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Current portfolio companies of Georgia Tech’s ATDC raise $114 million in investment capital in 2018

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Startups at the Advanced Technology Development Center (ATDC), the state of Georgia’s technology incubator, raised more than $114.3 million in investment capital in 2018.

While the activity represents a slight decrease from the year-end 2017 figure of $140 million, it reflects the general investment trend nationally for 2018: Even though the deals made were larger, fewer deals were done overall.

When ATDC program graduates’ capital raises for the year are included — $380.8 million — the total amount of money that came to Georgia technology companies with ties to the incubator is $495.1 million.

“Our current portfolio and graduate companies really made a difference in Georgia’s deal flow activity in 2018, because of the roughly 100 deals that were done in the year, 68 of those were ATDC companies,” said Brad Schweizer, ATDC investor relations manager. “That’s nearly 70 percent of all the Georgia deals and it speaks to the quality and caliber of companies that we have in our portfolios.”

In addition to the $114.3 million in capital funding current ATDC portfolio startups received from investors, they garnered an additional $8.4 million in non-dilutive funds from federal grant awards in 2018.

That’s nearly triple the amount received in 2017.

“This is significant because these federal grants and awards are extremely competitive for companies that are still refining and verifying their research and technologies,” said Connie Casteel, ATDC’s program manager for grant awards and funding.

Key to ATDC’s continued success with its portfolios is its Investor Connect program, which curates meaningful interactions between the startups and investors.

That, along with programming that prepares the startups for successfully raising money and make long-term connections with investors, is a critical component of why Investor Connect has been so successful, Schweizer said.

In 2018 the program strategically curated more than 500 connections with introductions to more than 250 different venture capitalists and angel investors.

“Introducing our companies to the investor community and making meaningful connections is our core focus,” Schweizer said. “Through our events and meetings with the venture capitalist firms such as our yearly ATDC Venture Showcases on the East Coast and West Coast and our ATDC Startup Showcase, investors continue to see as a critical and trusted partner for deal flow with high-growth startups for their firms.”

Among those investors is Fort Lauderdale, Florida-based Las Olas Venture Capital. The firm, which has more $30 million in assets under management, was the lead investor in the $4.5 million seed round of DEVCON, an ATDC portfolio company whose proprietary cybersecurity software technology helps media publishers maximize advertising revenue by identifying and eliminating fraudulent ads within their networks.

Las Olas Venture Capital also was the co-lead investor in Cypress.io’s $4 million seed round.

Cypress, another ATDC portfolio company, provides front-end automated software testing for anything that runs in a browser.

“What ATDC does well and what makes it different from other programs is the entrepreneurial fabric that makes up ATDC,” said Esteban Reyes, one of Las Olas Venture Capital’s founding partners. “You have former CEOs and founders in the equation at ATDC, working and engaging with the startups in the program in ways that are useful and practical for those startup founders.”

Las Olas focuses its investments mainly in companies that are business-to-business and creating the next generation of enterprise technologies.

DEVCON, Reyes said, is in a sector with a $40 billion opportunity, while Cypress has a $20 billion opportunity.

The two companies, he said, reflect another strategic difference with ATDC in that the incubator, which is a program of the Georgia Institute of Technology, focuses on leveraging Atlanta’s strengths to build successful technology companies.

“ATDC and Georgia Tech are taking a long-term view with their strategic focus to turn Atlanta into a major tech hub,” Reyes said. “They’re looking at the key levers that Atlanta has to its advantage and pulling those levers.

“There’s a trifecta here of new startup founders, ATDC’s team of experienced entrepreneurs, and Georgia Tech’s technical student talents. ATDC has found the right way to engage those three stakeholders and provide them with a platform so they can be collaborative and productive, which is very unique.”

About ATDC

The Advanced Technology Development Center (ATDC), a program of the Georgia Institute of Technology, is the state of Georgia’s technology startup incubator. Founded in 1980 by the Georgia General Assembly which funds it each year, ATDC’s mission is to work with entrepreneurs in Georgia to help them learn, launch, scale, and succeed in the creation of viable, disruptive technology companies. Since its founding, ATDC has grown to become one of the longest running and most successful university-affiliated incubators in the United States, with its graduate startup companies raising $3 billion in investment financing and generating more than $12 billion in revenue in the state of Georgia. To learn more, visit atdc.org.

About ATDC Investor Connect

ATDC strategically matches its portfolio companies to capital through curated investor interactions. The investor relations manager is available for consultations to help companies develop a focused funding strategy. In addition, the manager works with the incubator’s coaching staff for funding preparation. The outcome creates exceptionally engineered investor readiness, resulting in high value deal flow for investors. For more information, visit atdc.org/how-we-help/capital.

Source: https://atdc.org/atdc-news/advanced-technology-development-center-current-portfolio-companies-raise-114-million-in-investment-capital-in-2018/

How this venture capital firm wants to help start-ups, with no government experience, navigate Washington

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Yanev Suissa, a venture capitalist formerly with New Enterprise Associates, wants to invest in startups that could eventually snap up government contracts.

His approach, he admits, is unorthodox: to invest in startups who have so far had nothing to do with the public sector.

A former senior investment officer under the Bush and Obama administrations, Suissa recently founded SineWave Ventures, an early-stage investment fund aiming to back commercial startups and help guide them through marketing to local, state and federal governments.

Keep reading this article at: http://www.nextgov.com/cio-briefing/2015/07/q-how-venture-fund-aims-push-startups-federal-contracts/118018

Illustration courtesy Harvard Business Review - https://hbr.org/1998/11/how-venture-capital-works
Illustration courtesy Harvard Business Review – https://hbr.org/1998/11/how-venture-capital-works

Recession makes innovation more critical than ever for competitiveness

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The recession has expanded the business advantages of Georgia manufacturers that compete on the basis of innovation in new or technologically improved products, processes, organizational structures or marketing practices. These innovative companies are more than twice as profitable as firms competing on the basis of low price.

That’s one conclusion of the 2010 Georgia Manufacturing Survey, which also found that companies are preparing for post-recession growth, expanding export capabilities, addressing sustainability issues — and still dealing with out-sourcing and in-sourcing. The survey, which included nearly 500 manufacturers, was conducted by Georgia Tech’s Enterprise Innovation Institute, the Georgia Tech School of Public Policy, and Kennesaw State University, with support from the Georgia Department of Labor and accounting firm Habif, Arogeti & Wynne, LLP.

Georgia has approximately 10,000 manufacturers that provide nearly 350,000 jobs and account for 11 percent of the gross state product. Workers in manufacturing companies earn wages averaging nearly twice those of workers in retail companies.

The survey found a widening profitability gap between manufacturers that compete on the basis of innovation compared to those that use other competitive strategies. That gap has grown in each survey conducted since 2002.

“Companies that compete on the basis of innovation are much more profitable, pay higher wages and more likely to benefit from in-sourcing opportunities than firms that compete on low price,” said Jan Youtie, the survey’s director and a principal research associate in Georgia Tech’s Enterprise Innovation Institute. “Adoption of an innovation strategy can be useful to manufacturers regardless of industrial segment, and is especially important during difficult economic times.”

As part of the survey, companies were asked to rank six competitive strategies for their importance to winning sales. More than half of the respondents mentioned “high quality,” while approximately 20 percent chose “low price” or “adapting to customer needs.” Fewer than 10 percent reported “innovation/new technology” as a primary competitive strategy.

Across all six strategies, innovation was associated with the highest mean return on sales: 14 percent, compared to just six percent for the low-price strategy. And those financial benefits extended to workers, whose annual salaries averaged $10,000 per year more at innovative manufacturers than at other companies.

The top five innovative tactics reported by respondents were (1) working with customers to create or design a product, process or other innovation, (2) signing a confidentiality agreement to access a new product or process, (3) working with suppliers to create or design a product, process or other innovation, (4) purchasing new equipment, and (5) conducting research and development activities in-house.

While manufacturers of technology products are most often associated with the strategy, innovative companies can be found in all industrial segments, said Philip Shapira, co-director of the survey and professor in the Georgia Tech School of Public Policy.

“Many people think that innovation is something that has to be done in a lab, but our results show that innovation occurs more broadly, particularly as companies partner with customers and suppliers to take into account their needs for a new product or process,” he explained. “While high technology companies tend to be innovative by their nature, innovation occurs across all segments, and every firm has opportunities to be innovative.”

Companies often cite cost as a reason for not innovating, but Shapira noted that only 10 percent of companies take advantage of R&D tax credits; fewer still use investment tax credits. “While financial incentives can assist innovation, there is a greater need to build awareness and capabilities among more of the state’s firms to undertake innovation,” he said.

Though more than two-thirds of Georgia’s manufacturers have cut jobs or lost sales in the recession, many of these companies are now looking toward the future with plans for locating new customers, boosting capital investment, expanding research and development and continuing to reduce costs.

“When we look at their plans, Georgia manufacturers are in an expansive mood, looking for new customers and getting ready for the next phase of economic growth,” Youtie said.

The survey found that 70 percent of respondents were looking for new customers, 20 percent planned to expand capital investment, and 15 percent planned to increase expenditures on research and development. At the same time, 60 percent of respondents said they still planned to cut costs.

Another trend studied was growth in the number companies selling to international markets. More than half of the responding manufacturers said they were exporters — and those manufacturers reported 50 percent higher profitability than non-exporters. Some 22 percent of respondents had increased their export sales since the last survey in 2008.

“We don’t find much difference between exporting companies when comparing them by the amount they export,” Youtie noted. “What seems to be important is the capability to export. We think there is some learning that takes place, and some capability that a company develops to become an exporter. That capability translates into improved performance across the board, in addition to creating new markets and different margins.”

The survey also found that out-sourcing of work has leveled off, with approximately 16 percent of manufacturers affected by the loss of business in 2010. At the same time, the percentage of firms benefitting from in-sourcing — movement of work to Georgia — has grown to nearly 15 percent.

“Out-sourcing isn’t going away, but it has stabilized,” Youtie said. “In-sourcing appears to be growing, which creates opportunities for good manufacturers to benefit from consolidation of production from other U.S. facilities or even from overseas.”

The study also looked at sustainability issues, and found that 60 percent of companies recycle and attempt to reduce waste — one form of sustainability. However, just 11 percent of respondents had inventoried their carbon footprints or emissions, and fewer than five percent were using renewable energy.

The bottom line for manufacturers?

“The results of our survey can point manufacturers to a way forward for getting ready for the next phase,” said Youtie. “Companies can develop innovation capabilities; they can look into exporting and they can collaborate more with suppliers and customers.”

___________________________________

Research News & Publications Office
Enterprise Innovation Institute
Georgia Institute of Technology
75 Fifth Street, N.W., Suite 314
Atlanta, Georgia 30308 USA

Media Relations Contacts: John Toon (404-894-6986) (jtoon@gatech.edu) or Nancy Fullbright (912-963-2509) (nancy.fullbright@innovate.gatech.edu).

Writer: John Toon –  October 18, 2010

Buying club now offering microloans up to $25K to business members

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A division of Wal-Mart Stores Inc., which is based in Bentonville, Ark., is testing a program with Superior Financial Group, one of 13 federally licensed nonbank lenders, and will offer $5,000 to $25,000 loans to members who qualify.

Sam’s Club says 15 percent of its business members reported they were denied a loan in a November survey. That’s up from 12 percent in April 2009.

The program will focus on minority-, women- and veteran-owned businesses.

Sam’s Club members who apply for a small business loan during the pilot will receive $100 off the application fee, a 20 percent discount and a discount on interest rates.

Businesses can pay $35 for a membership to Sam’s Club that includes three annual membership cards that allow them to shop at 600 Sam’s Clubs in the U.S. Sam’s Club offers other memberships to consumers and businesses that cost as much as $100 annually depending on the features included.

Although the economy has grown for three straight quarters, tight credit remains a problem for many consumers and businesses.

“Access to capital is a major pain point for our members,” said Catherine Corley, vice president, membership at Sam’s Club.

— Copyright 2010 The Associated Press.

Startup Accelerator ATDC Celebrates 30th Anniversary

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Georgia Tech’s startup accelerator, the Advanced Technology Development Center (ATDC), celebrated 30 years of helping launch and build technology companies with a “Startup Showcase” attended by more than 500 persons on May 24th.  At the event, ATDC added four companies to its long list of graduates.

Georgia Tech President G.P. “Bud” Peterson was the main speaker, reviewing the ATDC’s history and congratulating members of the Committee of Twenty – Georgia Tech alumni whose interest in technology startups during the late 1970s led to formation of the incubator.

“It’s really a pleasure to be here to celebrate this 30-year anniversary and to be able to reflect back on some of the great successes of the ATDC,” Peterson told a crowd of entrepreneurs assembled in the ballroom of the Georgia Tech Hotel.  “There are many, many positive things that have resulted from this organization and its interaction with people in this community, the greater Atlanta area, the state of Georgia – and all across the country.”

Stephen Fleming, Georgia Tech vice president and executive director of the Enterprise Innovation Institute, reviewed progress made by the ATDC in expanding membership and increasing program offerings over the past year

“If you are a Georgia technology entrepreneur, we will help you no matter where you are located in the state or what your background is,” he said.  “In addition to our brick-and-mortar facilities in Atlanta and Savannah, we are spreading across the rest of the state, which is part of our mandate.”

Nearly a year ago, ATDC opened its membership to all technology companies in Georgia.  On the day of the Showcase, ATDC had 321 members.  “That makes us the largest technology incubator, as far as I know, in the world,” Fleming added.

The startup accelerator still focuses on companies that are developing new technologies, but no longer emphasizes raising venture capital.  That’s because many entrepreneurs are now bootstrapping their operations or have independent sources of funding, Fleming said.

Even with the incubator’s reduced fund-raising focus and the down economy, ATDC companies still raised a total of at least $150 million in venture capital during the past year, Fleming said.

ATDC is also expanding the geographic breadth of its operations beyond its physical incubators in Atlanta and Savannah.  At the Showcase, Fleming announced that ATDC would begin offering educational programs in Gwinnett County, along with regular office hours to meet entrepreneurs – though there are no current plans to provide incubator space there.

He also noted that ATDC has resumed its focus on biosciences companies with the hiring of two staff members – Nina Sawczuk and Harold Shlevin – both with long experience in the life sciences industry.

Fleming congratulated representatives from four companies that had met requirements for graduating from the incubator.  The four – CommerceV3, Endgame Systems, Izenda Reports and Purewire – joined 120 other companies on a list of ATDC graduates that goes back to 1986.

President Peterson took note of ATDC’s best known graduate: Suniva, which became the Southeast’s first manufacturer of photovoltaic cells in 2009.  The firm grew out of research in Georgia Tech’s University Center of Excellence for Photovoltaics Research and Education, which is part of the School of Electrical and Computer Engineering.

“Suniva has created more than 150 clean-energy jobs manufacturing high-efficiency solar cells,” Peterson noted.  The company was recently recognized by U.S. Secretary of Energy Steven Chu, who called it “the poster child for the new energy economy.”

About the ATDC: The Advanced Technology Development Center (ATDC) is a startup accelerator that helps Georgia technology entrepreneurs launch and build successful companies.  For 30 years, ATDC has helped create millions of dollars in tax revenues by graduating more than 120 companies, which together have raised more than a billion dollars in outside financing.  ATDC has provided business incubation and acceleration services to thousands of Georgia entrepreneurs.

Recently, ATDC expanded its mission by merging with Georgia Tech’s VentureLab and with the Georgia SBIR Assistance Program, which are also part of Georgia Tech’s Enterprise Innovation Institute.  This change has enabled ATDC to greatly extend its reach to serve more technology companies along multiple growth paths and at all stages of development.  ATDC has opened its membership to all technology entrepreneurs in Georgia, from those at the earliest conception stage to the well-established, venture-fundable companies.

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