Preparing for graduation

After their time at the incubator, companies graduate and become fully independent businesses. The next generation of ATI graduates are ready to celebrate their progress in April at ATI’s annual graduation ceremony. This year’s class consisted of 11 companies, specializing in technologies ranging from biofuels to cardiac monitoring systems.

But just because their formal ties with ATI are being severed doesn’t mean that some of these businesses aren’t already well established.

Monebo, a health-care equipment company and 2009 ATI graduate, has research facilities around the world and will have $1 million in revenue this year.

“We are starting to get very good name recognition,” said CEO Mike Misczynski. “We’re starting to get invited to meetings with the FDA. We’ve launched. The after-burners are going.”

Monebo had previously tried its luck as a start-up owned by Healthcare Associates of New York, a regulated utility. Misczynski soon found out that all the bureaucratic red tape only gave his company more hurdles to overcome.

“After about six months, it became very evident that trying to operate a high-tech entrepreneurial start-up within the confines of a regulated healthcare company was not gonna fly,” he said. “So we spun out and went from there.”

After hearing about ATI online, they decided to relocate to Austin and see if they could hitch their wagon to the incubator.

Being a largely virtual company, having access to professional conference offices gave Monebo an incalculable advantage, said Misczynski.

“The customers would come in here and say ‘Wow these guys are really legit,” he said.

Also, through ATI, Monebo was able to partner up with another business that had UT ties. Freescale, a semiconductor producer in Austin, regularly sends employees into the MBA program at McCombs School of Business and partners with the school in several other ways. As a result of crossing paths at an ATI function last year, Freescale chips are now used to run Monebo’s electrocardiogram machines, which monitor heart activity.
That would not have been possible without the incubator, Misczynski said.

There’s no such things as a free lunch

All these resources don’t come easily, though. The vetting process for companies aspiring to enter the incubator is an intensive three-step process that involves detailed pitches to investors, industry executives and ATI managers. According to the ATI Web site, fewer than 5 percent of the applicants are admitted.

“I spent months preparing for those meeting,” said Misczynski. “I knew how important getting into ATI would be to the long-term success of this company and I made sure that they couldn’t say no.”

“It’s ridiculously tough. You gotta have your [stuff] together,” said Robert Reeves, the chief technical officer for 2009 ATI graduates Phurnace Software. “There are no chumps here, that’s for sure.”

In addition to the intensive vetting process, businesses must also pay for ATI’s services. Monebo paid thousands of dollars to ATI last year and, whenever the company goes public, the incubator gets a small percentage of their stock. While those fees may sound expensive, Misczynski said it is well worth the price.

“We would not be where we are today without ATI,” he said. “I don’t regret that decision for a second.”

According to Reeves, perhaps the best testament to the value of ATI is the story of Manoj Saxena, the founder of software developer Webify.

After going toe to toe with IBM on a lucrative contract, IBM simply bought out Saxena’s business in a mult-million dollar deal. Saxena came back to ATI to start another company, Exterprise.

“Saxena had money. He could go get a plush office downtown somewhere,” said Reeves. “But he came back a second time. That shows the intrinsic value of ATI.”

Reeves acknowledge that,while ATI has been helpful, they aren’t the end-all authority for entrepreneurial success.

“There’s no guaranteed, fool-proof way to start a successful tech company,” he said. “But in this economy, you have to every tool under the sun. ATI is one of the most powerful tools out there.”

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