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New frontier
Venture studio Novy is blazing trails and building communities
The Gazette offers audio versions of articles using Instaread. Some words may be mispronounced.
This story first appeared in Celebrating Entrepreneurship, a new special section that highlights the entrepreneurial ecosystem in the Corridor.
In November 2023, David Tominsky, Krista Martin and Eric Engelmann sat in their office in Cedar Rapids’ New Bohemia District on the brink of launching Novy venture studio, the first-of-its-kind in the state of Iowa.
One year later, the Novy team has doubled to six, and the company with deep roots in the Cedar Rapids-area startup ecosystem has the infrastructure and know-how in place to co-found its first entrepreneurial endeavor, with a goal of building one or two businesses a year, that — according to Martin — “create new jobs and solve real problems.”
“It's been great meeting and working with founders who are trying to solve really big, important problems,” Martin said. “We are building a team that can help entrepreneurs level up their ideas into successful businesses.”
The history of Novy (the Czech word for “new”) goes back a decade prior to that November 2023 meeting. In 2014, Engelmann launched the Iowa Startup Accelerator, one of the first accelerators in Iowa. To support the accelerator, Engelmann built up the ISA Venture Fund, a $22 million fund dedicated solely to Iowa-based tech startups.
Tominsky joined the Iowa Startup Accelerator as a project manager early on and was heavily involved with community-building through his later work with The New Bohemian Innovation Collaborative, or NewBoCo.
“Over that 10-year span of time, we learned a lot,” Tominsky said. “We invested in a lot of companies, interacted with lots of entrepreneurs, really started to get exposed to the types of industries that can thrive in a place like this.”
Dave Tominsky (Submitted photo)
Eric Engelmann (Submitted photo)
Krista Martin (Submitted photo)
Members of Novy venture studio include, from left: David Tominsky, co-founder; Eric Engelmann, co-founder; Sarah Wallace, process leader; Jess Greiner, vice president of marketing, and Krista Martin, co-founder. (Submitted photo)
Tominsky said he and Engelmann concluded that a venture studio model would allow them to invest capital into early-stage startups as well as to operate an educational mentorship program that would accelerate their growth.
When Martin returned to Iowa after a stint in Indianapolis, where she was the second employee at the management software company Boardable, the Novy team was set.
“The three of us, looking at our skill sets, seemed to have the pieces needed to actually start and successfully run a venture studio,” Tominsky said.
While a venture capital firm provides investment, and accelerators or incubators offer mentoring or educational support, Tominsky said a venture studio is a marriage of both, with Novy investing $1 million in capital to put a startup into creation.
“At Novy, we co-found companies,” Tominsky said. “There is a real difference between being an investor or a service provider and being a co-founder. You and I are actually in this business together.”
Tominsky said Novy focuses on health care, which according to McKinsey, will be an $819 billion industry by 2027, simply because there is no shortage of problems to solve. The co-founders of Novy also have extensive experience in the field, with Engelmann having founded a health care tech software company.
The company’s location in the medical quarter of Cedar Rapids also lends itself to the health care field, Tominsky said, with Mercy Medical Center, Physicians’ Clinic of Iowa (PCI), St. Luke’s Hospital and Coe College all nearby. He said they also developed a relationship with the University of Iowa Office of Innovation.
Chris Parker, associate director of UI Ventures, said in the last five years his department has seen an emergence of innovation in the sectors of vaccines, diagnostic materials and therapeutics. He also said, “The digital health and AI space is booming right now.”
Parker said one benefit of launching a health care tech startup in Iowa is access to talent from the state universities as well as talent from Iowa’s robust manufacturing space.
On the flip side, Parker said the challenge for startups in the state is access to investment capital, particularly finding an investment partner willing to commit long-term.
“Folks like Novy, they’re coming to these groups with a team of people and a check, and it’s probably going to be a substantial check to move that forward, so I think those types of models can help especially in that digital health software space,” Parker said. “It really suits itself to be successful.”
Tominsky said Novy has expectations to start the first cycle of ideation and validation in 2025. While it will be several years before the first Novy company exits, Tominsky said the plan is to always have another company in queue so they have an annualized exit.
“We’re coming up on our first year, and we’ve learned so much, but it feels like we’re just getting started,” Tominsky said. “I’m really looking forward to seeing what the next several years bring to the community, because we’re all connected. We all stand to benefit from this.”
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