BusinessWest

Entrepreneurs Gain Insight at Valley Venture Mentors Program

The idea for Marcie Muehlke’s business was born when she went shopping for her wedding gown. “I wanted something that was beautiful, but also had a beautiful story behind it; I didn’t want a dress made in China in a sweatshop or by children,” said the Amherst resident.
Her search proved futile, but after talking with friends, the 29-year-old realized they shared her values — and so did many others.
“So I founded Joya Bride with the idea of having women’s cooperatives in Southeast Asia produce wedding dresses that would make women look beautiful and feel joyful on their wedding day,” Muehlke said, noting that her goal since she was a college undergraduate has been to figure out a sustainable way to help women in the developing world.
Muehlke recently returned from three weeks in Southeast Asia, where she met with silk makers and independent craftswomen. “It was an amazing trip,” she said.
It was also a journey she might never have undertaken without the help, support, and guidance she has received from Valley Venture Mentors, or VVM. The Springfield-based group provides critical support to entrepreneurs by linking them to business professionals who act as mentors during structured monthly pitch-and-planning sessions as well as in private meetings between sessions.
Although Muehlke had conducted academic research before making the decision to launch her company, the guidance she’s received from the group has been invaluable.
“Each month they posed questions about things like price points, sourcing, and supply-chain marketing, and through long conversations with my mentors, I was able to nail down answers and move forward,” she said. “They provided me with lots of valuable advice as well as help in making overseas contacts.
“I haven’t signed any contracts yet, but I have sample dresses and a few orders, and when I graduate next month from the Isenberg School of Management at UMass Amherst, I’ll devote myself to this full-time,” Muehlke continued. “It’s a decision the group really helped me with. We talked through the pros and cons, and they gave me the moral support to take the risk. They’ve helped me make critical decisions and move forward to make this business become a reality. It would have been a lot more difficult and slower without them.”
Muehlke’s comments are typical of those who have received — and continue to receive — support from the program. And for this issue, BusinessWest talked with several individuals on both sides of the mentoring spectrum about the VVM and its potential to spur business growth, and thus employment, in this region.

Valuable Exchange
Muehlke was one of more than 60 people who met in the Springfield law offices of Bulkley, Richardson and Gelinas during the VVM’s monthly meeting in April, where the degree of energy, enthusiasm, and intense interest in new business concepts was certainly palpable.
Four groups who hope to be accepted into the program delivered timed presentations. Their auditions had to include an executive summary, a video, and a pitch focused on how and why their company could work. When they finished, three teams already accepted into the VVM program reported back to the group on progress they have made since the last meeting.
Scott Foster, a partner and business law attorney with Bulkley, Richardson and Gelinas who started VVM with Paul Silva, managing partner of Angel Catalyst, said two main premises must be incorporated into each presentation. The first is called the ‘pain,’ which translates into the need or problem the entrepreneurs will fill or solve, as well as “why the world needs it.”
For example, a company dubbed Mission Control presented an idea for a software product that would be affordable and easy for nonprofits to use and noted that the market lacks software that meets the needs of such organizations.
After explaining why their product or service is valuable and viable, the entrepreneurs finish their presentations with the second critical component of the program, termed the ‘ask,’ which is a problem they must solve to move their venture forward — and a matter they want and need help solving.
Foster said entrance into the program is determined by the degree of maturity of an idea, and what the presenter has already accomplished. “We’ve had people present ideas that were not developed enough for us to be helpful,” he said.
Those who are accepted must be willing to accept what Foster refers to as “lovingly critical advice.”
“But this is not a shark tank — even if a mentor thinks an idea is the worst thing he or she has ever heard of, their job is to think about the challenges the business will face,” he explained, adding that groups who are not accepted can return and present their ideas again after they have done more work on them.
After the presentations, mentors meet with the presenters in two short break-out sessions where they pose questions aimed at helping the fledging entrepreneurs hone their ideas, identify exactly who their product or service will appeal to, where they might get financial backing, and the best way to market their idea. After those sessions, the mentors meet with teams already accepted into the program.
Foster said mentors refrain from giving advice, but may introduce solutions they have found helpful in solving similar problems. And between meetings, mentors, as well as the facilitator assigned to each group, often reach out to teams with help that can include introductions to people outside of VVM.
“We had one team that was creating a commercial coating to reduce the drag on ships,” said Foster. “One of our mentors knew someone at the Navy laboratories and was able to help the group get their product tested by the Navy. It’s a lot of work because the mentors and board members are all volunteers, but although it takes an enormous effort, it is very rewarding.”
Gourmet food and beverages are served to create a convivial atmosphere, and when the meetings finish, people often go to the sports bar in Tower Square to continue talking. “We’re hearing about innovative concepts and ideas that can change the world,” Foster said.
As word about VVM spreads, the number of people wanting to present ideas has mushroomed. “The majority of people we accept are still in early stages of establishing their company, and many are operating out of their homes, which is the stage where the least amount of assistance is available,” Foster told Business West.
The original concept called for a six-month membership for entrepreneurs accepted into the program. But that model has changed. “Some only need four months, while others come to a few meetings, then take time off to apply the advice they received before they return,” said Foster, offering the example of a person who came to the group with a viable concept, but needed time to bring it to fruition and figure out what the appropriate market for the product was before he was prepared to return. “But this is a lifeline for people. It’s the difference between sitting at home and thinking about a good idea and getting out there and getting it done.”
Nathaniel Davis was accepted into VVM last June. His company, Play/Give/Win, offers nonprofits and other people who want to raise money an innovative way to do so. Instead of asking for donations, charities can invite people to pay to play online games with prizes, or go on ‘missions’ that range from ‘liking’ a Facebook page or Twitter account, which translates into a cash value due to business sponsors, to checking in at a location where they can redeem a coupon.
“VVM has been absolutely pivotal in helping us create a working product, get customers, and generate our first revenue,” said Davis.
Before he found out about VVM last spring, Davis said he spent a large amount of money trying to make connections in Boston, and believed he would eventually have to relocate to a major hub such as New York or Silicon Valley, where there is strong support for technology entrepreneurs, in order to be successful.
But all that has changed as a result of his involvement with VVM. Davis had outsourced his Web development to India, but the relationships he made through his mentors allowed him to bring it back to Massachusetts at a lower cost, convey the concept in simpler terms, and define his product so the average person can understand it.
“They also helped me discover whether I was actually onto something,” he said. “I believed I had a viable idea, but they helped confirm it and provided valuable feedback that helped me redefine my business model. It’s a good place to come and pitch an idea; you will be among professionals in the area who have already succeeded and can help you avoid pitfalls and mistakes they made along the way.”

Changing Direction
“Entrepreneurship, whether for profit or nonprofit, is what changes an economy to make it more responsive to the region,” said mentor Rick Feldman, who has been involved with fledging firms for 30 years. “My world is the world of enterprise development; I’ve started and sold two companies and, years ago, started the Western Mass. Software Assoc. to do this type of work.”
Feldman enjoys his involvement with VVM, and says part of the group’s goal is to help people figure out the right path to take and think seriously about whether they are prepared to own their own business.
“In some cases, that means rethinking their plans; they may actually want a job or career, and you find that out through lovingly critical conversation,” he said, using a phrase other mentors employed on a frequent basis.
He’s worked with two people in VVM who decided that going into business was something they were not prepared to do. “They found their niche in another way, through a job,” Feldman explained.
Mentor Mike Ippolito had the same experience. He was mentor to a group he met with four or five times. “They couldn’t seem to get their business model down, and eventually they all found good jobs,” he explained. “When you are in a startup, you have to look around and ask if the path you are on is the right one. We encourage people to look at all of their options and hopefully come up with a decision.”
However, those who decide to move forward get help from a variety of professionals, who essentially urge them to think globally. “We’re not looking for companies that want to stay small, but for those who want to swing for the fences, hit a home run, and become as big as Facebook,” Foster said. “It’s a little crazy, but we want them to think big, become very successful, and employ hundreds of people.”
Cloud2Market founder Robert La Ferla said VMM has been very helpful to him and his partner, Chitra Dwarka. “They showed us gaps we needed to address as well as areas in which we needed to communicate more effectively. And our mentor gave us ideas about different markets to target,” La Ferla said.
Their business is aimed at redefining the call experience for consumers and businesses via a visual, branded, interactive, and easy-to-use mobile app and cloud service designed as a single integrated solution for customers that will increase satisfaction and reduce costs.
Mentor Daniel Lieberman says VVM also benefits those who volunteer. “It gives the established business community an opportunity to meet people and get new ideas for growth,” he said, adding that he was a mentor to Davis’s company for three months and has been part of the program for nine months. “It is very fulfilling, and I’ve learned a lot. I’m in Internet marketing, so it is good for me to be aware of what the business trends are.”
Mentor Jim Mumm looks forward to the monthly meetings. “It’s exciting to be around people with great ideas who are working long hours to make them happen; the caliber of people who come here and help is incredible,” he said. “This keeps me in an entrepreneurial mindset as I am around other like-minded people, whether they are wildly successful or just getting started. I get more than I give, and it makes you rethink what you are doing in your company and why.”

Positive Gains
Muehlke said the monthly presentations at VVM helped her to polish her public-speaking skills. “You have to explain your concept, present any updates, and defend your decisions; public speaking and pitching a business is not easy, and this has been a great way to practice,” she said. “This is a community of support, and their energy and enthusiasm are as important as their actual advice. I’m so glad I have been able to be part of it so I can provide brides with dresses that make them look beautiful and feel more joyful, knowing they are helping women around the world.”
It’s a goal right in line with the purpose of VVM. “These people are building ventures and satisfying significant niches,” Silva said. “They may not all be high-tech, but they are all high-scale.”

Suki Kramer Continues to Expand Her ‘Cosmeceuticals’ Venture

Although she has quietly grown a solo operation, working out of her kitchen, into an internationally recognized name in all-natural skin-care products, Suki Kramer says her first passion is writing.
“I have a blog, and I write for seven other blogs,” said Kramer, whose line of skin-care products, known simply as Suki, celebrates 10 years in business this year. “Writing is probably my first love, even before doing this. It’s good for me personally, but it’s also good because education is a big part of what I do, and it helps the business.”
In some ways, Kramer said, she has morphed into a sort of lifestyle guru through her online presence, not only raising the profile of her line of what she calls ‘cosmeceutical’ products, but helping people understand more about why making all-natural choices is important. For instance, her sukiscoop.com blog is dedicated to sustainable living and the numerous ways in which people can live ‘greener’ lives.
“We’re learning a lot about being online and having a retail market online,” she told BusinessWest, adding that her growing, Northampton-based company continues to diversify in other ways, selling to natural stores, whole-foods outlets, spas, department stores — anywhere she can get a foothold. “We have products we sell only to spas, and we have boutique clients as well. And we’re growing a lot overseas; we just keep diversifying and putting a lot of effort into networking.”
And that includes writing — prolifically — about a product line and concept she passionately believes in.
“Like with anything else, I’m learning what works and what doesn’t. Its just trial and error,” she said. “The blog thing definitely came from my own blog; people were reading what I wrote there and asking me to write for them. So I definitely enjoy doing that now.”

Skin of Their Teeth
At their essence, Kramer said, Suki products are skin-care solutions, not just aesthetic products.
“We treat the skin and skin-care issues,” she told BusinessWest. “Whether it’s concealer or moisturizer or lip color, skin care has got to be the focus.” That term ‘cosmeceutical’ reflects her dual goals of skin health and beauty, even in the makeup line. “Often, people put makeup on a blemish, and it clogs the pores. My products actually treat the blemish. It’s based on our cosmeceutical creams, and we just add 100% natural pigments.”
Kramer first began experimenting with skin-care formulas in the late 1990s, although she had no chemistry or business background. But she loved the research process, and for two years she experimented with different combinations of entirely natural ingredients, from plants, herbs, and essential oils to more complicated elements like amino acids, brewer’s yeast, vitamin C, and enzymes. Everything she works with is food-grade, as opposed to cosmetic-grade.
Once she had a formula down for her first product, a lemongrass cleanser, she packaged it in small glass containers with handwritten, hand-glued labels, and started marketing it to the public. But this was no PR machine; she essentially hit the streets, putting her wares in front of whomever would give her an audience. She and her husband lived off a credit card for a time to pay the bills and used a home-equity loan to finance some of the business. It was a risk, but one that began to pay off after a couple of years.
By that time, the product line had grown to include cleansers, hand and body creams, toners, shampoos and conditioners, and lip balms, among other offerings. The company was incorporated, and Kramer got her products onto shelves at a number of high-visibility stores and spas, including the Whole Foods chain and Chicago’s Marshall Fields (now Macy’s). She and her husband were finally seeing their risk pay off, and the company began to grow in earnest.
Today, Suki is an international brand, one even used by a number of celebrities.
Throughout it all, the mainstay has been Kramer’s insistence on natural ingredients — but, more important, natural products that are as effective as their synthetic counterparts.
“We are 100% natural, and we have clinical studies to back up our claims,” she said — a crucial point of distinction, she said, particularly at a time when companies throw around the word ‘natural’ to the point where it’s lost its meaning. She noted that many so-called ‘natural’ products use natural ingredients coupled with synthetic bases or other chemical ingredients, but hers completely avoid harsh additives that could lead to allergies, dependency, or other skin issues.
At the same time, many products that actually do boast mainly natural ingredients don’t necessarily work the way their makers claim, Kramer said, noting that she relies on rigorous product testing to ensure that her natural products are as effective as anything on the market.
“We perform clinical tests on our products, and we do third-party trials to prove that our products work,” she explained. “That’s a really big deal to us. You don’t find that in the natural world; you find it in the dermatology or spa market, or with department-store brands.
“We’re not just 100% natural; we are a natural brand that rivals Clinique and some of the more hard-hitting anti-aging or anti-acne lines,” she added. “It’s important to us that people know that our products actually do what we claim they do.”

Hometown Success
Some have wondered whether a growing skin-care line with a global reach would be better served by a more metropolitan headquarters, but Kramer scoffs at the idea. After all, a vibrant online presence renders old models of success in this industry largely irrelevant.
“My home is here; I’ve been here 27 years, and I love this place,” she said. “And the people who helped me build this business — I wouldn’t want to leave them. It’s important to me; these people are the core of this business.”
They’re growing in number, too. Just five years into her venture, Kramer had expanded her staff to 11. Now, as the Suki line celebrates its 10-year anniversary, she employs 25 people in Northampton, not to mention 65 sales reps across the U.S. and more internationally.
Still, she doesn’t see this as the ceiling — not even close.
“I think I envisioned something even more than this,” she said. “I want to continue growing beyond where we are now. I want to get into new markets, solidify the markets we have, and continue to help as many people as we can realize that they can have great skin without harming themselves or the environment, to realize they don’t have to use synthetic ingredients. We’re looking to expand as far as we can.”
To do so, she’ll continue to introduce new products, like a concealer later this year as well as an essential multivitamin serum for the face. “You absolutely have to launch new products; that’s part of the game,” she told BusinessWest. “We come out with at least a couple of new products a year. We’re always developing new products.”
As for her first love, Kramer said she will continue to spread the word in print and online, communicating the idea that her products are not “earthy-crunchy, hippy-dippy products, but they’re essential — the textures are as sophisticated as any product people are used to buying anywhere. You don’t have to sacrifice anything to use natural products.”
Clearly, people are reading and listening — and buying. “I love it when people discover my products for the first time and say, ‘wow, my skin is completely different,’” she said. “I love feedback online or in letters. That’s amazing to me.”

Joseph Bednar can be reached at  bednar@businesswest.com

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SBA Loans Can Help ‘Risky’ Borrowers over the Hump

Capital is the lifeblood of most all established businesses and start-ups. And for many, obstaining capital has become more difficult in this soft economy. Small Business Administration (SBA) loans can often be a creative solution to the needs of businesses large and small.

Bob Polito understands how the economy has battered New England businesses.
“With what has happened over the past three years with the recession, so many businesses have seen their revenue line suffer, and they could not adjust their expense overhead quickly enough. Many have suffered some significant losses,” said Polito, head of government lending for Webster Bank. As a result, it has become difficult to borrow money.
“Those businesses that have managed their bottom line properly are still obtaining financing; even though their revenue could be off by 30%, they’re able to show enough cash flow to service those debts,” he added. “Those companies, obviously, will make it through any economic time if they’ve gotten through the last three years, they’re so well-set for anything that happens in the future.”
But what about those that aren’t? And what about entrepreneurs trying to transform an idea into a successful company amid one of the harshest economic climates in memory?
In many cases, the Small Business Administration can help.
The SBA was created to support small businesses and entrepreneurs. Its mission statement notes that it aims “to maintain and strengthen the nation’s economy by enabling the establishment and viability of small businesses, and by assisting in the economic recovery of communities after disasters.”
The SBA doesn’t itself make loans to businesses; rather, it makes it easier for small companies and entrepreneurs to access capital. The SBA partners with banks, credit unions, and other lenders to provide a government-backed guarantee for the loan.
“We’ve been doing this for decades,” Polito said. “We’re an active SBA lender in Connecticut in particular, but we really want to do more in the Springfield market as well as Boston, Rhode Island, and other areas.”
It’s not just financial institutions involved in SBA lending. The Western Mass. Enterprise Fund, for instance, uses them as part of its overall mission of providing financing support to small businesses.
“We’re a community-owned fund,” said Christopher Sikes, executive director of the WMEF. “We provide capital in the form of loans to various small businesses — microloans, through the SBA microloan program — and then we do larger loans, up to $300,000, for larger businesses.”
“Because we are making generally riskier loans — that’s why we’re here, to provide capital in areas where others can’t — we’re at higher risk, and in order to protect our portfolio, we have to set aside a reserve fund called a loan-loss reserve to cover the cost of any loan that may go bad,” Sikes explained.
“We reserve 15% of our portfolio. That’s a significant cost; if we do $2 million in lending in a year, then it’s a $300,000 loan-loss reserve. The SBA 7(a) program that we just became part of provides up to an 85% guarantee, which means that, not only is our capital protected, we don’t have to put out a loan-loss reserve. It’s a program that allows us to lend more. Historically it’s been restricted to depository institutions like banks. They recently opened that up to community-development institutions; we applied and got it.”
For this issue, BusinessWest takes a look at the different flavors of SBA loans and why the program can be critical to small businesses struggling to obtain financing — or just to get off the ground.

Loan Stars
The 7(a) program Sikes referred to provides financial help for businesses with special requirements. For example, funds are available for loans to businesses that handle exports to foreign countries, businesses that operate in rural areas, and for other very specific purposes.
“This allows us to be more flexible in our financing and work more closely with the lending institutions,” he told BusinessWest. “Our 7(a) program is not a competitive tool, but a collaborative tool we can use with the banks.”
Polito noted that the 7(a) program has a $5 million limit. “That is a recent change, because as far as I can remember, going back 20 years, it was always $2 million. In October 2010, in the Jobs Act, they increased it to $5 million, which is just phenomenal. You can add so many more businesses for this type of lending. You never want to forget the small-business owner who maybe needs $150,000 or $200,000; we made our bread and butter with that. These folks won’t need $5 million, but the opportunity is there to grow into that, which is why this is a wonderful change.”
With the economic climate so volatile right now, Sikes said, “a loan we’ve done before which is on the higher end of risk in today’s market would be too risky a loan unless we had some other support. And when you get into large numbers, the loan-loss reserve really holds us back.
“The 7(a) program helps reduce that cost tremendously,” he continued. “It allows us to have a greater impact in the community, and we’re looking to be more impactful by business sector — for example, agriculture or machine tooling — and by geography as well.”
Meanwhile, the SBA’s Microloan program provides small, short-term loans to small-business concerns. The maximum loan amount is $50,000, but the average microloan is about $13,000. They may be used for working capital, inventory and supplies, furniture and fixtures, and machinery or equipment. Proceeds from a microloan cannot be used to pay existing debts or to purchase real estate.
Microloans benefit “a huge array of retail service businesses, anything from a local corner store to a landscaping business,” Sikes said. “The small-business market historically has been mostly manufacturing. Because we want to have an impact, we want to work with manufacturing companies; they not only create quality jobs but create a lot of spinoff jobs.”
A third SBA initiative, the CDC (certified development company) 504 loan program, is a long-term financing tool designed to encourage economic development within a community. The 504 program accomplishes this by providing small businesses with long-term, fixed-rate financing to acquire major fixed assets for expansion or modernization.
A CDC is a private, nonprofit corporation that is set up to contribute to economic development within its community. CDCs work with the SBA and private sector lenders to provide financing to small businesses, which accomplishes the goal of community economic development. Typically, a CDC/504 project includes:
• a loan secured from a private-sector lender with a senior lien covering up to 50% of the project cost;
• a loan secured from a CDC (backed by a 100% SBA-guaranteed debenture) with a junior lien covering up to 40% of the project cost; and
• a contribution from the borrower of at least 10% of the project cost (as equity).
504 loan funds must be used for fixed asset projects, such as the purchase of land; property improvements; the construction of new facilities or modernizing, renovatingm, or converting existing facilities; or the purchase of long-term machinery and equipment. The program cannot be used for working capital or inventory, consolidating or repaying debt, or refinancing.
“It’s SBA’s economic-development program,” Polito said. “If a customer or business wants to purchase commercial real estate to house their business, the SBA offers this program for as little as 10% down; typically we’d require 20% to 25% down on a real-estate transaction. What the SBA is saying is, we’d like you to take that other 10% to 15%, not take it out of your working capital, but use it to hire somebody, buy a piece of equipment, deploy it as a long-term fixed asset.”

Borrowing Advice
Polito stressed, however, that the SBA is never going to make a bad loan a good loan just because of the guarantee.
“There are banks out there that subscribe to that theory,” he said. “But I say, ‘listen, we do you no favors by lending you money you can’t afford to repay. That doesn’t help you, and it doesn’t help me. I need to make sure we do our due diligence and analysis. If you can’t articulate to me as a business owner how you will repay, I don’t do you any favors by lending to you.’ I think people get that, but I don’t think it gets communicated effectively all the time.”
That means clearly explaining to a lender what the business is and how it generates income and expenses, to the point where the lender understands enough to be an advocate for the borrower.
“We’re so impressed when someone can produce financial documentation. When they can’t lay their hands on their financial documents within 24 or 48 hours, I get a little worried about that,” Polito said. “Articulating the business model is important. I really need to understand what they’re doing. Are they financing payroll? Rent? Financial projections really help out in that regard.”
The most important aspect of SBA loans, he told BusinessWest, may be the fact that they provide the financing that businesses need to keep their organization intact and even growing.
“Laying off people is the easiest thing to do, but not necessarily the best thing to do,” he said, referring to the harsh effects of brain drain on companies that go that route. “Companies that are able to keep good folks and their experience are set for a good future, no matter what market conditions throw at them.”

Joseph Bednar can be reached at bednar@BusinessWest.com

Amherst Engineer Creates Pressure Vest for Children with Autism

The power of a hug can work wonders in relieving anxiety and stress. But many children with autism spectrum disorder are overly sensitive to touch and cannot tolerate the comforting gesture.
However, they do need something to quell their anxiety, which can result from their heightened response to sounds and sights most people don’t even notice.
And thanks to a groundbreaking new medical device, children with sensory processing disorder are being soothed and comforted by a lightweight, therapeutic vest that can be inflated to produce the exact amount of pressure the child needs at a given moment.
It’s called the Vayu Vest, and it has taken mechanical engineer Brian Mullen years of collaboration, research, and trial and error to create. “About 87% of people with autism have sensory processing issues,” said Mullen. “They experience the world and respond to it differently than typical people.”
Tina Champagne agrees. “Children with autism are often oversensitive to touch, sounds, visual stimulation, and even temperature,” said the program director for the Center for Human Development’s Institute for Dynamic Living in Springfield.
The launch of the vest, which is named after a Hindu wind god, took place in May and was initially inspired by Champagne’s work as an occupational therapist at Cooley Dickinson Hospital in Northampton.
Champagne and Mullen have collaborated on the project for seven years, doing research and clinical trials to develop a product that not only helps children with autism, but may have other applications in mental health treatment.
Two years ago, Mullen and his business partner, Chris Leidel, started a business named Therapeutic Solutions to market the vest. The duo and their Amherst-based operation were recently named as finalists in the prestigious Mass Challenge competition in Boston that runs through the end of September. They are hoping to win a portion of the $1 million in cash awards, as well as generate interest in their product.
They have received help and won awards along the way for their work, which they are grateful for, and Mullen says their business is growing, thanks to support from the Western Mass. community. Their hope is to get the cost of the $2,000 device reimbursed by insurance companies. If they succeed, it will be the first medical device for autistic children paid for by insurance.
“This was and is all-consuming,” said Mullen. “It’s an incredibly important thing to do, and we are getting calls and e-mails from people thanking us.”

Research Project
The story of how the vest came to be begins when Mullen was a student at UMass Amherst. At the time, Champagne was working as group program director in Cooley Dickinson Hospital’s acute inpatient behavioral unit and was focused on collaboratively incorporating healing and nurturing interventions into clients’ treatment plans.
“I was working in conjunction with the state Department of Mental Health to find tools to help decrease the need for seclusion and restraints,” she said, explaining that people were sometimes put into mechanical restraints or injected with medication when their behavior spiraled out of control. “It was and continues to be an international initiative, and part of my job was to help staff learn new approaches and interventions that were safe and nurturing.”
One of the tools she incorporated was a weighted blanket, traditionally used to help calm people with autism when they became anxious. “The clients would wrap themselves in them,” she said. “The belief is that the pressure helps to decrease the autonomic nervous-system response of overarousal connected to anxiety.”
Research had been done in the field by Temple Grandin, an author, engineer, seven-time Emmy award winner, and well known woman with autism, who has spoken and written about autism for more than 20 years. Grandin, a professor of animal science at Colorado State Unversity, created a so-called “squeeze machine” for herself as well as for livestock waiting to be slaughtered.
Mullen began his documented collaboration with Champagne when he was in graduate school at UMass Amherst, and was looking for a project for his thesis. They had been introduced by his professor, Sundar Krishnamurty.
Mullen was fascinated by the subject, and soon became immersed in research himself, learning how weighted blankets and vests were being used with people with autism to help them self-soothe and regulate anxiety. “I saw a real need for this,” he said.
Champagne said other students had tried developing inflatable sleeping bags and vests, but the sounds they made as they inflated, and the feel of the fabrics used, upset children with autism.
And although Mullen was completely committed to his research project, he said it was a risky and unconventional topic for someone in the mechanical engineering program.
“I was taking a non-traditional path, the path less traveled,” he explained. “This was something different and new, and it appealed to me. I knew that what I was doing could have a large impact on people’s lives and I figured, ‘why not help when I have the opportunity?’”
Mullen said great progress has been in the field of autism research over the past seven years, “but the population is still drastically underserved. And it became compelling for me to help reduce the use of restraints and seclusion and come up with better solutions for people. After I saw and heard about this and was exposed to it, I felt I had to take action.”

Trial and Error
After earning his graduate degree, Mullen decided to continue to work toward a doctorate. In 2006, a feature story was written in the Boston Globe about the research he and Champagne were conducting. “We received a lot of very positive feedback from people in this country as well as on the international level,” he said.
About that time, he met with a parent who asked him to make a vest for her daughter to help curb her anxiety. Although he had interacted with others via e-mail, “it was very different when I had to sit across from a parent. It was very moving, and I decided to make sure that our research got to the people who could benefit from it.”
At that point, Mullen decided to start his own company with the goal of creating an inflatable vest that was portable, comfortable, and would allow pressure to be adjusted to an individual’s needs. He entered a 2006-07 UMass business-plan competition and lost in the finals.
“But I learned a lot from mentors and the judges who gave me a crash course in how to develop a business,” he said. He re-entered the 2007-08 competition and won the grand prize.
At that time, Leidel and Mullen joined forces. They had been in the same class as undergraduate students, but after graduation, Leidel had worked in an industrial setting before deciding to return to get a master’s degree in business administration.
He helped Mullen write an essay for an entrepreneurial competition, which won them a monetary award. In addition, they also received a grant from the National Collegiate Inventors and Innovators Alliance in Hadley. “It was a very important grant, as it helped us do some consulting work to further the idea and develop it to see if could actually become a business,” Mullen said.
The money also allowed them to work with Dielectrics in Chicopee, which specializes in medical devices. “They helped us to make a prototype and really took an interest in the product,” Mullen said.
After graduating in 2009, he and Leidel were able to raise seed funding for their business from local investors who were following their work.
Feedback has been integral to product development, and the duo continues to collaborate with local organizations. Champagne has found the vest works well for some children who have attention deficit disorder with hyperactivity, children with autism, and those who have suffered trauma.
However, she and Mullen stress that it is not for everyone. “Studies show that 75% of individuals like deep pressure, but 25% don’t,” Champagne said, citing results obtained from the first study they conducted and published, using the modality with adults aged 19 to 64 who had no mental health issues.
But for those who respond to pressure, the vest is groundbreaking, Champagne said. “And Brian and his staff have taken it on themselves to meet the highest possible standards for medical equipment.”
Today, vests have been donated by sponsors for use at the OTA Watertown Clinic, which is one of the largest occupational therapy facilities in the country, and also at River Street School in Windsor, Conn. and at the Center for Human Development, where it is used under Champagne’s direction. Mullen and Leidel are also renting out the vests on a individual basis.
The Vayu Vest was registered as an FDA Class I exempt medical device with the U.S. Food and and Drug Administration last fall, and Mullen and Leidel hope to get it reimbursed by insurance.
“We think we have a significantly better solution than anything that has been tried in the past to apply pressure on a personal level whenever and wherever it is needed. It’s our passion to get it to children who can benefit from it,” Mullen said.
So that they can be held and comforted in a way that is personalized, safe, discreet, and makes a lasting difference in their reaction to the world. n

, entity

Individuals forming new business enterprises, or perhaps those whose business enterprises have matured to the standpoint of pursuing the next level, often approach their accountants and attorneys when considering whether or not to incorporate.
Really, the term ‘incorporate’ is euphemistic for whether an individual, and in some cases multiple business partners, should proceed (or continue to proceed) on their own behalf or, alternatively, form a limited-liability entity pursuant to the laws of the respective jurisdiction. The question of whether to engage in business operations in an individual capacity or to form a limited-liability entity within which to conduct business operations is generally a question answered by a thorough analysis of the respective liabilities and tax implications.

Sole Proprietorship
The simplest manner of doing business is in the form of a sole proprietorship. That said, a sole proprietorship is a bit misleading by name, in that it is not a business entity, but rather the absence of a business entity.
There are no registration or filing requirements, and simply engaging in the business operation commences the sole proprietorship, in the individual’s own name, or on their own behalf. As a result, an individual who engages in a business practice as a sole proprietor personally exposes himself to any liabilities that could arise as a result of such business operations without any legal protection from same.
While an individual doing business as a sole proprietor may register a fictitious name in which to conduct his or her business by filing a DBA certificate in the community in which the business operates, from a legal standpoint, the fact that the business operates pursuant to a fictitious name has no bearing or legal effect relative to liability. By way of example, assume Joe Smith, d/b/a XYS Construction, is named in a lawsuit as a result of an injury occurring to a third party on a job site. A judgment against Joe, personally, could certainly result in a lien against Joe’s personal residence, subject to subsequent sale in order to satisfy such judgment.

General Partnership
Another form of business operation is a general partnership. This consists of essentially two or more individual sole proprietors engaging in business operations in a joint capacity. Often, a general partnership will be governed pursuant to the terms of a partnership agreement; however, such as with a sole proprietorship, there is no formal legal registration requirement.
Additionally, as with a sole proprietorship, the general partnership does not protect the individual partners from personal liability arising out of the business operations. Worse, partners pursuant to a general partnership are not only liable personally for their own acts or omissions relative to the ongoing business venture, but, additionally, each individual is personally liable for the acts of other partners in the partnership.

Corporation
For many reasons, including avoiding the personal liability attributed to sole proprietorships and general partnerships, parties are often counseled to consider forming limited-liability legal entities, which provide a barrier of protection for the business owners.
Among the host of legal entities available for formation, the most commonly used in contemporary business are the corporation and limited-liability company (LLC). That said, the term ‘corporation,’ as generally used, often includes two specific types of corporations ­— subchapter ‘C’ corporations (C corps) and subchapter ‘S’ corporations (S corps), the distinction between which arises pursuant to the respective subchapter of the IRS tax code.
Generally speaking, a corporation is a legal entity that is formed by the filing of articles of organization, is governed by its bylaws, and which is owned by its stockholders. Corporations are managed by their board of directors, with day-to-day operations overseen by their officers. Unlike a sole proprietorship or general partnership, a corporation is an independent legal identity, which is independent from that of its stockholders. Accordingly, a substantial degree of protection is afforded to owners of the corporation relative to liabilities arising as a result of the ongoing business operations of the corporation. The tax treatment of a corporation, including the potential tax effect on individual stockholders, varies in accordance with the nature of the corporation formed, specifically whether it is a C corp or an S corp.

C Corporations
Subchapter C corporations, or C corps, enjoy the benefits of limited liability for stockholders, and are operated pursuant to the traditional corporate formality of being governed by their directors and officers. One significant potential tax disadvantage to C corps, however, is the potential for double taxation of corporate earnings. C corps pay tax on income at the corporate level, and in the event that earnings are distributed to stockholders as dividends, the dividends are often subject to tax at the individual shareholder level upon distribution. This so-called potential for ‘double taxation’ can often be avoided by forward thinking and anticipatory tax planning.

S Corporations
Unlike C corps, subchapter S corporations, or S corps, while providing many of the advantages of the limited liability corporate structure as provided by a C corporation, have the added advantage of not being subject to the potential for double taxation. In fact, income and losses from the business flow through to the individual stockholders and are reported on their personal tax returns. That said, S corps are subject to their own specific limitations and potential disadvantages, most notably the fact that they are limited to a maximum number of stockholders, that stockholders generally must be individuals as opposed to other legal entities, that the S corporation may not have more than one class of stock (e.g. common vs. preferred), and that distributions must be in direct percentage to ownership interest.

LLC
Another commonly utilized business entity is the limited liability company (LLC), which is an entity that shares many characteristics of sole proprietorships and general partnerships, but with the limited liability protection afforded to corporations. The LLC, much like a corporation, is formed by the filing with the secretary of the respective state jurisdiction, with a simple certificate of organization filing, and payment of the respective registration fee. Unlike a corporation, which is owned by its stockholders, LLCs are owned by its member or members, as opposed to directors and officers, and managed by their manager or managers.
LLCs afford a great degree of flexibility in that most states have enacted a limited-liability company act permitting LLCs to be owned by a single member, to have multiple classes of membership (e.g. common vs. preferred), and to determine the capital structure, ownership, and management, all as determined by the business owners. Additionally, unlike S corps, profits and losses may be allocated in a manner that is disproportionate to direct percentages of ownership interests.
Unlike a corporation, which is operated pursuant to its articles and bylaws, LLCs are operated pursuant to a document called an operating agreement, which is a recitation of the respective rights and obligations of each member and manager of the LLC.
Members of an LLC have additional flexibility relative to taxation in that members can be taxed much like a sole proprietor or like a partnership, although distributions to members may be subject to self-employment taxes.
As a result of the flexibility of LLCs and the avoidance of the potential for double taxation, they provide ideal entities for the purposes of taking title to real-estate holdings and investments. For similar reasons, LLCs are additionally valuable tools for estate-planning purposes.

In Summation
As you can see, the determination of whether to form a limited liability entity and, if so, the choice of entity itself, is a fact-dependent analysis. Naturally, consultation with legal and tax professionals is recommended to ensure that you may enjoy the maximum level of liability protection and the most favorable tax consequences for your situation.

Jeffrey Fialky is an associate with the regional law firm Bacon Wilson, P.C, specializing in business, corporate, municipal, and real-estate law. A former assistant district attorney in Hampden County, Fialky joined the firm after a decade of holding senior attorney positions with some of the country’s most prominent telecommunications and cable television companies, where he negotiated large-scale licensing, acquisition, and distribution agreements; (413) 781-0560; baconwilson.com/attorneys/fialky