At 32, Jamie Grooms was passionate about his product — spinal fusions machined precisely from the bones of human transplant donors — but no one took him seriously.
“I had a big kid’s dream, and everyone told me ‘go away,’” he said.
Grooms’ biggest stumbling block was the University of Florida administration. He was then director of UF’s Tissue Bank, yet most administrators would hear nothing of his vision of creating a nationwide business based on human bone transplants.
Things have changed in the 18 years since.
He’s now an administrator on the state payroll, working hand-in-glove with UF administrators as well as others representing state universities and state-funded research labs from across Florida.
His job? Making the process for today’s entrepreneurs easier than it was for him. Grooms is now the CEO of the Florida Institute for the Commercialization of Public Health Research, which helps bring discoveries to market at state universities and research labs.
Grooms administers a low-interest loan program to provide start-ups with up to $500,000 each, which must be matched with private funding.
Grooms and his partner, Richard Allen, made tens of millions of dollars for UF — as well as a tidy sum for themselves — from their first company, which grew out of Grooms’ work at the tissue bank.
That company, now known as RTI Biologics, is now a global leader in implants from donor tissue. It employs 1,100 people globally, and more than half of them are located at the company’s headquarters in Alachua’s Progress Corporate Park.
Grooms left RTI and started AxoGen, which produces nerve graphs and is also headquartered in Progress Corporate Park.
Business in the Heart of Florida interviewed Grooms about changes that helped developed the area’s robust biotech environment and the support available for startups.
Q: What’s changed in the start-up environment here since your early days with the tissue bank?
A: When our team started in 1995, we were alone. We didn’t have all the support systems — legal, accounting and so on. Today, if you’re going to start up a biotech company, there’s a community around you, and you have all the resources you need. You just have to ask and leverage those. You can get your seed-stage capital in Gainesville and in the state of Florida today, at certain levels. When we started, that wasn’t even an option. It wasn’t even a discussion. You can get your legal services done here. You can get your accounting and auditing services done here. You can get a lot of mentoring here. There are a lot of people who have lived biotech, and you can go to them and say, “How do I do A, B and C?”
Q: Who were some of the players in making the change, and what were their dreams?
A: There was a collective dream that was taking place at the university, the city, the county and the chamber level. People saw that several early biotech companies, including RTI and Exactech, were growing. People collectively had a dream: If we can create a culture in the community around this start-up process, we will do well as a community economically. They’ve done a great job. If you’re starting a company today, the community is supportive. Knowing that you have community support versus being all alone helps you through the struggles of the day.
Q: There’s always a town-grown tension. What do you think contributed to overcoming it?
A: Success. You have a company that now employs over 1,100 people worldwide (RTI). Exactech also employs hundreds. That success dissolves issues, and you can see literally hundreds of companies coming up — one just one or two behind them.
Q: Several companies founded locally — including Novamin (restorative toothpaste), Senticom (termite control) or Pasteuria (which controls nematodes on crops) — sold to large corporations, so they didn’t create jobs here. What’s the benefit of keeping the jobs here?
A: The collective community vision aimed to keep jobs here, but it’s not a requirement. Eventually, we can stop the drain of companies leaving here because the money is in Boston or Chicago or somewhere else. In some cases, companies such as Syngenta, DuPont or Dow are going to acquire companies and move them out.
Q: You’re working on an investment model, the Florida Angel Nexus. Let’s talk about it.
A: It is a management service organization. We’re signing up companies that need investments. We’re doing the due diligence on those companies and providing reports. We’re sharing those reports with angel investors around the state of Florida and outside the state. If people want to make an investment in the companies, we’ll actually do the deal docs. We’ll help structure the deal, and then, we’ll monitor the companies for the investors.
Q: What’s the relationship between the network and the Florida Institute for the Commercialization of Public Health Research?
A: We will leverage some of our resources at the Institute to do the due diligence. If the Institute is funding a company, it may be able to get matching funds through the network. The role the network will play is packaging companies. We will do a deep dive into their business strategy, their business plan, their financial model and their execution model. We will help them bring those to VC quality — something that people can see clearly and that is truly executable. And then, (we will) help them build a management team around that, mentor that management team (and) help them find CEOs. The second phase is to present the package to our investment advisory board, which is made up of 26 professional venture capitalists who volunteer their time.
How much funding is available through the institute?
A single company can get a total of $500,000 through the Institute in two different rounds. In the first round, they can get $300,000, but that has to be matched one-to-one by private money. The second round is up to $200,000, and that has to be matched two-to-one. We are not putting our money in without someone from the outside doing due diligence.
Q: Realistically, there are only so many RTIs or Exactechs, so not everybody is going to succeed. Can you discuss that?
A: Actually, failure is part of the game. The word failure is used in this space as the project stops. Just because your project stopped doesn’t mean you failed. It means that something happened that you’re just not going to overcome. You can’t predict all the things that you have to overcome in a business plan day one.
You’re going to run into some unknowns, but if you overcome most of them — you raise money, you bring a team together around a concept — all of those are successes. So, take all of those successes and continue to modify your approach on future projects because that skill set that you’re building will lead you to commercial success.
I’ve been in those moments when we’re having a conversation Monday that we’re closing the company Friday. We had this conversation with our team at AxoGen, which numbered over 30 at the time.
We didn’t feel like failures. We knew the company and the project was about to fail, but we felt very successful. Thursday afternoon, I got a turnkey, and we salvaged the company. By turnkey, I mean we had an investor who committed to bring in more money, and so we stayed together.The near-failure with AxoGen was due to the unknown issues.
The FDA had an issue that changed the regulatory pathway of the company midstream, which is highly unusual. The economy crashed, and we lost the investment community and we lost our big distributor, all in the same week. That company should not be alive.
Managing through one of those crises in your pathway is doable. All three at the same time is what the management team achieved. That’s pretty impressive.
All of those hurdles are being overcome. We changed directions with distribution; we’re doing it direct and using independent distributors. The FDA came around and agreed that this is absolutely unique in marketplace. They don’t want it off the market; they just want to regulate it differently.
The economy is coming back. We went a different route. We went to the public for financing, and it worked.
The product is being used, and it’s one of the best products that I’ve ever been part of. We have people who can literally walk again because of the product, smile again because of the product (and) move their hand again.
Q: What motivated you to join the Institute?
A: Part of what is in the blood of people who do start-ups is that we’re not money-driven; we’re mission-driven.
The state of Florida is on the verge of this change that I want to be part of. Part of it requires the skill set that I’ve accumulated over the years. I want to deploy it now for my political cause.
It’s fun. I meet some of the best people in Florida. This is a great learning experience for me. It’s honed my skills. Understanding start-ups the way I’ve done it over the years and then practicing it day in and day out with 100 different companies at a time has been good for me.
Q: What does it mean to you to see companies that have no prior connection here, such as Coqui and Mindtree, say that Alachua County is a good place to do business?
A: I smile on behalf of the RTI team. There’s an RTI legacy, along with the other companies, that means we get to say that “We seeded this thing.” That’s pretty cool.
Q: What does the current environment mean for the future?
A: I see RTI as a success, but I see it as a single or a double. There are technologies that I’m seeing that are home runs. There are some technologies that I’m seeing that could employ 20,000 to 30,000 people.
I’ll share one concept. One company coming out of UF has an alloy — it has some hurdles — that instead of putting a titanium screw or plate into a body, you’ll put an alloy that actually facilitates bone regrowth.
Instead of having to pull the screw out, you’ll actually leave it in, and it will turn into bone.
If you look at that marketplace, you’re going to have the opportunity to build a company that will be Stryker or a Medtronic. That is different than RTI.
This in the early stage; it just got put in the oven. You’ve got to let it bake. It is incorporated. It has a good leader. They’re sitting quietly right now, doing their due diligence. Is this a real gig or not?
There are a few of those that exist. I’m excited about them. If they materialize, that changes this community to a whole complete level to where RTI is viewed the way it should be. It’s a single. It’s a double. It’s not a home run.
Q: What does it mean to you to see UF graduates being able to stay in town?
A: I like that. I talk to a lot of students, and a lot of them want to live here. They can do that with this start-up community. A lot of them don’t want to go to big corporations right away. They like this start-up community, and they want to put their fingerprint on a big company that has a big future.
These kids don’t want just a job; they want to be part of a mission, and that’s neat. You can do that in a start-up community, and that’s what we can offer here in Alachua County.