Four years ago, Austin entrepreneur Michael Garel had an idea for technology that would help traditional retailers compete with online sites.
"The idea was all I had," Garel said. "I had no product, no team and no funding."
But he pitched the concept at a Texas Venture Labs Investment Competition, and won. Among the prizes: Being admitted into the Austin Technology Incubator.
"I moved into ATI, and that's where it became a real business," Garel said. "We were able to leverage the experiences of others who had been there before. They helped us take an idea from a business plan to reality."
In May, Garel's company EyeQ, which sells in-store digital displays, raised $3.5 million for expansion. The company's customers include Ford Motor Co. and OtterBox, and it is growing its nine-person team.
EyeQ is one of 19 Austin companies that will graduate on Wednesday from ATI, which is affiliated with the University of Texas and the IC2 Institute think tank.
Since its founding in 1989 by famed business leader George Kozmetsky, the incubator has graduated more than 200 companies, helping them raise more than $1.6 billion in investment capital.
The current graduating class has raised $223 million to date, and has had one initial public offering - Aeglea Biotherapeutics. In addition, two companies, Lynx Labs and Ridescout, have been acquired.
The incubator, which is headquartered at WeWork University Park and has offices in the West Pickle Research building on North Braker Lane, focuses on four areas - information technology, wireless, clean energy and bioscience. It has also branched into water-based technology and cybersecurity.
ATI typically works with 20 to 30 companies at a time. About half the companies have offices at ATI, and the other half lease their own space off-site.
As Austin's tech startup community has evolved, so have ATI's services. The incubator originally helped companies by providing the basics such as affordable office space. Now it focuses on bigger challenges, such as strategic business planning.
"The incubation services we supply are much more virtual," said Isaac Barchas, ATI's executive director. "We spend a lot of time with business strategy issues. We work with them on business models, and building their teams and raising money."
ATI companies typically are part of the incubator for two or three years, and graduate when they meet milestones allowing them to operate independently, such a signing paying customers.
The incubator accepts new members on a rolling basis and has about a 7 percent acceptance rate, Barchas said. About half of the participating companies are affiliated with UT, either through its founders or their technology.
Aeglea, which raised $72 million in an IPO in March, is an example of how it works. The company was founded in December 2013 by UT professor George Georgiou and local venture capitalist David Lowe - who is now the company's CEO - to commercialize therapies developed by Georgiou.
The company, which develops drug therapies to fight cancer, entered a licensing agreement with UT in 2013 that could reap millions of dollars for the university if Aeglea receives regulatory approval for its treatments, which are currently in the clinical phase.
Barchas said Aeglea is part of a wave of new biomedical sciences startups that are deciding to stay in Austin after licensing UT intellectual property.
"Five years ago, this company would have left Austin because we didn't have the life sciences infrastructure," Barchas said. "Today, with the medical school, it really feels like we're gaining critical mass in health sciences. Agelea's IPO is proof of that. It's a huge win for Austin."
ATI's graduating companies:
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