Resources Bloom for Local Startups

The recent convergence of resources for startup and young companies in Northwest Arkansas presents a tremendous opportunity for firms or inventors who are in a position to take advantage of them. Fayetteville’s technology due-diligence leader Beta Rubicon Inc. and business strategy planner and implementer Virtual Incubation Corp. in recent years brought resources to bear on this delicate sector.

The research and lab ambiance of the UA and its Genesis Technology Incubator were already in place. Then finally, said VIC President Calvin Goforth, recent interest from venture capital companies and the Jan. 24 addition of The Alpha Fund really put things in motion.

The Alpha Fund is a $2 million-$5 million seed-stage funding mechanism for fledgling companies created by Fayetteville investment bankers David Lewis and John Nock. Venture capital companies such as Arkansas Ventures, Diamond State Ventures and Signal Hill Partners have all recently opened offices in Northwest Arkansas.

In particular, The Alpha Fund’s investments are intended to leverage the companies’ acquisition of federal research and development dollars from sources such as the Small Business Innovation Research (SBIR) program.

That’s especially important because according to a recent report by Ron Foster, a UA research professor and director of the UA Graduate School’s Innovation Incubator, Arkansas received eight Phase I SBIR grants out of 22 applications in 2001. That’s a 36 percent success rate, compared to a 16 percent rate nationally.

But, the state’s number of applications per capita (per 100,000 businesses) was 1.22, or well below the 6.7 national median set by Maine.

That’s why Foster said, Northwest Arkansas’ growing synergy for startups offers a unique chance to achieve commercialization.