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• Item # 6 <br /> City of <br /> Elk -� <br /> River <br /> MEMORANDUM <br /> TO: Economic Development Authority <br /> FROM: Marc Nevinski, Assistant Director of Economic Development <br /> DATE: July 9, 2001 <br /> SUBJECT: Business Incubator Six Month Review <br /> It is appropriate at this time to review the past six months of activity associated with <br /> the Business Incubator Program. Staff has prepared the following memo recapping the <br /> status of incubator companies and prospects. Additionally, a memo from Mr. Harlan <br /> Jacobs is attached recapping the venture capital market over the past six months. <br /> In April, Cymbet Corporation (formerly Integrated Power Solutions) graduated from <br /> • the incubator and moved into market rate office/warehouse space in the West Business <br /> Park. Although the company was only in the incubator for eight months, it provided <br /> them the necessary resources to hire several highly educated employees and locate $4.8 <br /> million dollars in venture capital. <br /> Vertical Publishing is presently the only company in the incubator program, although <br /> SolarAttic continues to lease space at market rate. The past year has been challenging <br /> for the VP as they have been allied more closely with the "dot-corn" industry than the <br /> publishing industry. Subsequently, finding both investors and clients has been difficult. <br /> In February, the founders suspended their salaries and found other jobs to pay the <br /> bills. However, they continue to work on VP projects evenings and weekends and <br /> their efforts appear to be paying off. As of mid-June the company signed two new <br /> contracts, bringing their total number of clients to seven. It is anticipated that these <br /> contracts will generate significant cash flow over the next year and allow the founders <br /> to dedicate their full attention to the company. <br /> Over the next several months staff will continue working with its three current <br /> prospects, all of which are technology based firms. Staff also plans to explore <br /> opportunities associated with the new technology transfer program from the U of M, <br /> which is intended to move research technology into the marketplace. <br /> Attachment <br /> • Analysis of Venture Capital Market from Harlan Jacobs <br />