Title	S.B. Technology Incubator: New group seeks to accelerate start-up success stories
Date:	7/30/2000
Author:	Rebecca Carroll
Source:	Silicon 2.0

One area incubator offers this advice to those brave souls ready to jump into the fray of dot coms: Get moving..

"Things are moving so fast in the industry, if you spend three months writing a business plan, you've lost three months of developing time," says Jason Spievak, senior vice president of investments for Santa Barbara Technology Incubator.

New technology entrepreneurs need to be free to concentrate on developing technology and markets, but they also have to spend precious time running around with their hands out looking for money. Then there are other issues, such as legal, office space and recruitment that must be dealt with.

An incubator, Spievak says, such as SBTi, will help start-ups with anywhere from $250,000 to $1 million in funding, strategic guidance from qualified business leaders, and operational and technological infrastructure.

"What we are looking for is a brief summary of the concept," Spievak says. Addressed in the summary should be the identified market need and the qualifications of the management team, he explained. "The typical applicant probably won't have a glossy brochure or prototype. We want to be the first investor in the company, outside of friends and family."

In exchange for the incubator's financial help and guidance, SBTi expects 25 percent to 30 percent seed-stage ownership of the start-up company, a comparable expectation compared to other incubators, says Spievak.

While SBTi encourages plans surrounding Internet services and software, and computer and communications software and devices, Spievak says they'll take a look at every technological possibility.

Incubators offer what "angels" and "venture capital" groups cannot.

Spievak describes an angel as more of a passive investor. An angel will write the check and then "get the heck out," Spievak explained. Venture capitalists (VCs) will sit on boards and "hang out in the living room."But incubators, such as SBTi, on the other hand, are very involved.

"We will roll-up our sleeves and help with the heavy lifting," Spievak says. "Angels and VCs are visitors, whereas we're in the kitchen helping you cook."

SBTi says it can give early-stage start-ups, or existing companies in the process of spinning off new ventures, an opportunity where all that is needed is a great idea and the desire to incubate a company in Santa Barbara.

SBTi will do the rest, says Ron Mcleod, senior vice president of business development and marketing, including providing guidance from qualified SBTi investors and strategic partners.

"We wrap a company around a concept," Mcleod explains.

The incubator's newly opened office on Santa Barbara's Nopal Street has already fielded more than 100 high-tech business plans in six weeks.

Spievak and Mcleod are part of an eight-member team-all with track records-which make up Santa Barbara's first full-service private company that selects and invests in high-tech startups.

Less than two months ago, Dennis J. Cagan, founder and CEO of Santa Barbara Technology Incubator, or SBTi, established a management team, closed Santa Barbara's largest-known first round of capital investment, and received nearly 100 high-tech business plans from entrepreneurs in six weeks.

"We have narrowed those applications down to 15," says Mcleod. "And three of those are in the very late stages of negotiation." So far, the applications have come from a variety of backgrounds. Three of the 15 are headed by women and one by a 75-year-old entrepreneur. Mcleod expects the results of those selected to be released within the month.

Spievak, previously a vice president of technology mergers and acquisitions at Broadview Associates in the Bay Area, specialized in e-commerce software and services, network infrastructure and consumer web services transactions.

Mcleod, previously the managing director of capital markets, global sales and investment banking for the NASDAQ stock market, is an internationally recognized advisor to merging companies and an active entrepreneur within the financial community.

SBTi continues to accept new applications daily. The team is looking for the best high-tech ventures they can find for their investors, say Spievak and Mcleod, which include Compaq Computer Corporation, IdeaWork Studios, Montecito Bank and Trust, Nida and Maloney, LLP, Santa Barbara Bank and Trust, Silicon Valley Bank, and Sand Hill Capital.

Milt Honea, a retiree who moved to Santa Barbara two-and-a-half years ago, was one of the first investors to join SBTi. Honea, also an investor and co-chairman of Sputtered Films in Santa Barbara, was swayed to join the team after seeing the founder's enthusiasm. Honea says he trusted Cagan had the know-how, the contacts and drive to put together a successful venture. And "so far, so good," he says. Honea said he had been interested in incubators prior to hearing of Cagan's idea. He found Cagan's incubator unique compared to others he has seen in the past.

"We not only provide seed capital and help arrange venture capital in later rounds, but we mentor, nurture and unburden the start-up from routine business problems so they can devote full-time to their core function," says Honea.

"We intend that one of our experienced senior management persons adopt each "incubat." "In this regard, Santa Barbara has a wealth of retired CEOs and people who started and then ran their own companies. There is so much untapped potential in this category in Santa Barbara that I believe it is a sin to have so much underutilized talent. And our incubator has the potential to unleash it."

Now all you have to do is get moving.