High-Tech Companies to Rattle Region

Two major technology industry announcements with potentially mondo local ramifications are expected Dec. 21 at an open house for Beta-Rubicon LLC of Fayetteville.

A technology due-diligence firm, Beta-Rubicon filed on Nov. 28 for incorporation with the Arkansas secretary of state’s office in preparation for a national rollout planned to occur within the next 18 months.

General Manager Ron Goforth said the conversion from a limited-liability company to a corporate structure was a necessity created by both the sophomore company’s success and ambition.

Beta-Rubicon, which conducts technology and financial assessments for companies with developing technologies, initially hoped to complete six or seven contracts in 1999. In just two years, it has fulfilled 18, including eight with Arkansas firms. The contracts have ranged from $2,400 for a single “survey-level” assessment to more than $75,000 for a three-month job.

Beta-Rubicon’s national expansion will include two prototype sites scheduled for completion in 2001. Those will most likely land in high-tech hotbeds like Austin, Texas, or North Carolina’s “Golden Triangle” and will be used as test sites for expansion to eight additional locations to ensure national coverage.

The move also lays the groundwork for a public offering, which Goforth said was a possibility in the next few years. The announcement is significant for Northwest Arkansas, since the potentially lucrative expansion will remain based in Fayetteville.

The official conversion Dec. 31 will change the company’s name to Beta-Rubicon Inc.

The Northwest Arkansas Business Journal has also learned that an independent company, Virtual Incubator Corp. (VIC) of Fayetteville, will be presented by a group of executives at the open house. VIC is an “out-of-the-box” concept for a new kind of high-technology incubator — an Internet-facilitated “incubator without walls.”

Traditionally, high-tech incubators like the University of Arkansas’ Genesis Technology Incubator in Fayetteville have offered start-ups low-cost physical space for laboratory and office work. They enable infant companies to develop and perfect new technologies while pursuing major capitalization.

Virtual Incubator will foster the development of high-tech start-ups by providing an online army of essential support personnel. Virtual Incubator doesn’t have a corporate relationship with Beta-Rubicon, although Goforth is the founder of both and sits on both boards. He said VIC would serve as a complement, not a competitor, to Genesis.

“Instead of renting space, VIC will provide essential services for a fee,” Goforth said. “This is not a consultant dating service. We will accumulate, consolidate and facilitate information from professionals with real-world business experience to our clients.”

Fees will be determined case by case, depending on clients’ needs, Goforth said. He said Virtual Incubator would use all telecommunication tools available to make resources available to client companies, regardless of where they are.

Goforth said Virtual Incubator’s initial capitalization included both a “personal investment” and sweat equity invested by its major players. No further funding information was available. Further developments are expected soon.

Revenue projections do not include a large value for the company for several years, since it will take time for the incubator’s clients to mature. But VIC, incorporated May 4, already has six clients, and eight more have been identified as interested prospects.

Goforth said the types of “essential services” offered over the Internet by VIC would include assistance with research and development, protection of intellectual property, accounting issues, establishment of marketing and sales plans, and even facilitation of connections to potential capital investors.

“The goal is to have the best people and resources available at the least amount of cost,” Goforth said. “VIC’s potential is tied to the success of its client companies. The clients will share a strong mutual interest in that success, and, from there, the financial benefits will flow back to both the company and the community.”

The idea for Virtual Incubator came about when several Beta-Rubicon clients decided they needed assistance to become commercially successful.

Beta-Rubicon has also been active in Tennessee, Louisiana and Ohio. Goforth said he hoped the firm’s rollout could be self-supporting within 12 months.