ORLANDO, Fla. – The University of Central Florida recently launched an incubator to take advantage of in-house ideas and the growing number of high-tech companies in Orlando and its surrounding areas.
The Central Florida Business and Technology Development Center (CFBDTC) is expected to bring “business minds and technical minds together to create a commercial success,” said Tom O’Neal, CFBDTC’s director, who also is the associate director for business and administration at UCF’s School of Optics. The incubator will back a broad range of high-tech companies based on ideas generated both on and off campus in areas such as the Internet, laser and electro-optics, wireless networking, electrical engineering and space based technology. “We want companies that are going to grow fast and produce wealth, ” he added.
As one of only three universities in the country to offer degrees in optic and laser research, UC Florida has a reputation for spawning high-tech innovations. The school also has a strong computer science department and has been trying to partner with local companies to boost the economy, O’Neal said. The university, for example, has had a long-standing working relationship with Murray Hill, N.J.-based Lucent Technologies.
The incubator, which received $800,000 from various university departments, as well as state-run agencies like the Florida High-Technology Corridor Council and the Technology Research and Development Authority, will provide its tenants discounted office space and everything from advice on how to write an effective business plan to putting together a management team. CFBDTC houses two organizations, the Small Business Development Center, funded by the government-run Small Business Administration, and the Central Florida Innovation Corp. (CFLIC), both of which will provide companies with enough guidance to bring their products into focus and get them up and running.
The Small Business Development Center can, for example, help companies get the inside track on minority programs, while the CFLIC, set up by the state to encourage business growth, will prepare companies for their first round of venture capital, O’Neal said. In addition, the incubator holds monthly meetings called “Technology After Dark,” where the incubated companies, potential employees and VCs meet to discuss a company’s progress in the incubator.
The Screening Process
Candidates for the incubator are screened by a selection committee that must determine whether or not a company has a competitive product ready for the commercial market. Answers to questions such as do they have a basic business plan and financial forecast, was there any thought given to a management team and is there really a market for this product, are crucial. “We are not crazy about the idea of having some lone faculty member in the incubator who thinks he has an idea for a product but has not given any thought to the business end of things,” he added. So far, the incubator has received about six applications a month, but O’Neal believes the number will climb as the center gains more exposure.
The incubator does not take ownership of any of its companies, O’Neal said, explaining that it was founded by the university as a way to connect with the community. Its current funding from the university and from external government sources is expected to last about two years, at which time the center hopes to become self-sufficient from the profits that in-house technologies might generate, he said. O’Neal added that the incubator has not ruled out taking a small equity stake from its tenants if it would help the center reach self-sufficiency. In the mean time, if the incubator turns an in-house technology into a commercial success, the university would profit from the royalties generated by the technology. Graduated companies could also donate to the incubator after reaching some level of success.
CFLIC, on the other hand, may take a 3% to 5% equity stake in a certain company if it demands a higher level of attention, O’Neal said. In such cases, CFLIC will help write a business plan and introduce a company to various VCs, he said.
The incubator intends to house 35 to 45 companies simultaneously for less than two years each, which translates to about one to two companies graduating each month. The center at press time had 11 tenants, one of which was a UC Florida professor developing an idea, and the remainder were from the outside. The incubated companies cut across a wide swath of high-tech fields and even includes a smaller incubator, Scottish Trade International, which occupies 10 of the center’s rooms and aims to introduce high-tech Scottish businesses into the North American marketplace, O’Neal said.
The UFC incubator was launched in response to the community’s desire to expand the high-tech industry in and around Orlando. “Universities in urban settings need to be responsive to their communities, and this community wanted to have more of a high-tech industry,” O’Neal said.