Southside Bethlehem KIZ, Business Incubator Give Tech Startups a Boost
By Colin McEvoy on August 24, 2015
Live Help Now, a company that creates live customer service chat software for businesses, previously operated in Willow Grove, Pa., but they quickly realized they had to move to the Lehigh Valley. The reason: nearly all the company’s very talented computer programmers were Lehigh University graduates commuting from Bethlehem.
“They were spending two hours in a car every day driving to and from Willow Grove, so we thought it would be more useful to spend those two hours actually working on a product,” said Michael Kansky, chief technology officer for Live Help Now, which is now the fourth-fastest growing private company in Pennsylvania, according to Inc.com. “The move has been the best thing that’s ever happened to us. The Lehigh Valley region has a lot of talent.”
The company has relocated to Pi: Partnership for Innovation, a Bethlehem startup business incubator, which since opening in 2011 has hosted technology companies, social media firms, and software development companies. Located at 520 Evans Street, Pi is in the heart of the Southside Bethlehem Keystone Innovation Zone (KIZ).
KIZs are designated areas within Pennsylvania that foster entrepreneurial growth in coordination with the efforts of institutions of higher education. In Bethlehem’s case, the KIZ provides an incentive for graduating Lehigh and Northampton Community College students with an idea for a startup company to locate in the city, rather than leaving the state for Silicon Valley or another technology hub.
“We’re trying to foster innovation and help those companies grow in close proximity to the campuses,” said Asher Schiavone, Bethlehem economic development coordinator. “The idea is to concentrate all these entrepreneurs and companies so they can collaborate and utilize the resources we have here.”
Pi and the KIZ are managed by the Bethlehem Economic Development Corporation.
Qualified startup companies can qualify for multiple financial and advisory support benefits through the KIZ. Among them is a $15,000 technology transfer grant that helps a company market and commercialize a product or service, as well as student internship grants totaling $2,500 for undergraduate students and $5,000 for graduate students.
Additionally, companies can seek up to $100,000 in tax credits each year. A business can apply for up to 50 percent of the amount of increased revenue it experienced in the past year, then can either use the tax credit or sell it on the marketplace, Schiavone said.
One company that has taken advantage of KIZ benefits is Viddler, which provides interactive online video tools for corporate training and learning. The company boasts thousands of customers in 150 countries, and provides services worldwide for such major companies as Amazon, Disney, BP, and Shell.
Founded in 2006 by Lehigh graduates Rob Sandie and Donna DeMarco, Viddler moved into Pi in 2011, and since then have benefitted from KIZ technology transfer grants, tax credits, and grants for nine college interns, three of whom became permanent hires.
Viddler president Tom Stine said the company is a great example of the coordination between the business community and higher education under the KIZ. It was founded by Lehigh graduates who chose to stay in Bethlehem, and the company has used interns from Lehigh, Lafayette College, DeSales University, and Moravian College, among other schools.
“Between the Pi center, the KIZ, and the support for these training internships, these are major financial and business development opportunities that we’ve been able to leverage,” Stine said. “It works. It works on all levels. It’s a beautiful life cycle and feeding chain for entrepreneurs.”
Hip, urban environment
Located on the second floor of a 1911 silk blouse factory, Pi includes 8,000 square-feet of space, including shared facilities and private office suites ranging from 114 to 1,896 square-feet. With wood floors, brick walls, and open ceilings, the building boasts an industrial feel that helps foster creativity for its inhabitants. Nine companies are currently located there.
Stine said Pi stacks up favorably to similar business incubators he has operated within at such major cities as Boston, Seattle and Pittsburgh.
“In my opinion, an incubator isn’t meant to be sequestered; they’re supposed to be part of a hip and urban community like this once,” he said. “Employees can walk outside and refresh. Within blocks of here we have a dozen restaurants and bars, SteelStacks, and Musikfest. It’s just a really cool environment for our people to hang out and be a part of the community.”
To qualify for KIZ incentives, companies must be less than eight years old, headquartered within the KIZ boundaries in Southside Bethlehem, and work within one of these targeted industries: information technology and financial services, advanced materials and nanotechnology, opto- and micro-electronics, life sciences, or energy.
The Southside Bethlehem KIZ also includes Ben Franklin TechVentures, a high-tech workspace and community for early-stage companies; Hatch House, a live-work community for young or early stage entrepreneurs; and Victory Firehouse, an entrepreneurial center for Originate Ventures, a venture capital investment firm.
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