Title	Biz Incubator Ready to Roll
Date:	3/17/2000
Author:	Laura Polland
Source:	Pacific Coast Business Times

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Dennis Cagan would probably not take kindly to being called a mother hen. The 54-year-old former Marine has more than 30 years experience in the high tech industry and has created or served on the boards of more than 25 companies, including Wavefront Technologies, Software.com, and, currently, Acorn Technologies.

But Cagan has given in to his nesting instinct and come home to roost. This month he will open Santa Barbara Technology Incubator.

But don't think that hatching companies is just a lot of sitting around. Although incubators create a safe environment for fledgling businesses to grow during those early "ugly duckling" periods, this is still the duck-eat-duck world of business.

Financing the companies is this incubator's primary goal. "We will identify the best companies, get them the first round of venture financing of the highest valuation, as soon as possible - with the best investors possible," said Cagan, the incubator's CEO and chairman.

Approximately 30 investor-mentors, primarily retired executives and entrepreneurs, will work closely with the tenant companies. Standard incubator services, such as marketing, computers and reception will be included.

The incubator is 12,000 square feet divided between two buildings on Nopal Street in Santa Barbara. The buildings include a clean room as well as conference rooms, offices and open spaces.

The Santa Barbara Technology Incubator will operate for profit, taking a 25- to 50-percent equity share of its tenants' profits. Cagan expects 10 tenants initially, and eventually up to 20. The estimated stay will be one year.

Many incubators allow tenants to stay for two or three years, but technology incubators, particularly those dedicated primarily to Internet companies, work on a shorter timeline because speed is a key factor in those endeavors.

Today there are close to 600 business incubators in America. They are catching on as an effective way to ensure the survival of small companies, and the hottest incubators today are Internet and technology based. Models like idealab!, the premier producer of Internet start-ups, are quickly turning out companies to fill niches in the still-new Internet marketplace.

"There are several hundred high-tech companies in Santa Barbara already. I think technology will overtake tourism and UCSB as our largest economic sector. It may not be responsible for the largest inflow of people, but it will represent the largest inflow of capital," said Cagan.

Cagan is currently finalizing the incubator's funding. The incubator is expected to open before April, at which time he hopes to have financed two companies, ranging from $500,000 to $1 million. At that time the website will be set up and interested companies can find information on what the incubator is looking for and how to submit business plans.

The Center for Entrepreneurship and Engineering Management at UCSB's College of Engineering will also be a portal to the incubator, passing along business plans from both instructors and students.

Cagan decided to open his incubator because "it's what I do anyway, just never in a formal structure before," he said. A tentative board of directors includes: Bob Dorf, CEO of Peppers & Rogers Group; Trevor Fetter, President and CFO of Tenet Healthcare Corp,; Milt Honea, the chair of Sputtered Films; attorney David Johnson; and Joe Nida of Nida & Maloney.