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<br /> THE BUSINESS JOURNAL I twincities.bizjournals.com
<br /> October 11,2002
<br /> iotechincubators coming to
<br /> Introducing the Revolutionary G
<br /> „,-,„,..„,
<br /> life for Twin Cities startups � { 1
<br /> J
<br /> It sounds like something out of a Michael footsteps of a program at University ofIt
<br /> Crichton novel. Wisconsin at Madison, Dean Robert Elde of r
<br /> Coming soon:The Incubator. the College of Biological Sciences has mapped - -'y v A
<br /> You dont need to worry about mutating out an office park to translate university-orig- ,.. N r
<br /> viruses in this book,though.In the emerging Mated research into commercial applications. ,-
<br /> companies context,incubators are about pro- The shared services will include a wet lab in ,-- -, a -:-:::-.•,..,,,. ...,,,_
<br /> viding the right environment for growth. which researchers can borrow time and pay as
<br /> An incubator is a facility in which emerging they go. ■ Ideal Storage Solution ■ Professional
<br /> companies share space and resources. The The project is a major step beyond the uni-
<br /> incubator concept flour- versity's existing modest incubator, Biodale. ■ 10 Year Warranty ■ Easy to Cle.
<br /> ished during the last half of Biodale, says Elde, "is the Kinko's of biotech
<br /> the 1990s,particularly on the services."The new facility,however,when it is
<br /> West Coast,where technolo- ultimately funded and built,will take the corn-
<br /> gy ,
<br /> mercial and research potential to an entirely �T"
<br /> companies could use �
<br /> economies of scale to keep F new level.
<br /> I Commercial ventures have proven a major
<br /> their costs down. (Yes,some
<br /> California tech companies source of funding for the university,which in
<br /> 2000 settled a dispute with pharmaceutical really did try to keep their costs down.) Strategies maker Glaxo Wellcome over school researchJoin
<br /> Many of these incubators on an anti-viral drug by signing a licensing �,,
<br /> VI s G
<br /> were for-profit enterprises, Andrew Humphrey,. agreement valued at approximately$300 mil
<br /> S launched by entrepreneurs lion.
<br /> with financial or professional backgrounds, Harlan Jacobs,a seasoned financial veteran ;:-""
<br /> •
<br /> e .
<br /> who often took equity positions in the compa- of technology startups, has also launched ,
<br /> vies that worked in their space.Not surprising- Genesis Business Centers in St.Paul.Genesis
<br /> ly, since the tech crash,incubators (including is a high-tech, for-profit incubator program
<br /> several in Minnesota) have traveled a rocky that will add a wet-lab biotech component in V
<br /> road.Many incubators dissolved as their par- the first quarter of 2003. The Minnesota
<br /> slump.ump.
<br /> slcompanies fell victim to the market Pros and COOS Keystone Program g"
<br /> But there are signs that incubators may be Even though the reputation of incubators recognizes company -
<br /> making a comeback,at least in certain sectors. took a hit in recent years,the incubator model for giving over 2%
<br /> In the Twin Cities, several incubators are in may actually make more sense in the current,
<br /> place or on the drawing board,targeting differ- cash-strapped market than it did in the 1990s, , of pre-tax earnings
<br /> ent industries and offering varying levels of when capital was easier to find.For companies to the charitable
<br /> service and experience.The biotech sector is in resource-heavy industries such as biotech and nonprofit
<br /> particularly hot,with for-profit and nonprofit nology, an incubator may offer cost-effective
<br /> incubators in the works. building blocks for financial management, community.
<br /> infrastructure,marketing and technology.
<br /> Shared services This enhanced buying power,plus the ben-
<br /> Think of an incubator as the high-tech efit of working in close quarters with related This year
<br /> equivalent of college students teaming up to companies and with professionals who have The Minnesota Keystone
<br /> rent an apartment. An incubator targets the experience in your sector,may make an incu-
<br /> key needs of emerging companies,which usu- bator an attractive option. Program presents the 200
<br /> ally have all the infrastructure costs associated But as with any strategic decision,it pays to
<br /> with launching a business but are often short look at the market and make a careful cost-
<br /> .
<br /> ost Honored Company AWart
<br /> on cash or are hoarding cash for key R&D and benefit analysis.There are downsides to this i H 1
<br /> marketing expenses. model,too.If the incubator is not well-man-
<br /> By bringing together several emerging corn- aged,you may find yourself with more admin- RB C
<br /> panes in related industries, an incubator can istrative headaches than you anticipated — RBC
<br /> • provide reduced costs for space, shared sup- and with less flexibility to make changes to =e
<br /> Dain
<br /> port staff and telecommunications systems, help your business. RBC ,,,
<br /> technology services and so on.Depending on If you grow dissatisfied with the professional
<br /> the incubator and the background of the peo- services offered through the incubator(such as ,
<br /> pre behind it, the services provided may also financial counseling or business planning),you
<br /> include financial consulting, business plan- may be partially handcuffed by the terms of 1 :30am
<br /> ning, marketing expertise, and (for scientific your contract. Finally, the quality of the other Hilton Minneapolis• 1(
<br /> ventures)shared laboratory and research facil- companies sharing your space can have a posi-
<br /> ities. tive or negative impact on the arrangement.
<br /> Many of these services would be difficult or Will an incubator work for your company?If
<br /> impractical for a single emerging company to you can identify an i cubator in your business Tickets: $48
<br /> replicate on its own. Instead, the incubator sector that meets he cost-benefit analysis $425 table of 10 Online
<br /> puts them under one roof and divides up the outlined above, th n it is certainly worth a Nonprofit: $40
<br /> costs.Some incubators are designed under a careful look. $350 table of 10 RS
<br /> for-profit model,and others(such as universi
<br /> ty initiatives) are run as nonprofit organiza-
<br /> tions. Andrew Humphrey is partner and chair of the Emerging compa- 2002 Minnesota Keystone Program Sp
<br /> nies practice at the law firm of Faegre&Benson.He can be reachedle Minnesota,BORN,The Business JourBIOteCh boom at ahumphrey@faegre.com. Target Foundation,Wells Fargo Minne
<br /> The University of Minnesota is pursuing an The Minnesota Keystone Program is operated by
<br /> ambitious biotech incubator.Following in the
<br />
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