Firms from Georgia Tech Incubator Raise $1 Billion
Companies associated with ATDC attract top venture capital deals
Posted June 6, 2007 | Atlanta, GA
Companies associated with Georgia Tech's science and technology incubator have raised more than a billion dollars in venture capital since 1999 - and in 2006 accounted for 10 of the top 25 venture deals in Georgia, including the two largest.
The incubator, the Advanced Technology Development Center (ATDC), has turned out 112 science and technology companies since 1986 - including 31 that have been represented on the public markets through IPOs or acquisitions.
At a May 10 event held to showcase the incubator's companies, ATDC 'graduated' six early-stage firms - three Internet companies, two semiconductor firms and a developer of homeland security technology. Together, those six early-stage firms raised more than $50 million while in the incubator.
"ATDC is a source of exciting deal flow, and we have invested in many ATDC companies," said Fred Sturgis, managing director of Miami-based venture capital firm H.I.G. Ventures, a $4 billion fund. "ATDC attracts leading entrepreneurs in Georgia and increases the probability of success for its companies."
The billion dollars raised by ATDC companies included 160 deals in 75 companies from 138 venture investors. The average deal size was $6.7 million, though funding amounts varied, with 32 companies raising less than $5 million and 10 raising more than $25 million. More than 90 of the 160 deals involved investors from outside Georgia.
"ATDC is an invaluable resource to Georgia, as the leading organization for advancing business incubation and entrepreneurship," said Susan O'Dwyer, national director of venture capital research for PricewaterhouseCoopers. "Over its 26-year history, ATDC's staff has provided hundreds of entrepreneurs at early-stage companies with the right experience, business planning advice and networking resources needed to grow their companies - while contributing to Georgia's reputation for innovation."
ATDC companies accounted for one of every five venture capital deals done in Georgia over the last eight years, and 15 percent of the total dollars raised in the state. The one billion includes funds raised by companies throughout their growth, including their time in the incubator and after they graduated. The amount does not include the value of mergers and acquisitions - which would add another $830 million in shareholder value.
While Georgia has pursued traditional economic development strategies, it has also made substantial, long-term investments in supporting startup companies. In 2005, ATDC companies - including both graduates and current members - generated $1.7 billion in revenues and provided 4,326 jobs.
The incubator is an example of how universities are making an increasingly important contribution to local and state economies, noted Wayne Hodges, vice provost for Georgia Tech's Enterprise Innovation Institute - ATDC's parent organization.
"Through ATDC, Georgia Tech is helping build a strong community of experienced entrepreneurs," Hodges noted. "The billion-dollar celebration demonstrates that the strategy of supporting the development and growth of startup companies has paid off for the state."
About a quarter of ATDC companies grew out of technology developed at Georgia Tech. Two of the 2007 graduates, Jacket Micro Devices and Qcept Technologies, got their start in the Georgia Tech VentureLab program, an initiative that helps form companies from research innovations.
At the May 10 event, VentureLab graduated seven companies, of which three - Asankya, Sentrinsic and Vivonetics - have already been accepted into the ATDC.
"Because of its focus on real-world applications, Georgia Tech's research program generates a large number of innovations - nearly one a day - that have potential commercial value," Hodges added. "We want to move those innovations in the marketplace, through startups where those make sense and through transferring technology to existing companies."
For more information about the ATDC's billion-dollar milestone, please visit (www.atdc.org/billion/).
About the ATDC: The Advanced Technology Development Center is a nationally-recognized science and technology incubator that helps Georgia entrepreneurs launch and build successful companies. ATDC provides strategic business advice and connects its member companies to the people and resources they need to succeed.
More than 110 companies have emerged from the ATDC, including publicly-traded firms such as MindSpring Enteprises - now part of EarthLink. Headquartered at Technology Square on the Georgia Tech campus in Atlanta, ATDC has been recognized by both BusinessWeek and Inc. magazines as among the nation's top nonprofit incubators. Since 1999, ATDC companies have attracted more than a billion dollars in venture capital funding.
ATDC was formed in 1980 to stimulate growth in Georgia's technology business base and now has locations in Atlanta, Savannah and Warner Robins. ATDC is part of Georgia Tech's Enterprise Innovation Institute. For more information, please visit (www.atdc.org).
1) As of June 2007, ATDC had 34 member companies in its program. The companies are working in the following technologies:
- Software and Information Technology - 38 percent
- Bioscience and Health Care - 26 percent
- Electronics - 21 percent
- New Media and the Internet - 15 percent
2) ATDC companies do business in four Georgia cities:
- Atlanta (25 companies)
- Columbus (1 company)
- Savannah (5 companies
- Warner Robins (3 companies)
3) Ten of the top 25 venture capital deals included in the MoneyTree- Report for 2006 involved ATDC companies. (The report is a collaboration between PricewaterhouseCoopers and the National Venture Capital Association based on data provided by Thomson Financial.) The five largest deals involving ATDC companies were:
- Air2Web ($25 million)
- CardioMEMS ($22.6 million)
- EGT ($14 million)
- Jacket Micro Devices ($12 million)
- iVivity ($9.9 million)
Research News & Publications Office
Georgia Institute of Technology
75 Fifth Street, N.W., Suite 100
Atlanta, Georgia 30308 USA