partners, not only from a financial perspective, but more importantly, from a resource perspective.

They were so supportive in helping us make good decisions in understanding what other resources were available through the state of Pennsylvania.

They opened us up to the network of resources throughout the state that Ben Franklin has cultivated over the years.

And they introduced us to investors, both a venture capital investors and the angel network in Pennsylvania.

So really, that relationship is our most important strategic relationship.

We really lean into them as much as possible.

- So incredible.

You have an entrepreneur who says that the money is secondary to the power of your network.

So I'd like to double click on this and to have you share a little bit more about the power of this network.

So you guys are like, I wrote this down in my notes, you're the ultimate collaborator and facilitator.

So the money's nice, but your ability to plug these companies into your network.

So speak more about it and share maybe an example of how this works.

- Yeah.

So you asked the question before, I wanna circle back to.

The number one reason we invest in companies is entrepreneurs.

And you can see Jen Ciarmboli is an example of an entrepreneur that's off in the right direction.

But when entrepreneurs come to us, they come to us probably without full management teams and without, maybe never have started a technology company before.

So they come to us with passion, they come to us with energy, and they come with a vision of where they wanna take their company.

And to many cases, they come to us because they think they need capital in order to hire some of those initial resources.

But absolutely, every entrepreneur who comes through Ben Franklin technology partners, at the end, when they get to the exit, they say the most valuable part of the journey was, were the resources that Ben Franklin can bring together.

So in Jen's case, we may support her with bringing on QuickBooks.

We may support her with bringing her resources to help her understand the financial modeling that goes in to preparing a company.

We may identify a resource to help her integrate HubSpot which is a lead generation tool.

So it helps seamlessly integrate the leads into her sales funnel.

We may bring someone in to help her flush out her pitch deck so that when she makes a presentation to angel investors or other venture capitalists.

The benefit to Ben Franklin is the return on investment is not my number one priority.

My number one priority is to help this entrepreneur reach his or her fullest potential.

And that means standing side by side.

So when they have a problem, they pick up the phone and they call and say, "Ken, do you know someone who can do this thing?"

And we have a solutions network of 750 resources to help solve those problems.

We can also provide capital.

I'll provide a business technical assistance grant to our entrepreneurs to help solve that problem.

So for example, Build My Team in Honesdale, Pennsylvania today met with an industry expert on top of the funnel, right?

So they have a process.

When they get a lead, 87% of the times, they close that lead.

They just need to get more customers in the top of that lead funnel.

So we're gonna pay that consultant $4,000 to come in and work with them for the next 30 to 60 days to help them increase the number of leads in top of that funnel.

- Super, super interesting.

And the one point that Jen made is that you're a facilitator of introductions into other investors, which is big.

And in this next video, I think it's Ian Robson, the CEO of American Paper Bag talks about this as well.

So let's go ahead and show that video.

- American Paper Bag is the next generation paper bag manufacturer.

We have the widest range of paper bags.

We have the most efficient, and at the same time, we have a very, very sustainable system.

We got involved with Ben Franklin right at the very beginning of the project.

In fact, before we even set up in the US, we had to look around a lot of different areas.

When we first started looking at Northeast Pennsylvania, we got brought in at the same time as the governor's action team, Ben Franklin, and the Wilkes-Barre, the Greater Wilkes-Barre Chamber of Commerce.

We met altogether.

And we're able to tie everything up at the same time.

Well, Ben Franklin was the first group that actually gave us any kind of funding.

What that did was it, because it's a well respected group and that helped us bring in more and more investors into the company as well.

So I think, A, without the initial funding from Ben Franklin, we wouldn't have got past the initial stage in the setup, in the startup.

And then B, also, just having that as the Ben Franklin funding banner, that it enabled us to bring in some bigger and better and more financially capable investors into the project.

I think without that, we wouldn't have been able to get the whole project off the ground.

As I said before, I think what it's also done is it's enabled us to go more advanced manufacturing that bit quicker.

With that extra bit of help, it's enabled us to bring in some new technology that we wouldn't have been able to do if we hadn't been with Ben Franklin.

It's been a vital part of it because what we've been able to do is with that funding, we've been able to go quicker on some of the more advanced manufacturing techniques and enabled us to bring in a variety of different kind of printing that we wouldn't have been able to do if it hadn't been for the setup.

So we've been able to use that to get some quite good and some quite big customers in a much shorter period of time.

I think the great thing about Ben Franklin is it's very flexible.

So if you've got projects, bring somebody in from Ben Franklin, have a chat with them and be open about what you need, what you'd like to do.

And they may well be able to have programs available to you, or at the same time, they may have an ideas thinking, "We can do this."

How Bobby thought about this kind of project.

I think it's a great system.

- The takeaway from Ian for me is that you're able to help manufacturing companies, be innovative, move faster, gain access to more advanced tools and machinery and technology.

And so how do you think about investing in a manufacturing company versus a, just a technology company?

Or do you see them as the same?

- Well, I'm gonna shift gears a little bit.

Before I do, I wanna note that Ian and Jen, those two companies have raised collectively millions of dollars after coming into Ben Franklin's initial investment and that's what love to see.

And their testimony has clearly said better than any way that I possibly could.

We've talked a lot about early stage technology companies here tonight.

We also support manufacturing firms.

So there are many firms in Northeastern Pennsylvania that your viewers may recognize whether it's Gentex or CornellCookson, and, there, InterMetro, McCarthy Tires.

These are companies that we've done projects with to support either product innovation or new process improvement.

So we essentially help those companies be as strong as they possibly can where we can bring a team of experts from a college or university to come in a center of excellence to address, maybe it has to do with too much scrap, or maybe it has to do with inventory that is not transitioning through the manufacturing process in a way that that should, supporting the Lean Six Sigma strategies of making a manufacturing firm as strong as possible.

And what I'll do for that manufacturing company is I'll provide them with a grant.

It's match dollar for dollar, and it's up to $50,000 to help them accomplish a goal that they know they, a challenge that they know they have.

Usually what happens is the plant manager or one of the engineers within the facility, They know they have a challenge, but they just don't have the time to go and address it.

And so what they do is they call Ben Franklin Technology Partners.

I identify a resource and then I can also pay for 50% of that project to help them be as strong as possible.

In some cases, the folks that make the determination whether a manufacturing firm stays or leaves Northeastern Pennsylvania is not located here in Northeastern, Pennsylvania.

So where we can make sure that the balance sheet and the income stays as strong as possible.

We wanna do everything we can to help those manufacturing firms.

So you have large organizations that you're familiar with then you drive up and down the valley, you see their names.

And there are companies like American Paper Bag, a small manufacturer that when we made an investment was an idea, and now, he has 46 employees.

And I was in his plant the other day.

And he said, "Ken, if I get this customer, I'm gonna need to add another 50 employees."

So there's a fast growing company that's here in Northeastern, Pennsylvania.

We can help them in one sense as an early stage technology company.

And as another sense, help them solve the chain challenges they may have on the shop floor so that they can meet their fullest potential.

- So guess what?

We only have about two minutes left.

- [Ken] Okay.

- But I do want you to share more with the viewers.

You have two annual events.

One is called iXchange, and the other is called Ben Franklin Technology Partners Venture idol.

Can you share a little bit more about both?

- Yeah.

So venture idol is an opportunity for eight of our companies to present to angel investors and venture capitalists.

We do that.

We run that program or coordinated in November, and it gives us an opportunity to feature some of our best and brightest, and then help those companies.

When we talked about leveraging our investment from every dollar to five, the Venture Idol program is an opportunity for us to accomplish that task.

And we've had some of the folks up here in Scranton, Wilkes-Barre, and Hazleton win Venture Idol on a number of occasions.

The iXchange program is our award ceremony.

It's May 8th.

And this year, because it will be free, it's virtual.

Because it's virtual, it will be free.

So any of the viewers, we welcome you to log in to or go visit nep.benfranklin.org, and then click on the registration link.

And you're welcome to see our award celebration.

And every year, we have a national speaker that provides extremely wonderful content that is relevant to any entrepreneur who may be starting a business.

- Who's this year's speaker.

- You know what?

I'm not 100% sure on that.

- Not confirmed yet?

- No, it is confirmed, but I just don't remember who was speaking.

- So we've got about 40 seconds left.

So one of the things about the Venture Idol that I think is super cool that you guys do and share with the viewers, you use these bucks and people vote, and that's how they get funding.

- Yeah.

So we let the audience select the winner of Venture Idol.

So, and that morning portion of the program, our entrepreneurs present to angel investors and venture capitalists.

The evening part of the program, they actually present to an audience of about 200 people.

And those 200 individuals have what we call Ben Bucks.

And they decide by deciding how they would want to invest that $100 in Ben Bucks to the company that they felt did the best job and is best prepared to grow and can be part of the selection of the winner each year.

- And there's what?

$20,000 on the line?

- And then approximately $20,000 will distribute among the three finalists.

So those eight are selected down to three, and then those three finals will present to that audience, and then the audience actually selects the winner.

So we give our entrepreneurs an opportunity not only to get an investment from Ben Franklin, but then also move through and participate in things like Venture Idol.

- Excellent.

Excellent.

Well, I would like to thank Ken Okrepkie for participating and thank you for joining us.

For more information on this topic and how Ben Franklin Technology Partners can help you, please visit wvia.org/keystonebusiness.

And remember, you can rewatch this episode on demand anytime online or on the WVIA app.

For "Keystone Edition," I'm Kris Jones.

Thank you for watching.