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March 2008 This issue home | Past issues | Chamber home STARTech’s Impact Assessed STARTech, Richardson’s high-tech business incubator/accelerator, evolved from 1997 Chamber-sponsored planning retreat. The thought was that there were many fine engineers in this area, but they lacked the “safety net” which would enable them to leave their job and pursue both their idea and, in the process, their dream of business ownership and financial independence. What needed to be done, noted Tom Aschenbrenner, a successful area technology entrepreneur, was to “institutionalize entrepreneurship” in order to help offset the enormous personal risks in starting a business from scratch. What better place was there to establish a true high-tech incubator than Richardson? The city was home to over 600 technology companies, UT Dallas was coming into its own as an engineering school and the city already had a track record of producing successful start-ups, including Cyrix Semiconductor, Altsys, IEX, MicroGrafx and more. Some of Richardson’s key major employers, such as Nortel, Hewlett-Packard and Cisco planted their flags here as a result of the acquisition of home-grown start-ups like DanRay, Convex and Monterey Networks, respectively. So, in 1997, after studying a number of organizational models, the Richardson Chamber established STARTech as a for-profit entity which was designed to accelerate the development of technology start-ups and create a economic engine in the process. What made STARTech truly unique among even technology incubators was its associated “seed fund” which provided the initial equity capital infusions to turn an idea into a company. Recognizing the significant potential of an entity like STARTech to pay handsome dividends to the community and the City in the form of increased spending, job creation, enhanced property and sales taxes, in 1997 the City of Richardson passed a $3 million bond issue with 84% support to create a permanent home for STARTech. In 2001, STARTech moved into its current home in a 27,500 SF building located at 1302 E. Collins. Over the past decade, STARTech has counseled hundreds of fledgling tech companies, developed a DFW’s most extensive network of entrepreneurs, venture capitalists, university researchers and senior technology executives and made the Telecom Corridor® the recognized focal point for high-tech start-up activity in the Metroplex. STARTech’s seed fund has made 47 investments totaling nearly $30 million in private capital. Those initial fundings have generated a staggering $832 million in follow-on investments in STARTech-launched companies. Over the years, STARTech became independent of the Chamber. Nevertheless, since the Richardson Chamber founded STARTech, the Chamber Board thought it appropriate on STARTech’s 10th anniversary to take a look at the accelerator’s economic impact over the decade. For that assessment, the Chamber enlisted the services of noted economists Dr. Bud Weinstein and Dr. Terry Clower. Dr. Weinstein is an often-quoted source on economic matters in the region. He also serves as the Director for the Center of Economic Development & Research and is a professor of applied economics at the University of North Texas. Dr. Clower the Assistant Director for the Center. Drs. Weinstein and Clower retrieved original data from STARTech and then analyzed the data using a highly sophisticated IMPLAN economic input-output model as well as some conservative assumptions in breaking down county-wide data. The detailed analysis led to the 3 main conclusions: 1) Statewide from 1998 to 2007, STARTech had generated just shy of $1.5 billion in economic activity; In short, within a few years STARTech will have paid for itself and will continue to be an economic asset for the community, a tangible symbol of Richardson’s technology heritage and future and a beacon to all bright, young inventors who have an idea and a dream. Click here to view a copy of the full report. Action News is a monthly publication of the Richardson Chamber of Commerce Communications Department. Click here to Unsubscribe or email rsvp@richardsonchamber.com. |
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