Hard Work, Passion Propel ‘Underdog’ Trio to Venture Victory

May 10, 2013 | UNIVERSITY COMMUNICATIONS

A trio of UTEP students at different points in their academic journeys decided six months ago to create a business, where a new technology would recycle water in an affordable, environmentally-friendly way. They have refined their business plan and earned praise for their poise and passion in several competitive presentations.

They also have won a lot of money.

Diego Capeletti, Eva Deemer and Alex Pastor, the founders of American Water Recycling, recently won the UT Horizon Fund Student Investment Competition in Austin, which netted them $100,000. Earlier, they won the Paso del Norte Venture Competition and now have collected approximately $122,000 since last March for their incorporated business.

The prize money will be invested in a pilot program to test the process and validate the technology on a commercial level. The first test will be at a Las Cruces, N.M., business. A Killeen, Texas, company that hopes to produce 2 million gallons of drinking water per day wants to be part of the second trial. Deemer, a doctoral student in material science and engineering, said the trio could expand into petroleum distillation.

The future is bright for the AWR team, but they remember the words of encouragement they received from UTEP President Diana Natalicio during a chance encounter after their May 2 UT Horizon Fund win: "It doesn't hurt to be an underdog."

Team formation

Alex Pastor grew up on El Paso's West Side idolizing his grandfather, who started as a shoeshine attendant and built himself into a successful businessman. The 2008 Coronado High School graduate operated his own seafood stand, Don Camaron, for two years. As a result he earned a Growing Up CEO Award, a national recognition for entrepreneurs under 21, and a McKelvey Foundation Entrepreneurial Scholarship.

Once at UTEP he received a market analyst internship at the Hub of Human Innovation, an El Paso-based technology incubator that helps develop technology-based businesses. His duties included proofreading and editing business plans, conducting market research, and helping develop financial statements for thriving new companies.

Last year Pastor heard about the Paso del Norte (PDN) Venture Competition, where entrepreneurs and business leaders judge a company's business plan, and was interested in working on a project that involved recycled water. He went to UTEP's Center for Research Entrepreneurship and Innovative Enterprises (CREIE) and was given a list of projects it was trying to develop, including one proposed by Deemer, who happened to be in the office that day.

Eva Deemer graduated from El Paso's Franklin High School in 2003. She left town briefly to study chemistry and play soccer for a small, private university in San Antonio. Disappointed with the undergraduate research opportunities, she enrolled at UTEP and began to work with Wen-Yee Lee, Ph.D., associate professor of chemistry. The two share a patent in an analytical method for measuring bound glycerides in a biodiesel composition. Deemer earned her bachelor's in chemistry in 2008, entered the job market and worked in research and development for several El Paso-based energy companies. During that time she was able to see how business collaborations worked, including alliances with government entities interested in environmental technologies.

After a few years she returned to UTEP to begin her doctoral program under Russ Chianelli, Ph.D., professor of chemistry and director of UTEP's Materials Research and Technology Institute. Chianelli suggested she study graphene, a carbon-based substance that is thin, strong and an efficient conductor of heat and electricity.

Deemer was speaking with CREIE Director Gary Williams, Ph.D., about creating a business to capitalize on her research when she was introduced to a fellow student interested in technology and entrepreneurship: Alex Pastor.

Pastor was excited about marketing Deemer's technology, but recognized they would need someone with a stronger financial background. He suggested an M.B.A. student he knew from the Hub: Diego Capeletti.

Capeletti, who graduates May 18, is an international student from Tandil, Argentina, a city about 200 miles southwest of Buenos Aires. His interest in business comes from his father, a former banker who is CEO of a private hospital in Argentina. When possible, he joined his father at work and saw how business was done.

The young man earned his undergraduate degree from the Pontifical Catholic University of Argentina in Rosario and joined the workforce. After his decision to pursue a graduate degree, he contacted a close, childhood friend – a UTEP M.B.A. student – who suggested he apply for the program. He did, and was accepted in 2011. He joined the Hub as an intern and participated in the 2012 Paso del Norte Venture Competition. His team did not win, but his written business plan was judged the best.

Married in 2011 and expecting his first child in March 2013, Capeletti initially rebuffed Pastor's invitation to join American Water Recycling because he understood the level of commitment for a venture project. Despite his concerns, he met with Pastor and Deemer to discuss the project at Deemer's home. The meeting lasted four hours and left Capeletti a bit shell shocked by the science, but interested in the potential. He also was intrigued by the doctoral student's passion and gregarious nature, which was unlike the doctoral students he knew. He decided to join the team.

Deemer registered the team after Thanksgiving for the March PDN contest. The easy part was over.

"It was just fun"

The trio got serious after winter break with the help of UTEP's CREIE and The Mike Loya Center for Innovation and Commerce, which offered structure and deadlines for progress. The AWR team agreed that the constant feedback and attention to detail kept them vigilant for technological advances and financial factors that could alter their business plan. The team learned how and when to refine their plan on the fly.

The team was confident after it won the March PDN competition, but it continued to refine its presentation as necessary up to the day before the UT Horizon contest held at the UT System headquarters in Austin.

Pastor called the presentation hall "the most intimidating room in the country." It was two-stories tall with crimson walls and large video monitors throughout. They presented before about 10 judges, and sitting in the audience as they presented were fellow contestants and well-wishers, including other UTEP students participating in the competition. As with most presentations, theirs went well. Often it is during the usually tough question-and-answer session that many teams wither. UTEP's AWR team, each holding an aquamarine crystal charm for good luck, seemed to get stronger.

"There was no question (Deemer) couldn't answer," Pastor said. "I got the feeling after a while that (the judges) didn't want to ask more questions because they might look (unprepared)."

Deemer added, "At that point it was just fun."

The team made a quick exit after their presentation because it had to set up for a trade show in a different building as part of a separate contest, the Global Venture Labs Investment Competition. That competition is considered the Super Bowl of its genre and involved 45 top teams from around the country and throughout the world. AWR finished as a Top 10 semi-finalist in that contest.

UT Horizon Fund officials announced their winner at about 7:30 p.m. May 2. Capeletti stayed behind to represent the team. He accepted the oversized check and tried not to faint.

"I almost had a heart attack," he said, adding that he quickly sent a text message to his teammates and word spread quickly. Pastor and Deemer began to get congratulatory messages on their phones.

The team, still on a visible high from the experience, encouraged UTEP students to participate in future venture competitions because of the benefits, including the opportunity to network with entrepreneurs. They said every participant is a winner.

As for the team, it is back to work to get the commercial pilot project going.

"Now things get real," Deemer said.