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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowIf money can’t buy love, as the Beatles sang 40 years ago, neither can it make a startup company prosperous.
While David Becker and David Doyle are no John Lennon or Paul McCartney, their wisdom certainly makes sense for locally based Inception LLC. That’s the consultancy, incubator and venture capital firm they founded in November 2000.
“Entrepreneurs always think that, if they had money, they would be successful [right away],” Doyle said. “That’s not always the case. There are very few overnight success stories.”
Rather, a more realistic timetable for a business plan to mature is three to five years, Doyle said. And most enterprises are going to need more than money to make it. That’s where Becker and Doyle think Inception can make a difference. The two hit it off after meeting through the business networking process and learning they shared similar views on how to help a young business grow.
Becker is a high-tech entrepreneur who funds Inception’s investments. His prior business ventures include re:Member Data Services Inc., Americard Services Inc., First Internet Bank of Indiana and Virtual Financial Services Inc., or ViFi. he wanted to work inside a company.
That desire led him in 1997 to migrate to Onex Inc., a startup provider of business and information-technology consulting and recruiting services that later was sold to New Jersey-based Inrange Technologies Corp. in 2001. Doyle left upon the acquisition.
During his time there, however, he met Ken Roe. Roe serves as a principal at Inception and helps companies form marketing strategies, in addition to evaluating business plans for possible investment. Another principal, Nick Bowles, came to Inception straight from DePauw University with a background in computer science. He also reviews business plans and oversees the incubator.
The trio has pored over roughly 600
In January 2002, Becker sold ViFi to Calabasas, Calif.-based Digital Insight Corp. for nearly $54 million. Several of Becker’s companies, including Inception, are housed in the Woodland Corporate Park building on the city’s northwest side.
Doyle has a commercial lending background and started his career at the former Indiana National Bank. He left in 1992 when it was purchased by the former NBD Bank, which later merged with Bank One. He later spent time with investment firm Raffensperger Hughes & Co., bought by NatCity Investments Inc., before deciding business plans from entrepreneurs seeking assistance. Of those, only 30 might have a chance to succeed, Doyle said. Inception has investments in five ventures, including OneBridge Inc., Dyknow and Embedded Concepts LLC, all owned by Becker. It hosts six companies in its incubator space. The 15,000-square-foot facility has room to accommodate cubicle space for up to 15 companies and provides the entire infrastructure a startup needs.
“If it works, it works; we’ll get paid back,” Becker said of Inception’s investments. “If not, we’ll go on down the road to the next guy.”
Space can be leased on a monthly basis, affording fledgling entrepreneurs the relief of not being saddled with a five-year lease they would encounter in the market.
The shared space also provides them a chance to commiserate with one another about challenges they may be experiencing.
While there are business incubators in the city, the Inception model that combines consulting services with the possibility of a cash infusion is a rarity. The Indiana University Emerging Technologies Center is similar, Doyle said, except IUETC’s space is dedicated to laboratory work while Inception offers office space.
One of the current occupiers of the incubator is OxygenED LLC. Started by Joe Kitterman, the four-employee operation offers teaching software to manufacturers via the Internet. When former incubator Techwell LLC closed in December 2001, OxygenED was only about a year old and among three companies that moved to Inception’s space.
The plan is to grow to 20 employees by the end of the year and be free from the incubator in the next 12 months. Kitterman insisted he won’t get to that point, however, without the help of Doyle, Roe and Bowles. The former plant manager said the three have been integral in helping him navigate the choppy waters of starting a business.
“It’s been a four-year MBA program for me,” he said. “It’s been a huge blessing to be surrounded by these guys. Had I been out on my own, I would have given up a long time ago.”
The object of any small business nurtured by an incubator is to leave the comforts of the nest when they’re ready. For the folks at Inception, they know they’ve done their job when that happens.
Angel Learning grew to 25 employees before leaving Inception for its own space in the northwest-side building that houses Interactive Intelligence Inc.
Inception will make money through its equity success, Doyle said. Becker’s financial backing helps ease the pressure, though, to realize quick returns.
The popularity of the for-profit incubator has waned in recent years as many failed to generate enough value for stakeholders. The not-for-profit business incubator, such as those found at universities, now seems a more realistic approach.
So far, though, the men at Inception seem to be filling a void, said Steve Beck, president and CEO of the Indiana Venture Center Inc. The center, which offers entrepreneurial services, sees a lot of the same business plans Inception does.
They’re putting up a lot of their own money, vis-Ã -vis David Becker,” Beck said. “They’ve got a lot of things in the hopper. But as in any early-stage incubator process, it takes a while to play out. They will have some successes. It’s just a matter of time.”
David Millard, chairman of Barnes & Thornburg LLP’s entrepreneurial services practice, wished there were more entrepreneurs in Indiana emulating Becker.
“We would like to see 40 people doing what Dave is doing,” Millard said. “You have guys like Dave and Scott Jones and you hope you would have a lot more of them.”
Millard lauded Becker and Inception for providing support, besides merely money, to young companies. Doyle said the aim is to first provide an honest evaluation of a business plan, which isn’t always welcome.
“That’s sometimes difficult,” he said, “as strange as that may seem.”
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