Venture Wizards

discuss

With an 80 percent startup success rate, how experts at Georgia Tech's ATDC are helping hatch entrepreneurs' high-tech ideas.

Bobby L. Hickman

May 8, 2008

More than 100 high-tech startups have benefited from Georgia Tech's Advanced Technology Development Center (ATDC), with more than 80 percent of those enterprises typically becoming successful.

Lance Weatherby, a venture catalyst with the ATDC's Enterprise Innovation Institute (EII), says the institute helps enterprises of all types improve their competitiveness through the application of science, technology and innovation.

ATDC is a nationally recognized bioscience and technology incubator that helps Georgia entrepreneurs launch and build companies. It was formed in 1980 by the state legislature to create technology jobs in Georgia. The ATDC focuses on start-up companies that have the opportunity to become very large. Weatherby says, "In the music business, there's the band that plays at the local weddings and receptions. They make a good living but they don't have the scale to grow large. Well, we're looking for the band that has the ability to cut a lot of records and sell them."

Pre-natal care

One part of the EII's commercialization services department that gets plenty of attention is Venture Labs, which works with inventions created at Georgia Tech. When an invention disclosure is filed with the Office of Technology Licensing, a Venture Lab technology evaluator determines where the best potential lies for that disclosure. They can go down one of three paths: formation of a high-tech startup company; licensing of the invention or technology to an established company; or creation of an entity for a faculty member to consult with industry on commercializing the invention. Once an option has been selected, Venture Lab takes the company on the appropriate route to implement the chosen strategy.

Venture Labs includes a group of volunteers called Venture Fellows. These are typically successful serial entrepreneurs who are looking for another technology to commercialize, Weatherby says. The group helps the professors in Venture Labs take their invention and create a company. The group typically has 40 projects going on at any one time. "It's all very early stage stuff," he says. "Stephen Fleming (chief commercialization office at Georgia Tech) likes to draw the analogy that if ATDC is an incubator, then Venture Labs is pre-natal care."

Overall at the ATDC, Weatherby says, "We've had 112 companies successfully come through the program, and we're graduating six more next week." He said the incubator's success rate is high. "Around 80 percent end up being successful. And by successful, we mean they're either still in business, they were acquired by another company or they went through an IPO." He noted the most famous company to come through the incubator was Mindspring in 1995.

"Essentially we look for companies that have the ability to scale and that have an innovative product or service," he says. "Often they have proprietary technology and they typically have a team of people in place when they come into the incubator. And they have a unique technology, something innovative that's addressing a potentially large market."

Some 180 companies apply each year, with 14 accepted last year. "It's not that we're that selective," he says. The low acceptance rate is because "we focus on technology startups. There are a lot of entrepreneurs with good ideas, but they're not technology startups."

ATDC's primary program is the incubator program. There are currently 44 companies participating in the program right now, which is located in Technology Square. The center provides credibility for startups as well as "connections to the people and resources they need to succeed. We increase the probability that their startup is going to be successful."

As an ATDC venture catalyst, Weatherby consults with businesses in the incubator on issues they are facing. There are a number of venture catalysts at the center, and most have both an industry and a functional specialty. For example, Weatherby focuses on companies that match his background in the Internet and new media. There are other catalysts with experience in such fields as bioscience, hardware and enterprise software. Meanwhile, he says,  "I also grew up in sales and marketing and product development, so I help companies with those issues, regardless of their industry."

Acceptance

Once a company has been accepted, it typically takes a company six weeks to a year to come into the incubator, depending on how prepared they are for the process. Most companies come aboard within three months. "They typically come to us when they start thinking about raising money," he says.

ATDC mostly works through various partnerships to spread the word about their services. "We're trying to capture the next generation of entrepreneurs, and that's a large group of people. We engage in a lot of community activities that revolve around technology, so we get to know who they are and they get to know who we are by one-on-one interaction." He adds, "We're also active in the blogosphere to achieve that same end."

The ATDC stresses building a community among the companies in their programs. "We can consult with these people but they can really learn more from each other," Weatherby says. "So we create opportunities for peer-to-peer interaction. And we offer them room together in a great building at a great location, with low market rates that are attractive to a startup."

Weatherby also notes that there are fewer than 50 entrepreneurs who are serial technology entrepreneurs. He says, "We ask them to our events and ask them to mentor some of our younger companies. We know we're doing something right when entrepreneurs who are very experienced – who don't need some of the types of help we provide -- come back through because they want to provide help to the next generation. That's what makes this place special."