Calvin Goforth is the subject of this week’s Executive Q&A in Arkansas Business.
Goforth, as most INOV8 readers probably know, is a former University of Arkansas researcher and the president and founder of Virtual Incubation Co., located at the Arkansas Research & Technology Park in Fayetteville. His private firm “incubates” startup hatchlings, most of them coming out of the UA or using licensed UA tech.
Print space being limited, all of Goforth’s answers in the Exec Q&A didn’t make the final cut, including his thoughts on the role of state programs in helping foster an increasingly robust startup environment in the state. Specifically, he calls out Innovate Arkansas (insert blush here), the Arkansas Science & Technology Authority, the Arkansas Economic Development Commission, the Arkansas Development Finance Authority, Accelerate Arkansas, the Arkansas Research Alliance and the UA Technology Development Foundation.
He notes as well the contributions of private angels such as Gravity Ventures, Fund for Arkansas’ Future, Natural State Angel Association, the Alpha Fund, and even VIC ( a well deserved plug). What follows are those segments of answers that didn’t make it in the print version.
The startup ecosystem in Arkansas seems to have grown by leaps and bounds over the past five years. To what factors do you attribute that growth?
Let’s start by recognizing that the state government has invested in this effort. There are some important state programs that are having significant impact on getting funding into young companies both by direct investment and by stimulating private investment.
AEDC’s targeted business incentives, i.e., their research-and-development tax credit program and their investment tax credit programs have been critical to many of these startups. ADFA’s risk capital matching fund is a newer program but is also having a major positive effect.
ASTA’s seed-capital investment program has been in existence longer but remains important. All of these state-supported programs are investments in Arkansas’ future that are having a real impact.
Then there are many other groups, both public and private, that are having an impact. These include Accelerate Arkansas, which helped initiate many of the government programs referred to above; Innovate Arkansas, which is encouraging the startup culture across the state; the Arkansas Research Alliance, which is helping bring entrepreneurial minded scholars into our research institutions, and the UA Technology Development Foundation, which is helping ensure that technology startups in NWA have the facilities they need to grow.
Private investors and private investment funds such as the Fund for Arkansas’ Future, the Natural State Angel Association, the Alpha Fund, and Gravity Ventures have all been important. All of these groups have made important contributions to the startup culture that is emerging. I think VIC deserves some credit as well for helping lead the way on what is possible.
And finally, there are all of the individuals who have really stepped forward with their support of these efforts. There are simply too many people to list here. But we have some truly outstanding people in this state that are dedicated to the vision of seeing a thriving startup culture. I’m proud to be associated with some of them.
If Arkansas is going to pop up onto the national radar, what area represents its best chance to do so?
For example, when we opened our sister technology venture development firm Atlantic VIC in the Boston area, and described VIC’s business model and the exciting portfolio of technology companies we have developed to investors, they were very surprised that this was being done in Arkansas. With Atlantic VIC, we successfully exported an Arkansas-developed business model for technology venture development to Boston, one of the hotbeds of innovation worldwide, and have had immediate traction there.
How unique is the VIC model of privately incubating tech startups?
For example, when considering whether to license a new technology or not, VIC’s internal Opportunity Assessment Team engages in an initial competitive landscape and intellectual property review, conducts interviews with potential customers to better understand how the technology will address unmet market needs, conducts a market analysis to evaluate market structure, size and growth prospects, identifies barriers to entry, and outlines a general commercialization path.
Only when all of these initial success criteria are favorable, do we consider licensing a technology into one of our companies, or creating a whole new company around that technology. This type of process goes into all of our business development activities, at all stages of company development.
We don’t just support companies, we know what they need to be successful at various stages of development, and we proactively drive those business development processes. In the early stages of a technology company’s development, full-time, executive-level business management may not be practical or affordable.
Instead, VIC recruits industry specific experts to work closely with its executive team in an advisory capacity, and VIC provides its management services on an as-needed basis so that human resources are used efficiently and cost-effectively.
The cost of having a highly experienced team is spread across a number of companies ensuring that cash burn is minimized in all the companies. This model affords our young companies exceptional management teams that would otherwise be unaffordable. As the company matures, and products begin to emerge from the research and development phase to the commercialization phase, industry specific experienced permanent management is placed full-time into the given portfolio company.