ATDC at 25: Looking Back with Satisfaction

Remember that KFC commercial from years ago — “KFC is doing one thing and doing this one thing right”? Georgia Tech is doing more than one thing right (we still remember that Yellow Jackets team of the 1995-96 season, with Stephon Marbury, Matt Harpring, and Drew Barry), and one of them is its technology incubator. In 1981 the Atlanta, Georgia-based Georgia Tech established a science and technology incubator, the Advanced Technology Development Center (ATDC). The incubator began graduating companies in 1983. Since 1999, companies associated with ATDC have raised more than a billion dollars in venture capital, and in 2006 accounted for 10 of the top 25 venture deals in Georgia, including the two largest. In all, ATDC has turned out 112 science and technology companies since 1986 — including 31 which have been represented on the public markets through IPOs or acquisitions.

The latest to graduate are six early-stage firms — three Internet companies, two semiconductor firms, and a developer of homeland security technology. Together, these six early-stage firms raised more than $50 million while still in the incubator.

The investment community has taken note. “ATDC is a source of exciting deal flow, and we have invested in many ATDC companies,” says Fred Sturgis, managing director of Miami-based venture capital firm H.I.G. Ventures, a $4 billion fund. “ATDC attracts leading entrepreneurs in Georgia and increases the probability of success for its companies.”

According to ATDC, the billion dollars raised by the companies associated with it included 160 deals in 75 companies from 138 venture investors. The average deal size was $6.7 million. Funding amounts varied, of course, with 32 companies raising less than $5 million and 10 companies raising more than $25 million. More than 90 of the 160 deals involved investors from outside Georgia.

ATDC companies accounted for one of every five venture capital deals done in Georgia during the last eight years, and 15 percent of the total dollars raised in the state. The one billion includes funds raised by companies throughout their growth, including their time in the incubator and after they graduated. The amount does not include the value of mergers and acquisitions, which would add about $830 million in shareholder value.

In 2005, ATDC companies, including both graduates and current members, generated $1.7 billion in revenues and provided 4,326 jobs.