Firms from Georgia Tech Incubator Raise $1 Billion
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.
Chart shows the amount of venture capital raised by companies associated with the ATDC each year since 1999.
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.”
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