News Article

Madison's success in turning technology into business lures conference
Date: Mar 23, 2011
Source: bizjournal

Featured firm in this article: Silatronix Inc of Madison, WI

A chemical compound being developed by Silatronix, a young Madison company, could make big batteries used for backup power systems last longer and keep them stable in the desert heat.

The company has found a new type of organosilicon electrolyte — a chemical fluid in the middle of a lithium ion battery. The Navy is interested in the technology. Telecommunications companies whose fiber-optic equipment boxes have blown up in the heat could also benefit, said Mark Zager, Silatronix chief executive officer.

But that sort of research and testing is not cheap.

That's where federal grant programs come in, particularly Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs.

In April, a national SBIR/STTR conference will be held at Monona Terrace. In addition to workshops with experts on science, technology and market opportunities, representatives of nearly a dozen federal agencies that provide the grants will hold one-on-one meetings with entrepreneurs, said Gayle Kugler, director of the UW-Extension's Wisconsin Entrepreneurs Network and the Small Business Development Centers network. They will also have a chance to tour the UW's new Institutes for Discovery and Morgridge Institute for Research.

At least five other cities competed to host the event, which could bring up to 850 people here, Kugler said.

Madison was chosen, in part, for its success turning technology ideas into businesses, said Tom Still, president of the Wisconsin Technology Council.

Between September 2003 and March 2010, 134 Wisconsin companies got SBIR funds totaling $190 million. Eighty-nine of those companies — or two-thirds — were in Dane County.

SBIR and STTR grants are not just for research; they are aimed at companies with "technology that promises to become commercial at some point," Still said. "I think they have provided a strong underpinning to many of the companies in the tech sector that we're familiar with today."

Virent Energy Systems is one. The Madison company is working with Shell Oil on a new kind of biofuel.

"The first outside funding for Virent was a $100,000 Department of Energy SBIR grant (in 2003) that funded initial research and development activities, as well as purchase of needed equipment for our labs," said co-founder and chief technology officer Randy Cortright. Since then, the company has raised $124 million in grants, investor funds and industrial partnerships.

Stratatech, a Madison company developing skin substitutes for wound healing, has received more than $14 million in SBIR and STTR grants from the National Institutes of Health alone. "As the development of our novel therapeutic offerings has progressed, SBIR-STTR grants have provided critical support for the translation of these products into the clinic," said founder and chief executive Lynn Allen-Hoffman.

For Silatronix, a series of SBIR grants from the National Science Foundation and the U.S. Navy were crucial for the company, Zager said. The U.S. Department of Energy has provided funding to "much larger, established battery companies ... not to small, unknown companies like Silatronix," he said.

SBIR grants to Silatronix now top $1.75 million. They have supplemented the $1 million invested by the Wisconsin Alumni Research Foundation and Venture Investors, Madison, said John Neis, a managing director of Venture Investors.

"We're a relatively small fund," Neis said. "Absent the grant dollars, it's not the type of deal we'd be able to do."

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