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March 2008
The Road Less Funded
Jayesh Doshi steers clear of outside investors as he guides eSpin Technologies toward the commercial starting line
By Alexei Smirnov
For years, whispers circulated around the Chattanooga business community: When will Jayesh Doshi
finally raise some outside money for his business? Which investor will he submit to—Southern
Appalachian Fund or Delta Capital? But the armchair venture capitalists would have to wait. For
nearly a decade, Doshi resisted opening up any portion of his company to outside management; he
never even attended the Tennessee Venture Forum, which was considered the best gathering place in
the state for those looking for—and those looking to deploy—capital. Instead, Doshi
chose to be shrewd and scrappy, bootstrapping his eSpin Technologies to the tune of $8
million—a strategy that makes 2008 the year of reckoning, and raises the more important
question: Will the first year of sales, projected for the second quarter of this year, bring eSpin
and Doshi their long-awaited emotional and financial rewards?
At age 25, Doshi came from India to attend the University of Akron, which he calls "the Mecca for
polymer science"—where he eventually received his Ph.D. Then came an engineering job at
DuPont, but not for long. In 1999, Doshi established eSpin Technologies with the idea of building
the first industrial application of nanotechnology, the science of extremely small things that was
born 25 years prior.
From the Chattanooga Chamber's business incubator, Doshi rolled out a machine that spins nanofibers,
or polymeric fibers that are 1,000 times smaller than human hair (20 to 200 nanometers in
diameter).
These filters will come in handy at hospital's clean rooms, schools, athletic gyms,
subways—any public place replete with pollutants in need of filtering to prevent the spread of
unwanted bacteria. A bonus: Doshi and team claim that their filters are more energy-efficient and
last longer than products now offered by competitors. Donaldson Filtration Solutions of Minneapolis,
for instance, has already begun selling nanofiber filters, so it remains to be seen how eSpin's
timing and marketing efforts work against competition. "We were the first company to get started
into this [niche] with research and emerging technology development. Donaldson is targeting
different markets," Doshi says.
One reason why it took eSpin so long to roll out a commercially-ready product is Doshi's distrust of
lawyers and glad-handing, go-getter business types. People who know him well say it takes a genuine
interest in his science to win his trust. One of Doshi's old DuPont colleagues, more of a scientist
than a lawyer, handles his voluminous patent work. (Doshi's name appears on seven patents, and more
are on the way.) Doshi's Brahmin-like ability to ignore the temptation of the quick money fix is
also the reason why he shunned potential outside investors, instead mastering the SBIR grant circuit
and relying heavily, at least during the formative years of his company, on no-strings-attached
government contracts. A recently approved follow-on investment by the U.S. Department of Defense
speaks to Doshi's credit: eSpin is one of 12 finalists to receive repeat funding from the DoD
through a program for promising startups that initially funded 43 different ideas. "We must be doing
something here that is of value to the nation," says the 47-year-old
scientist-entrepreneur-philosopher. A couple of years ago, when Doshi was far enough into his
research for others to take notice, he received relocation overtures from Arkansas, Georgia and
Texas. But local officials knew better than to let him go. Now Doshi suggests that Tennessee
government would do well to try his filters: "People have severe allergies in Tennessee. We believe
we have the solution."
Instead of heading south, eSpin became the first tenant in Chattanooga's Enterprise South Industrial
Park—a long-term, 46,000-square-foot lease that Doshi squeezed out of Hamilton County four
years ago the bargain rate of $1 per year. He also gets some cash-flow on the side by building
alliances with other scientists and letting them use his state-of-the art microscopes, all the while
guarding his know-how, of course.
But now that his filters are ready to hit the market, Doshi the businessman may be winning over
Doshi the Brahmin-scientist. With a queue of respectable, but as yet unnamed Fortune 500 clients
ready to purchase his products, Doshi has established a spin-off company dubbed Notus Laboratories
(after the Greek god of the south wind) to help market eSpin's present and future innovations. An
alliance with Chattanooga physician Raymond DeBarge, Notus is seen by the local business community
as a logical step toward building a vertically integrated conglomerate that will keep Doshi in
control of his marketing efforts. The duo is hiring professionals with experience in marketing
medical products and knowledge of the inner workings of the U.S. Food and Drug Administration.
Following the presentation of Notus to medical industry professionals in late 2007, Doshi remarked
that several biotech companies and investors from Atlanta and Silicon Valley are interested in his
work. What he was really saying, it seems, is that Doshi is ready for them.
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