State renews support of I-Start

CHAMPAIGN — For Aaron Jones, the start-up assistance provided by the I-Start program at EnterpriseWorks was "extremely helpful."

The $11,000 in professional services paid for by the program helped his fledgling company, Sonistic, get off the ground.

As a result of the award, Sonistic was able to get assistance with two Small Business Innovation Research grants and get legal, accounting and business planning services.

"It can be expensive when you're first getting started" in business, said Jones, whose company aims to improve audio in consumer devices, such as laptop computers and smartphones.

"When you first start to rack up legal fees, you wonder, 'Is this going to be a recurring expense?'" he said.

But I-Start's smorgasbord of services, along with the money to cover a portion of those costs, made the up-front expense less intimidating, he said.

More than two dozen companies at the University of Illinois have availed themselves of the I-Start program during the last 2-1/2 years.

The results have been good enough that the state of Illinois renewed its support of the program this summer.

In 2011, the Illinois Department of Commerce and Economic Opportunity provided a $100,000 grant to help launch I-Start.

The program provides UI entrepreneurs with 50 percent to 90 percent of the cost of professional services during their first year in business. The maximum award for any one client is $13,410.

The money can be used to cover legal services, business planning, financial and payroll assistance and help in applying for research grants.

This summer, the state provided another $100,000 for the next two years.

In addition to the 24 companies served during the first two years, three more have been approved as clients in the new funding cycle.

Laura Frerichs, director of the UI Research Park and its business incubator, EnterpriseWorks, said faculty members can be intimidated by what's involved in starting a new business.

I-Start aims to make that easier by not only offering financial support for professional services, but also arranging for local firms that can provide those services at discounted rates.

I-Start clients don't have to use those providers, but the firms are qualified and available if clients want them, Frerichs said.

During the first two years, I-Start awarded a total of $155,504 to clients. Of that, $90,000 came from the state grant and $65,000 came from EnterpriseWorks rent income and reserves.

The program doesn't take equity in client companies, but those participating in the program must commit to launching their company at EnterpriseWorks.

Not all companies will need to take space at the incubator, Frerichs said. Some may operate virtually; others may not be able to raise the money needed to lease space.

But if the businesses are successful and need office space, they're expected to come to EnterpriseWorks, she said.

The first 24 clients accepted into the program were a mix. They included 10 software companies, eight biotechnology firms, three "clean-tech" firms, two in the electronics industry and one that provides consulting services.

Nineteen of the companies were started by UI faculty members. Four were founded by grad students, and one was established by a staff member.

At this point, 15 of the companies are tenants of EnterpriseWorks in Champaign, and one has incubator space in Rantoul.

Frerichs said the 24 companies had an excellent record of attracting outside capital.

The firms raised more than $7.6 million in capital over those two years — some of it from Small Business Innovation Research awards and some from venture capital funds, angel investors and other sources.

That's a return on investment for the I-Start program of 49 to 1, she said.

Under the new funding cycle, I-Start is covering additional services, such as regulatory and reimbursement assistance, immigration assistance and prototyping, marketing and branding.

One of the 24 companies — Poheme — is classified as inactive. Another, Adrenaline Browser, has moved to California.

Sonistic, founded in 2011, doesn't have sales yet, but has received two SBIR grants of $150,000, one from the Department of Defense and the other from the National Science Foundation, said Jones, the company's president.

His father, Douglas Jones, is a professor in the UI's Department of Electrical and Computer Engineering and the company's scientific adviser.

Sonistic plans to use its noise-suppression technology in audio peripherals that can improve the voice-capture performance for laptops, tablets, cellphones and smartphones, Aaron Jones said.

The company may end up pursuing its own product or licensing its technology to another company, he added.

Sonistic also worked on acoustic technology that could be used to monitor and track wildlife. It proposed putting an array of devices outdoors to detect the "acoustic footprint" — and thereby location — of threatened and endangered species making audible sounds.

That was the subject of one of the research innovation grants, but Sonistic is not pursuing that application at this point, Aaron Jones said.

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