BYLINE: Tamarind Phinisee
The Texas Research and Technology Foundation (TRTF) is moving forward with plans to establish a business accelerator (or incubator) facility to house start-up bioscience companies.
York Duncan, executive director for the TRTF, says the incubator will be located inside the University of Texas Health Science Center at San Antonio's new South Texas Research Facility.
"They have agreed to gives us space in their 200,000-square-foot campus ... for the business accelerator," Duncan says.
The incubator will occupy between 10,000 and 15,000 square feet in the new building and is expected to house anywhere from 10 to 14 start-up companies and offer services like clean rooms, legal and consulting services as well as office space.
The incubator will be available for use by entities such as the Health Science Center, the Cancer Therapy and Research Center and the Southwest Foundation for Biomedical Research.
"We think it's a great fit for us," says TRTF Chairman Jim Dublin.
Construction on the new Health Science Center facility is slated to begin sometime in early 2008, says Brian Herman, vice president for research and professor of cellular and structural biology at the Health Science Center, with plans to have the facility completed by the end of 2010.
"We are hopeful that the presence of the incubator will accelerate the commercialization of the new knowledge generated not only by our faculty, but also from ... other partner institutions, that at the end of the day will allow more efficient delivery of these technologies to society as a whole," Herman says.
Funding
In the meantime, Duncan says the TRTF is concentrating on developing its pre-seed and early-stage seed capital funds. Both funds will provide gap financing for biotech companies that primarily come out of area academic institutions or the bioscience sector. The funds also will target some private-sector technology ventures.
Late last year, Duncan told the Business Journal of the TRTF's plans to create the two funds by pumping $2 million of its own money -- $1 million into each fund -- to prompt local private/angel investors to follow suit.
The plan at that time was to raise another $2 million for the pre-seed fund and an additional $9 million for the seed fund. The funds would be aimed at providing capital support for innovative technologies that have the potential to be commercialized.
To date, both funds have been created and funded by TRTF at the $1 million level. However, more work needs to be done, according to Duncan.
"We do want to raise additional capital for the ... (pre-seed) fund. We need to have enough available to sustain the fund -- around $3 million total," Duncan says.
Dublin adds this additional funding could come from other government entities and private sources.
In addition to the $1 million supplied by the TRTF for the pre-seed fund, the city has pitched in another $100,000. The city's one-time grant, Duncan says, will aid the TRTF in applying for nonprofit tax-exempt status with the IRS.
"Our plan is to create a new nonprofit for the pre-seed fund and the incubator/accelerator facility," Duncan says.
The fund has been named the McDermott Pre-Seed Fund in honor of General Robert McDermott, who was the founding chairman of TRTF and was a major supporter of TRTF and the Research Park.
Seed fund
As for the seed fund, J. Bruce Bugg Jr., TRTF board member and chairman of its Tech Enterprise Committee, says the organization has completed the planning process for the fund and is using attorneys with Fulbright & Jaworski to prepare all the investment organization documents.
The Tech Enterprise Committee oversees the pre-seed and seed funds as well as the incubator project.
Meanwhile, Bugg says, the board is in the process of selecting a manager for the seed fund. Until one is selected, he says the board has decided "not to go out and raise any (additional) funds from members of the general public."
"We think the critical factor in terms of TRTF being the impetus behind the seed fund is that we want to make sure that we're comfortable with the manager," Bugg says.
The timeline for moving forward with raising additional money for the seed fund, he says, will be affected by the board's ability to attract and retain a manager.
"We think the capital will come to the fund if we have the right manager with a proven track record. We are in advanced discussions with a potential manager at this time," Bugg says.
Texas Research and Technology Foundation
What: New biosciences business incubator Where: University of Texas Health Science Center at San Antonio's new South Texas Research Facility Location: Floyd Curl Drive and Wurzbach Road in the South Texas Medical Center Size: Will house 10 to 14 start-up companies in a 10,000- to 15,000-square-foot space Purpose: Will feature clean rooms, provide legal and consulting services as well as office space