By guest authors Irina Patterson and Candice Arnold
I am talking to Stephen Fleming, who is a vice president at the Georgia Institute of Technology in Atlanta, where he is currently overseeing the Enterprise Innovation Institute.
The institute is focused on helping enterprises improve their competitiveness through the application of science, technology, and innovation. During fiscal year 2009, among other projects, the institute evaluated 149 Georgia Tech innovations and formed 20 new companies based on this intellectual property; the startups that were founded based on Georgia Tech intellectual property attracted nearly $111 million in investment. The institute also assisted 44 startup technology companies through its incubator, Advanced Technology Development Center, and ATDC companies attracted $151 million in capital activity through venture capital investment and M&As.
Irina: Hi, Stephen. Let’s start with a brief overview.
Stephen: Georgia Tech, the Georgia Institute of Technology, is a public research university in Atlanta. I run the part of Georgia Tech that reaches out to the community. That can be everywhere from two graduate students with an idea at a Starbucks all the way up to the Boeing Corporation, or Intel, or Hewlett-Packard. We work with companies at all stages and all manners of interaction.
I have nine operating divisions under me. One of them is our incubator, the Advanced Technology Development Center (ATDC). [It] is one of the oldest university-based business incubators in the country. We suspect it’s the largest. It’s 31 years old.
We have more than 400 member companies. We have a substantial full-time staff and a substantial network of volunteers and community mentors who help the entrepreneurs as part of ATDC. We do a lot of things to help entrepreneurs and entrepreneurial companies. We manage several pools of investment dollars that we can make available to small companies in Georgia.
Irina: When was the incubator founded?
Stephen: In 1980. It’s been around for a while. We have our 31st anniversary in, I think, May 2011.
Irina: Do you know how many companies have been incubated since then?
Stephen: Hundreds. We changed the model about two years ago. Up until that point, it was a very selective incubator in that it would look at several hundred applications a year and pick 10 or 12 to come through the process, much like a venture capital firm. We eliminated that exclusivity a year and a half ago. We now want to provide services for any company in Georgia, regardless of its path. Under the old path, we had 120 graduates. I don’t know how many companies entered the process. It would have been, obviously, more than 120 because not everyone makes it out.
Irina: Does the incubator have any industry preference?
Stephen: It is a technology incubator. One of the few criterion we have is the companies have to be creating new technologies. If they’re simply implementing or bringing value out of resale or something like that, that does not qualify. They have to be creating something.
That being said, we span the gamut from aerospace to X-rays. The most represented sector is software because that takes the least amount of capital to develop. We have medical device companies. We have advanced materials companies. We have clean energy and bio-fuels companies, semiconductor companies. We have a little of everything.
Irina: How many software companies do you currently have?
Stephen: I’d have to run a search, but it’s certainly more than 200. It might be more than 300. The total incubator is 400 companies. I’m guessing that between half and three-quarters of them are software companies.
Irina: Do you have any preference for when a company should apply to your incubator?
Stephen: We have four stages in our model. The concept stage, which is the earliest, as the name implies, really is a concept. The founders have an idea that they probably have not incorporated yet. In many cases, they haven’t quit their day jobs yet. If the are students, they’re still in classes. They have an idea. That’s the largest number of companies we have, the concept stage.
The funnel narrows as you move to more mature stages. Next, we have the prototype stage, third is the production stage, and fourth is expansion. Those are self-explanatory.
As a company gets more traction and attracts some level of commercial success, the mix of services we provide for that company changes. We’ll provide different types of advice and counseling to a concept-stage company from what we will to a company that’s already in production and looking to expand.