Latest UMass Lowell incubator business takes flight

08/03/2007
By Used with permission from the Lowell Sun Online. By REBECCA LIPCHITZ

LOWELL- As the head of a company "graduating" from the UMass Lowell incubator program, Roger Winsby has been asked to defend his company's aim.

"'Where's the nanotechnology?' they ask," he said. "I have to say, 'No, this is about brain power.'"

The UMass Lowell business incubator is best known for launching the nanotechnology wunderkind Konarka Technologies, a Boott Mill-based company that uses nanotechnology. Yesterday it officially nudged from the nest Axiom Valuation Solutions.

Winsby and Stanley Feldman, associate professor of finance at Bentley College in Waltham, founded the $2.5 million, seven-employee company in August 2001 at the UMass Lowell business incubator program. The program takes place in the Research Center, housed at the Wannalancit Mill.

The company is moving to Wakefield next week to make it on its own, but a piece of UMass Lowell is going with it.

In addition to using students to help build the company, the university owns stock in it as well. UMass Lowell provided space, student labor and an investment of less than $50,000 to get Axiom going.

The company helps small businesses determine their worth for thousands of dollars less than standard valuation services.

Some of the services Winsby and Feldman provide include helping small-business owners determine how much they need to retire; how much insurance to buy; how to attract an investor or a buyer; how to split up with a business partner or determine how a business is growing; and how to determine how much their business is worth.

In the early '90s, Winsby noticed that many companies that started from scratch in the late '70s and '80s, such as the ones Inc. magazine was created to cover, were maturing along with their owners.

By the time the owners of these companies, now worth $2 million, $5 million, or $10 million, were ready to retire, many were not prepared to manage their company's transition, Winsby said.

A traditional business valuation can cost $15,000, but Axiom Valuations performs the service as an independent consultant for about $1,500 to $7,500, Feldman says. He believes Axiom's method of business valuation is faster and provides more information.

"Business owners will understand what's driving the valuation of their business," said Feldman, who has extensively studied and written about evaluating privately-held businesses.

Lou Petrovic, executive director of UMass Lowell's incubator program, knew as a former business owner the need for such a service. With a gesture, he described the process of trying to establish the worth of his startup business from lawyers and brokers.

"It consisted of this," he said, pinching his fingers around an invisible nugget in the air, then opening his empty palm. "There was no real basis."

Winsby was confident that there was a market for such services, but six months after the company was created, its coffers were dry.

"We built a better mousetrap, but no one was beating a path to our door," he said.

Then Sept. 11, 2001 changed the business world, "and no one really talked about business," Winsby said.

He continued to try to market their services, and by March 2002, he began to find an audience, but not of business owners. Axiom's services are designed for small business owners, but must be marketed to the people who advise them: CPAs, financial advisers, insurance agents, and tax and divorce lawyers.

Winsby expects to grow the company well into the millions. He chose Wakefield as a place to roost because it was about halfway between Winsby's home (in Concord) and Feldman's home in (Ipswich), and near Feldman's job at Bentley (Waltham).

Many of the company's employees live on the North Shore. But their UMass Lowell ties remain.

"They believed in our concept from the beginning," Winsby said.

"Unless you've started a business, you don't understand how important that is," Feldman added. "We basically came in here with a piece of paper, an idea and a pencil."