Originate Ventures: An Entrepreneurial Journey Comes Full Circle
Many entrepreneurs who engineer a $255 million payday for their investors would take that as a sign to relax. Not Mike Gausling, co-founder and former CEO of OraSure Technologies. After founding and growing OraSure into the world leader in rapid oral fluid HIV diagnostic tests, he has come full circle to where it all started for him in 1987-in the business incubator operated by Ben Franklin Technology Partners of Northeastern PA on Lehigh University’s campus in Bethlehem. With a personal investment of $2 million—and a firm appreciation for his humble start at the Ben Franklin Business Incubator—Gausling co-founded Originate Ventures, a venture capital firm.
Gausling raised more than $30 million to start the fund. The Ben Franklin Technology Partners is not only a key investor in the fund, but is also a limited partner. “We expect to make investments in early stage, growth-oriented companies in eastern Pennsylvania,” Gausling says. “It’s important to me to try and make a difference by helping to create jobs and substantially impact economic development in the community I live in.” OraSure currently employs more than 200 in Bethlehem.
A Temporary Home
Until Originate completes its renovation of a former Bethlehem Steel firehouse on the south side of Bethlehem, Mike and his team are temporarily occupying a suite in Ben Franklin TechVentures-the new state-of-the-art incubator on the mountaintop campus of Lehigh University that replaced the smaller Ben Franklin Business Incubator.
“I have effectively been co-branded with the Ben Franklin incubator program since 1987. That’s why it made so much sense to jump to the other side and mentor and invest in other entrepreneurs in the region,” says Gausling. “Ben Franklin has an amazing 25-year legacy that will surely continue for the next 25 years, and I’m very proud to continue to be a small part of that legacy in any way I can.”
The Rise of OraSure
OraSure’s success is based on a concept that seems simple enough-using oral fluid rather than blood or urine to simplify and speed testing for HIV, other infectious diseases, drugs of abuse and alcohol. The implications, however, have been monumental for the company and for millions of people around the globe. It’s no wonder company revenues soared from $77,000 in 1989 to more than $69 million in 2005.
From its modest beginnings in the incubator, OraSure now offers a growing number of diagnostic capabilities-such as tests for infectious diseases, drugs of abuse and alcohol abuse-to a variety of markets worldwide. “Without Ben Franklin, we wouldn’t be here today,” Gausling notes. Gausling also proudly talks about the company’s commitment to locate its growing business on the south side of Bethlehem, on the brownfields of a former Bethlehem Steel site.
Giving Something Back
Gausling looks to lessons learned to help the next-generation entrepreneurs make their mark on the technology economy of Pennsylvania. “We were absolutely clueless how hard it would be for a bunch of 29-year-old guys to secure venture capital funding,” he says. “As I look back 20 years later, in my new role on the other side of the table, I realize I wouldn’t have funded us either. We had irrationally high revenue predictions and a complete lack of management experience operating as a startup business.”
Gausling is not content just sitting at his lake house in Tennessee, where he escapes each summer with his family. “We have an angel investor orientation,” he notes. “We want to provide active assistance. We are entrepreneurs helping entrepreneurs. If people don’t view our added value as much as our money, it’s probably not a good fit.”
Leading by Example
As he did at OraSure, Gausling leads by example. He and Originate co-founder Eric Arnson provided $4 million of their own money to get Originate started. “To me, it’s not about income-it’s about building companies and profiting from the equity returns from the investment portfolio,” he says. “If we do our job right, the payday will hopefully come for our investors sometime in the next 10 years, just like it did for our SolarCare investors.” And for its SolarCare investors, Gausling proudly states that its original investors made a 70x return on their investment over a 10-year period. The bar is probably set absurdly high, but Gausling would have it no other way.
Gausling also provided Ben Franklin with a $100,000 leadership gift to help fund the new TechVentures facility. His family funded the bronze statue of Ben Franklin sitting at the entrance of the new TechVentures facility. He says that he thoroughly enjoys sitting on the bench and talking to prospective companies about their innovative product ideas. Who knows, the next OraSure may be conceived on that bench, with the spirit of Ben Franklin inspiring entrepreneurs for years to come.
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