Tech +: One Thing Leads to Another
cott Fulton moved to Madison in 2001 from Boston and soon had an idea that led to founding BioSystem Development, which recently closed an investment round that raised over $1.4 million in funding and capital equipment. “From the beginning I felt Madison was a great environment to be doing this in,” he says.
His company has created a system that pharmaceutical and biotech companies can use in the development of new drugs. It speeds certain lab analyses from as much as a daylong to a thirty-minute process, typically. The resources he found in the Madison area enabled Fulton, as he says, “to get out of my basement and into the lab.”
He found a vibrant group of biotech companies, some that were spinoffs of other businesses, some launched from UW-generated technology, others that evolved to support existing biotech concerns and some that moved here when they acquired local start-up companies.
Fulton also found a network of support: gatherings like High Tech Happy Hour, associations like BioForward, organizations like the Wisconsin Technology Council and its Governor’s Business Plan Contest for entrepreneurs (which BioSystems Development won in 2004), Governor Doyle’s Act 255 tax credits for investors in emerging companies, the Wisconsin Entrepreneurs’ Network, the Wisconsin Angel Network and of course UW–Madison and WARF. “And the ancillary resources available here are second to none,” he says. “There are patent attorneys, accounting firms and business consultants that know how to deal with these kinds of companies. I’ve found world-class providers here, which isn’t true of every small city.”
It’s called cluster development, indicates Tom Still, Tech Council president. He uses the California wine industry as an analogy. If farmers grow grapes and vintners make wine, bottling companies will spring up, along with companies that make labels for the bottles, those that box the bottles, shippers, distributors …
The biotech cluster is particularly strong here. “I think the best single example in Madison is probably Promega, which is the progenitor for a number of companies and suppliers,” says Still. In a 1992 instance, then CFO Ralph Kauten left Promega to found PanVera (now Invitrogen), then helped found Mirus Corporation and is now CEO and chairman of Quintessence Biosciences.
It’s a case where success begets success, says John Neis, managing director of Venture Investors. As an industry cluster develops in a city, the resulting infrastructure makes it easier, relatively speaking, for new start-ups to succeed. “All the growth and experience in the community makes advice available from people who’ve been through building a successful company. “It’s a plus from the investor standpoint,” he continues. “Twenty years ago venture capital firms from the coasts had many questions about whether Madison had the infrastructure to build a company here. Without that, there’s a certain reticence to doing deals here. With success stories, that diminishes.”
Cluster development is an important element in recruiting as well. “When you’re trying to attract qualified people to new companies here, they know that early-stage, high-risk businesses often don’t succeed,” says Neis. “They ask, ‘If I uproot my family and move there, what are the chances I’ll find another opportunity if there’s a need to move on?'”
With Madison’s rich biotech culture, that’s becoming an easy question to answer.