Center for Innovation Februrary 2011 Newsletter

Grand Forks, North Dakota

February 2011

M ERIDIAN S TRATEGICALLY A LIGNS WITH I TERIS FOR $6 M ILLION

Meridian Environmental Technology, Inc. (MET) recently announced the signing of a stock purchase agreement for the company to be acquired by Iteris, Inc. The agreement provides for Iteris to purchase MET’s outstanding capital stock for approximately $4 million in cash plus up to $2 million more based on the company’s performance over the next two years.

MET was founded by Leon and Kathy Osborne in 1996 and started operations in 1998. Leon Osborne, a UND atmospheric sciences professor since 1979 and

current director of the Regional Weather Information Center and the Surface Transportation Weather Research Center at UND, serves as the president and CEO. Kathy Osborne, a former data processing manager at Community National Bank, serves as the general manager and COO. The Osbornes started MET in their home and grew the company in the Center for Innovation’s Skalicky Tech Incubator, then called the Rural Technology Center.

Since graduating from the incubator, MET has continued to operate and flourish in Grand Forks.

MET focuses on utilizing cutting-edge computer technology, scientific research, traveler information analysis, weather analysis and forecasting systems to increase the productivity and decision -making capabilities of its customers primarily in the transportation industry. An internally developed system, named #SAFETM, is used as the model for the 511 National Guidelines, and currently delivers customized route-sp ecif ic surfa ce weather and road condition reports statewide across several states.

Iteris, headquartered in Santa Ana, Calif., is a leader in the traffic management market. By combining expertise in hardware and software engineering, image processing, and traffic management, Iteris develops sophisticated systems that reduce travel time, reduce congestion, enhance transit operations, provide safer

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Inside this issue: ICON’ S N EW B UILDING

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C ENTER W ELCOMES S IMLAT , L TD .

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S OFT L ANDINGS D ESIGNATION

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C ENTER P ROGRAM U PDATES

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I NNOVATE ND

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APUC G RANT A WARDED

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Ina Mae Rude Entrepreneur Center Skalicky Tech Incubator 4200 James Ray Drive Grand Forks, ND 58203 Phone: 701-777-3132 Email: newsletter@innovators.net Web: www.innovators.net

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ICON Architectural Group is preparing to expand and relocate from the Ina Mae Rude Entrepreneur Center to a newly constructed professional services building located opposite the Alerus Center and CanadInn on 42nd Street.

Completion of the four-story, 58,700 sq. ft. building is targeted for June 1, 2011.

ICON will expand from the Center for Innovation’s business incubator program in May. Sixteen full-time employees will move to the first floor of the new building with additional office space available for off-site employees to work.

Advanced Engineering and Environmental Services (AE2S) will oc-

N EXT B IG M OVE cupy the second and third floors.

In addition to its distinctive style, special features of the new building include underground parking, modular furniture and walls to allow for future growth and redesign, and sustainable or “green” design. The building’s green features – geothermal heating and cooling, improved indoor environmental quality through use of low volatile organic compounds (VOCs), on-site renewable energy, and water efficient landscaping – will qualify the new building for Leadership in Energy and Environmental Design (LEED) Platinum Certification. The building is designed to be the first platinum

level certified building in the state. LEED is an internationally recognized green building certification system.

Other architectural projects completed

by ICON include: Ina Mae Rude Entrepreneur Center, Hilton Garden Inn, Betty Engelstad Sioux Center and Grand Forks County Correctional Center.

Current projects include: Los Angeles Angels of Anaheim Stadium Renovation, Richmond International Raceway Scoring Pylon, and Sweetwater Elementary in Devils Lake.

Visit www.iconarchitects.com to learn more about ICON Architectural Group.

“Thanks to the Center for Innovation for providing the facility and guidance which allowed ICON Architectural Group to grow and develop into the nationally recognized company that it has become.”

ICON Architectural Group

Above, left to right: AE2S President Charles Vein, AE2S CEO Steve Burian, Mayor Michael Brown, ICON Principal Mike Kuntz and ICON President Todd Mitzel celebrate the official groundbreaking for the new corporate building in May 2010.

Right: Architectural rendering of ICON’s new building.

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S IMLAT , I NTERNATIONAL UAS C OMPANY North Dakota took its place on the world map of the unmanned aircraft systems (UAS) industry with the opening of a new North American Simlat office in the Ina Mae Rude Entrepreneur Center. The Center for Innovation announced Simlat’s North American expansion to its business incubator with an official ribbon cutting ceremony on December 2, 2010.

Simlat Ltd., an Israeli-based company, is a leading provider of next generation mission-training solutions for the UAS and the intelligence, surveillance and reconnaissance (ISR) industries. Based on extensive hands-on operational experience, Simlat offers training for every UAS platform, payload and mission.

Representatives of the Center for Innovation and the North Dakota Department of Commerce welcomed Simlat’s president, Yuval Peshin, to his company’s new U.S. home. Peshin explained Simlat’s motivation for locating in Grand Forks. “With an operation base in North Dakota,” he said, “we expect to continue our growth in the U.S. and further expand our abilities to provide outstanding products and support for this market. I believe the Center for Innovation in North Dakota, with its strong emphasis and foresight into the UAS market, will provide the perfect environment for Simlat’s new office and future R&D programs.”

With a comprehensive offering of business services for international ventures

Simlat President Yuval Peshin, second from left, ceremoniously opens his company’s new North American office in the Ina Mae Rude Entrepreneur Center. Also participating in the ribbon cutting, from left to right, are Center for Innovation Entrepreneur Coach and Director Bruce Gjovig, Center for Innovation Rainmaker and Vice President of Development Tom Kenville, and North Dakota Department of Commerce Economic Development and Finance Division Director Paul Lucy.

and demonstrated success at helping nondomestic companies enter the U.S. market, the Center for Innovation has been designated as a “Soft Landings International Incubator” by the National Business Incubation Association (NBIA) since 2006. The NBIA soft landings designation, held by just 19 incubators out of 5,000 worldwide, identifies the Center for Innovation as friendly to international ventures, like Simlat. Tom Kenville, rainmaker and vice president of development for the Center for Innovation, described the center’s support role for Simlat and other international companies. “Simlat, a rising name in the UAS subsystems industry, is a highly welcomed addition to the Center for Innovation. As a leading entrepreneur outreach center,” he said, “we

will provide Simlat with extensive support, knowledge and resources that are bound to contribute to its success in this demanding and dynamic market.”

Simlat serves customers in Australia, Canada, Europe, India and the U.S. The company expects to hire five employees for its new office in the Ina Mae Rude Entrepreneur Center.

Simlat joins other UAS industry-related companies at the Center for Innovation including Field of View, Northrop Grumman, Ulteig and the Unmanned Applications Institute International.

The Center for Innovation is becoming a hub for UAS commercialization activities according to Entrepreneur Coach and Director Bruce Gjovig.

Visit Simlat’s company website at www.simlat.com to learn more about its operations.

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T HIRD I NTERNATIONAL H ONOR The Center for Innovation’s two business and technology incubators have together been designated as a “Soft Landings International Incubator” by the National Business Incubation Association (NBIA) for the third time. The initial designation was awarded in 2006 with two-year renewals granted in 2008 and 2010.

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search, and export entry strategies.”

The Center for Innovation was one of the first five incubators in the world to secure the Soft Landings designation in 2006, and today there are just 19 incubators out of 5,000 worldwide with that designation and certification. The other Soft Landings incubators are located in such places as Australia, England, Finland, France, Hong Kong, Netherlands, Boston, Detroit and San Jose.

International entrepreneurs are continuously expanding into global markets.

These firms become a valuable part of the entrepreneur community that bring in business, adding to increases in revenue, taxes, jobs, wealth, prestige and more. Soft Landings incubators help international entrepreneurs get a good start in a new market, accelerate their growth, and take some risk and hassle out of expansion. The NBIA Soft Landings designation lets foreign firms know that the world's leading organization advancing business incubation and entrepreneurship, NBIA, has identified these incubators as having specialized programs and facilities for helping ventures break into new markets.

The NBIA designation identifies incubators that provide a “soft landing” to international firms wishing to expand into new markets. The Center for Innovation has been assisting international clients since 1992 with the majority of its international clients coming from Norway, Canada and China. Through its Soft Landings program, NBIA recognizes business incubation programs that are especially capable of helping nondomestic companies enter the domestic market.

Center for Innovation Entrepreneur Coach and Director Bruce Gjovig said, “This designation lets international entrepreneurs know about our venturing expertise and our ability to provide a ‘soft landing’. We have a proven track record of working with international clients and can offer that expertise as companies enter the U.S. market. This designation not only recognizes our expertise, but also sends a welcoming message to international entrepreneurs looking to call North Dakota home.”

The Center for Innovation was selected for the program because of its slate of business services for nondomestic firms and its demonstrated success at helping these firms enter the U.S. market, according to Randy Morris, NBIA director of member services. Morris added, "The Soft Landings designation recognizes outstanding incubators that are capable of helping international firms enter into new domestic markets with entrepreneur services, help cut through governmental red tape, and provide demonstrated success in helping provide access to capital, domestic market re-

Gjovig explains that one important benefit to international companies that locate in an incubator is the ability to grow into a presence on U.S. soil without having to go through many of the capital-intensive acquisitions involved in opening a new location. The incubator offers turn-key office, server, communications and lab space for early stage ventures as well as entrepreneur assistance and the opportunity to be part of an entrepreneur community.

Some clients also find that the Center’s affiliation with the University of North Dakota provides easy access to entrepre-

neur-minded students who are looking for internships, projects and employment. For many years the center has secured funding from the Norwegian and Canadian Consulates for students to work with entrepreneurs from those countries looking to expand into the U.S. market or find strategic partners in the U.S. Gjovig says he is honored and humbled that the Center for Innovation is among such a small number of incubators to receive the designation worldwide.

Gjovig said NBIA reports there are more than 5,000 business incubators worldwide and about 900 in the U.S., up from just 12 in 1980. Gjovig says, “It is good to be on the leading edge in globalizing incubator operations as more tech entrepreneurs find they need to enter international markets to capitalize on their opportunities.”

Gjovig says business incubators in several other countries including Canada, China, Mexico, Norway, Poland and Sweden have sent delegations to visit the campus incubators. The center has also done several seminars and webinars for NBIA members worldwide on how to prepare and secure the designation.

Contact Rodrigo Cintra at (701) 777 -3970 or rodrigo@innovators.net for more information about the Center for Innovation’s business services for nondomestic ventures.

Visit www.nbia.org to learn more about the NBIA and its Soft Landings program.

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E NTREPRENEURIAL T ECH C OMMERCIALIZATION Four entrepreneur-minded students from the University of North Dakota will put their entrepreneur-minded education to work bringing cutting edge inventions and breakthroughs to the market as interns for the Entrepreneurial Tech Commercialization Program.

Sam Hager, UND Entrepreneurship Program; Kristin Heck, UND Master of Business Administration and School of Law; Randy Hermanson, UND School of Law; and Thomas Kading, UND Master of Business Administration and School of Law were selected for the internship program.

The technology commercialization initiative began in January of 2009 following a directed gift from the Dakota Foundation. The purpose of the program is to encourage the creation and development of North Dakota ventures from UND based research. The program rests on four pillars:

1. Promote entrepreneur tech commercialization as an important new initiative for UND, 2. Build from the strength of the UND Center for Innovation, 3. Educate researchers on commercialization, 4. Reward entrepreneurial activity.

Through the internship program, each student will develop a business model around a specific technology. The interns will work with new technology commercialization projects to include: NanoParticle Technology, Cervical Dilation Medical Device, Removal Method for Toxic/Hazardous Chemicals in Building Materials, and System for Collision Avoidance and Interception. In addition to working under the supervision of the professional staff at the Center for Innovation, the interns will work closely with the UND Office of Intellectual Property Commer-

cialization and Economic Development as well as consult with the inventors to understand the technology.

Center for Innovation staff has developed workshops and boot camps to encourage intellectual property activities on campus and has resources available to sha re with university departments. Center staff is available to assist university faculty, staff and graduate students with their technology transfer efforts by providing counsel on business strategies, financing options, networking and partnership development as well as highlighting best practices. Assistance is also available to those who are interested in participating in the SBIR and STTR programs to launch companies with federal funding.

Contact Eric Veidel at (701) 7776623 or eric@innovators.net to learn more about the Entrepreneurial Tech Commercialization Program.

SBIR/ST TR I NVESTS F EDERAL R&D D OLLARS IN E NTREPRENEURS The U.S. Small Business Administration (SBA) Office of Technology administers the Small Business Innovation Research (SBIR) Program and the Small Business Technology Transfer (STTR) Program.

Through these two competitive programs, SBA ensures that the nation's small, high-tech, innovative businesses are a significant part of the federal government's research and development efforts. Eleven federal departments participate in the SBIR program; five federal departments participate in the STTR program awarding $2 billion in over 4,000 awards to small highly innovative businesses.

The STTR and SBIR programs are similar as both programs seek to increase the participation of small businesses in federal R&D and to increase private sector commercialization of technology developed through federal R&D.

The SBIR and STTR programs differ in two major ways. First, under the SBIR program, the principal investigator must have his/her primary employment with the small business at the time of award and for the duration of the project period; however, under the STTR program, primary employment is not stipulated. Second, the STTR program requires research partners at universities and other non-profit research institutions to have a formal collaborative relationship with the small business. At least 40 percent of the STTR research project is to be conducted by the small business concern and at least 30 percent of the work is to be conducted by the single, "partnering" research institution.

The UND Center for Innovation has administered the state’s SBIR and STTR program for more than two decades, providing technical assistance services to

researchers and entrepreneurs interested in pursuing federal R & D funding. The program includes outreach, education and hands-on assistance such as helping to determine if SBIR or STTR is a good fit for a project or assisting with proposal preparation.

Recently, the UND Center for Innovation received a Federal and State Technology (FAST) grant from SBA to support the cost of providing these technical assistance services. The grant also provides funding for a new Phase 0 program which can reimburse participants who meet certain criteria for up to $1,500 of the costs of proposal preparation.

Contact Eric Veidel at (701) 7776623, eric@innovators.net or sbir@innovators.net to learn more about the SBIR /STTR programs.

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I NNOVATE ND A NNOUNCES E NROLLMENT Sixty ideas have been enrolled in the 5th annual Innovate ND competition, involving 58 teams and a total of 113 participants. Twenty-two of the people enrolled participated last year and 10 of them finished in the Top 20.

Innovate ND is a statewide venturebuilding program that offers people with business ideas access to online entrepreneur education, business planning tools, and coaching and mentoring from successful entrepreneurs and proven business owners. The cost to enroll is $250.

The top 20 entries will get the chance to pitch their business idea to a panel of potential investors. Up to five $15,000 cash prizes will be awarded as well as a wide variety of business services and potential seed capital investments to launch their businesses.

“We are very excited about interest in this year’s program and eager to see what kind of new, innovative businesses evolve with the help of this outstanding process,” Bruce Gjovig, Entrepreneur Consultant and Director of the Center for Innovation, said. “We have had a great interest in Innovate ND from all areas of the state. This is a powerful resource for entrepreneurs.”

Individuals and teams applied from all

parts of North Dakota including nine ideas from the northeast region of the state, seven from northwest, 16 from the southeast and 17 from southwest.

One idea was submitted from Minnesota. Current and former North Dakotans and entrepreneurs who have an interest in relocating to North Dakota are eligible to enroll.

Participants are now in the process of developing more detailed idea plans, which are due February 4. From there, judges will narrow the field to between 20 to 30 teams. Those teams will prepare the final business plans, financial statements and presentations which are due April 22. Those teams will receive additional technical assistance and have access to practice sessions to help them prepare for their final presentations in front of judges on May 24. The awards banquet and announcement of winners is scheduled for May 24.

Nearly 700 participants and 350 teams have enrolled in the competition since its launch in 2006 by Governor Hoeven.

Approximately 100 new businesses are operational or in the development stage as a result of the program.

The program is organized by the North Dakota Department of Commerce, the

NUMBERS Center for Innovation and the NDSU Research and Technology Park.

Forum Communications is the lead sponsor. Cavendish Farms of Jamestown is a premier sponsor. Other sponsors include Great River Energy, State Bank & Trust, Bremer Bank, North Dakota Association of Rural Electric Cooperatives, Montana Dakota Utilities, Weather Modification, Solarbee, Agency MABU, the Kilbourne Group, First Western Bank and Trust, ND Society of Certified Public Accountants, Bismarck-Mandan Development Association, Dakota Growers Pasta Company and Jamestown/Stutsman Development Corporation.

Partner programs include Marketplace of Ideas, DSU Strom Center for Entrepreneurship and Innovation, Southern Valley Innovation Center in Wahpeton, IDEA Center in Bismarck, Bismarck State College Office of Innovation, and Minot State University Severson Entrepreneurship Academy.

Contact Rodrigo Cintra at (701) 777 -3970 or rodrigo@innovators.net for more information about the Innovate ND program.

Visit www.InnovateND.com to learn about past champions.

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S TUDENT E NTREPRENEURS R ECEIVE $25,000 APUC G RANT UND engineering graduate students, Jonathan Alme and David Dvorak, were awarded a $25,000 grant from the North Dakota Agricultural Products Utilization Commission (APUC) to build a prototype for their aerial imaging company Field of View, LLC. Additionally, they received $10,000 in matching funds from the Center for Innovation comprised of an $8,500 Dahl/Melroe Entrepreneur grant and a $1,500 Mueller Entrepreneur Internship stipend.

APUC’s mission is to create wealth and jobs through the development of new and expanded uses of North Dakota’s agricultural products. The commission accomplishes its mission through a grant program. The commission consists of nine members. The governor appoints five members, three ac-

tively engaged in farming and two actively involved in business. The commissioner of agriculture appoints one member who is actively engaged in farming. The commission also includes three statutory members: the director of the Department of Economic Development & Finance, the president of North Dakota State University and the commissioner of agriculture, or their designees.

APUC grant applicants are invited to present their proposals to the commission on a quarterly basis. A maximum of 15 qualifying presentations are heard each quarter. APUC awards grants in four areas: basic and applied research, marketing and utilization, farm diversification and agricultural prototype development.

Field of View began as CEO

David Dvorak’s precision agriculture research project. Dvorak successfully designed and built a payload to fly in the Unmanned Aircraft Systems Engineering’s (UASE) Super Hauler to provide data and imagery on the health of vegetation within the fields.

Today, Field of View is a hightech startup company that sells specialized aerial imagery products to provide a unique view of agricultural assets. The imagery allows farmers/growers, agricultural researchers, consultants, crop insurers and cooperatives identify problems and solutions in the management of their agricultural assets.

For more information about Field of View, LLC visit www.fieldofviewllc.com.

La Royce Batchelor, Maverick Entrepreneur, began consulting with the Center for Innovation in the fall of 2010 while working on a PhD in Educational Leadership, Entrepreneurship cohort at UND. She is providing fundraising and marketing assistance to the Center for Innovation Foundation. An experienced entrepreneur, La Royce started her first business at age 15, named While You

Were Out, cleaning businesses and homes as well as preparing home meals. She sold the business in 1987 at the same time she was recruited to UND on a speech and debate scholarship.

La Royce achieved her karate black belt in the summer of 2009 and formed the UND Karate Club. She also teaches in the UND Entrepreneurship program.

Ashley Putnam, Venture Consultant, began consulting with the Center for Innovation in the fall of 2010 while completing a Master of Engineering, Entrepreneurship cognate at UND. She is providing business

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Visit www.business.nd.gov to learn more about APUC. S TUDENT E NTREPRENEUR :

C ENTER FOR I NNOVATION W ELCOMES N EW C ONSULTANTS The Center for Innovation welcomes two new consultants who will provide their expertise in the areas of fundraising, marketing and life sciences related ventures.

W ELCOME !

expertise in the life sciences field. A student entrepreneur, Ashley started Mis-Logic, a medical device company, developing hardware and software for occupational and physical therapists. The company has been entered into the Innovate ND competition for the second time. In addition to a demonstrated passion for entrepreneurship and technology, Ashley enjoys a wide range of activities including cooking, hunting, snowboarding and traveling.

Upon graduating in December of 2010, Ashley began employment with Linn Grove Ventures in Fargo.

B ABINGTON J OHNSON C ONSULTING Z ACHARIAH B ABINGTON J OHNSON ~

NON-PROFIT ORG. U.S. POSTAGE PAID Grand Forks, ND 58201 PERMIT NO. 10

Ina Mae Rude Entrepreneur Center Norm Skalicky Tech Incubator 4200 James Ray Drive Grand Forks, ND 58203

Address Service Requested Phone: 701-777-3132 Fax: 701-777-2339 E-mail: newsletter@innovators.net

VISIT

US ON THE WEB: INNOVATORS.NET

THE CENTER FOR INNOVATION HELPS ENTREPRENEURS, STUDENTS AND RESEARCHERS LAUNCH NEW TECHNOLOGIES, PRODUCTS AND VENTURES, DEVELOP BUSINESS AND MARKETING PLANS, ACCESS TALENT OF UNIVERSITIES AND SECURE VENTURE FINANCING. WE ARE A DIVISION OF THE UND COLLEGE OF BUSINESS AND PUBLIC ADMINISTRATION.

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mobility and improve the overall quality of life.

“This acquisition commences a key element of our accelerated growth strategy targeting synergistic companies that enhance our IP,” said Abbas Mohaddes, president and CEO of Iteris. “In addition to an attractive customer base within weather and traveler information systems, MET provides Iteris with key capabilities in the emerging performance measurement and management market. With MET, our company is better equipped to empower travelers and traffic management authorities with more accurate and real-time information, and network performance management.” Leon Osborne, president and CEO of MET, commented, “This was an obvious strategic move for us since our companies have worked very well together on various projects in the past,

including 511 travel information and weather forecasting services. Iteris offers a leading platform in the Intelligent Transportation System market that will help leverage our services into new geographies and market opportunities.”

MET reports that it will operate as a wholly-owned subsidiary of the Iteris family and assures its customers will continue to receive high-level products and services from the same innovative and creative staff they have worked with and come to expect for the past 12 years.

Visit www.meridian-enviro.com and www.iteris.com to learn more about these companies.

Visit www.innovators.net to learn more about other incubator tenants and graduates.

“This was an obvious strategic move for us since our companies have worked very well together on various projects in the past, including 511 travel information and weather forecasting services.”

Leon Osborne MET President & CEO