“We’ve never passed on working with a Texas Moot Corp winner, they are terrific companies.”
The new venture news last October in this corner of the world was the acquisition of eVapt by India-based billing software company, MagnaQuest Technologies. The discovery of a successful exit strategy in this perilous economy was encouraging news for any entrepreneur, and especially sweet for the venture program at The University of Texas at Austin. Just ask Rob Adams, director of Moot Corp, who is a walking bundle of enthusiasm these days thanks to eVapt and several other funding success stories on the horizon.
eVapt was founded in 2006 by two students at the McCombs School, Divakar Jandhyala and Ranjit Nayak, formerly of BMC and IBM, who went through the Texas Evening MBA program, forged their idea into a company in the furnace of Texas Moot Corp, and later refined it within the robust environment hosted by the Austin Technology Incubator (ATI). Nayak speaks fondly of Moot Corp and ATI in this panel discussion, and that endorsement is echoed by other entrepreneurs who have spoken at startup events here recently.
The New Venture Engine at UT Austin
Isaac Barchas, director of The Austin Technology Incubator and associate director of its parent, the IC2 Institute at The University of Texas at Austin says the incubator has worked with 24 companies that have raised $28 million in investor capital in fiscal year ’07-’08. While the financial pressures of the following year slowed investment to $10 million, ATI worked with 28 companies and accounted for half of the Texas Emerging Technology Fund’s investments.
Barchas believes the incubator plays a role far beyond the economic impact, as a facilitator of interaction between university disciplines. “ATI allows students from the business school to work with students from engineering, pharmacy and even the law school,” he says. “It’s a bit of a mixing bowl for entrepreneurship at the university, and Moot Corp does the same thing. Some of the most exciting business opportunities come from this type of cross boundary interaction.”
The incubator works with early stage technology companies, both those that are based on university developed technologies, and those that are not. ATI has a roster of experienced consultants, technologists, entrepreneurs and sales people who act as a special services team for hosted companies. “We help to refine the business plan, tear up the business plan and rewrite it, assist with market analysis and put our own networks at the disposal of entrepreneurs who are younger and don’t have that kind of connectivity,” he explains.
In addition, scores of university students intern at ATI or work with ATI member companies as part of their coursework. “We work with students from across the university, from the business school, engineering, natural sciences, public policy, liberal arts and the law school,” Barchas states. He compares ATI to an applied laboratory for students, giving them the chance to get their hands wet in entrepreneurship.
A Natural Partnership with Texas Moot Corp
The Moot Corp new venture startup competition has a Texas edition, followed by Global Moot Corp, both sponsored by McCombs School of Business. Over the years many other schools have jumped in with similar competitions, many with larger cash prizes. Even so, the Texas Moot Corp competition remains the most highly prized of them all. The reason? Texas Moot Corp launches companies that actually succeed in the real world, with an inside edge on acceptance into the Austin Technology Incubator.
Adams proudly points to a string of successful company launches all traced to the Texas Moot Corp competition, and he credits ATI with a major role in that record.
“ATI is the ideal acceleration environment for newly funded companies,” he says. “You’ve got two major challenges as a startup, gaining customer traction and getting your operations up and running. Startups need to focus on customer traction, and let ATI guide you on legal issues, accounting and IT. That’s a luxury most young companies don’t have.”
Texas Moot Corp winners get a boost into the incubator. “Moot Corp winners have already gone through a rigorous selection process,” Barchas explains. “All we ask is they come in and present to our directors, and if they pass we automatically admit them into ATI. We’ve never passed on working with a Texas Moot Corp winner, they are terrific companies. Big Foot Networks, Qcue, eVapt, all have come through Moot Corp.”
A Three-Year Snapshot of the Future
Companies have approximately three years within the incubator, but it varies by company and industry sector. Barry Kahn, one of the founders of Qcue, says the incubator is an environment where entrepreneurs can learn by observing. “The eVapt acquisition is a great example,” he said recently after participating in a panel at the SEMA conference. “You watch someone go through that and it gives you a sense of the dynamics. It’s great to look at companies that are one, two or three years further down the line, both their successes and their challenges. It’s a bit of a snapshot of the future. That’s where we hope to be someday.”