6.0. EDSR 09-13-2004 ITEM 1 6.
• .‘j1/
City of
Elk
River
MEMORANDUM
TO: Economic Development Authority
FROM: Heidi Steinmetz, Assistant Director of Economic Development
DATE: September 13, 2004
SUBJECT: Semi-Annual Business Incubator Report:
Harlan Jacobs, Genesis Business Centers
Attachment
• February 4, 2004 Report
Issue
Incubator consultant Harlan Jacobs will be in attendance at the EDA meeting to provide his
Semi-Annual Incubator Report. Copies of the report will be distributed at the meeting. Mr.
Jacob's February 2004 report is attached for your reference.
•
• Elk River Incubator Program Status Report 4 February 2004
Tenants Report:
The two tenants in the incubator program continue to make progress in growing
their businesses.KnowledGenetica has now been able to significantly improve
the 'user friendly'nature of its human speech interactive computer web based
informational retrieval system.The system employs impressive visual graphics
and is quite robust for a system of this complexity and capabilities.To step
back and consider that this work was done on a'shoestring'budget with part
time contractors living in different parts of the country is rather impressive.
These continuing improvements should make it easier for the company to raise
capital and to then higher more high paid programmers and systems designers.
The other tenant,Laptwo,is conscientiously going through its
• options/alternatives 'on the owners's money'as Rob Henningsgard is proving or disproving
the viability of several business scenarios that he has been pursuing.We are
confident that the 'right'application will be obvioius to him here shortly.In
fact,it may relate to the first part of the next report in respect of
prospectcs for the incubator program.
Facilities Report:
Mr.John Weicht,of John C.Weicht and Associates,a local real estate
development company based in Elk River,has indicated his interest in exploring the
inclusion of an incubator facility in any major new building that he may build
in the next year or so.
We had a very constructive meeting at the Elk River City Hall offices.We
discussed the idea of his building a 100,000 square foot office/warehouse
• facility that would accommodate the needs of high tech companies such as the
• 'Cymbets'of the world.
We further discussed the idea that towards one of the far sides of the
building,he could have the designer plan for space that would be suitable for
subdivision into as many as ten individuals office/warehouse portions with about
1,000 square feet each.
Of course,these discussions were non binding discussions in principle.
Nonetheless,we are encouraged by his willingness to discuss the matter.It is
important in the long run to have a facility with city services(water and sewer)
in order to accommodate science based companies that require the water for
cooling their instruments and other apparatuses.
Prospects Report:
Joint Venture between Swedish Company and Laptwo
On 10 February 2004,Mr.Anders Lindberg of Mora,Sweden, will be visiting
with Rob and me to discuss the nature of a possible joint venture between Laptwo
and Scantrace,Mr.Lindberg's company. Scantrace has developed meat tracking
software that basically documents the chain of custody from the 'gleam in the
bull's eye to the package of hamburger at the supermarket's meat shelf'.
Scantrace has received over$500,000 of funding from the Swedish Farmers
Cooperative(that's a rough translation of the actual Swedish name).
Anders and I will be meeting with Cargill to explore both investment(from
its venture capital fund)and business relationships with its meat packing
interests.
Obviously,now with the hieghtened concern about mad cow disease,tracking
livestock is very important to maintaining the public's confidence in the meat
that is purchased at the supermarket. Scantrace can help on a cost effective
1111 basis to provide the tracking that's necessary for documentation and follow
• through whenver meat recalls may be necessary.
Scantrace's system is operational now for about two years in a limited field
trial in Sweden.It meets the highest European standards and Mr.Lindberg is
one of the leading authorities in Europe in respect to trackability of
livestock.
For the record,when Genesis had a consulting contract with Vattenfall A.B.,
the Swedish utility company,to establish an incubator program in Mora,Sweden
about 4 years ago,Scantrace was one of the most promising companies.We kept
it on our radar screen on the hunch that the market would catch up with the
technology.Now that mad cow is in the U.S.,the technology is needed.Scantrace
with its European credentials and possible linkages to the Cargills and food
cooperatives/livestock growners associations here could become the key player
in this space.
Anders is keen on finding the right person in the US with which to work on
the North American deployment.We believe that Rob Henningsgard fits the bill.
Enovato
Enovato is a new high tech start up company organized by Madan Manoharan
(Genesis is a co founder of the company).Enovato will be licensing technology
under a patent that Madan co authored with one of the leading U.S. government
science/technology agencies(it cannot be mentioned until the NDA is signed by
the EDA-Madan should be sending it shortly if it has not already been recently
sent).
The technology relates to flexible,thin film display screens.Imagine a thin
rug or roll of lineolum for a basic framework for the application of this
invention.Then imagine that it has a translucent coating that is flexible and
• bendable.Further imagine hooking a DVD player or laptop or other driver into the
. connection cable and beaming'an image that is 4 'by 6'in area.And
further imagine that this display technology is not more than one half the cost of
plasma display screens.
Enovato is looking to either establish its manufacturing plant outstate and
to do a head quarters with R&D in Elk River or to have all operations in Elk
River.To get started,the company needs at least$350,000 of capital in one
fell swoop(or about one half down and the balance on a commitment basis in
several months after commencement of operations).
Enovato would be a good candidate for a combined Central MN Initiative
Fund/MinCorp/ASCCF/Elk River Investment Club hybrid funding program.
Avanta Orthopaedics
Avanta Orthopaedics is a subsidiary or affiliate of Cretex in Elk River.It
• is probably going to be using some space in the biomechanics laboratory at the
Midwest Orthopaedic Research Foundation(MORF)incubator program on the HCMC
campus under the incubator program there to be managed by Genesis.
The contact is H.Doug Plunkett at 763 783 5017.I met with him right before
leaving for the two weeks of travels in which I am currently overseas and did
not have time to follow through with EDA on this lead prior to leaving on my
trips.
Because of the relationship with Cretex,it might be relatively easy to get
Avanta to consider Elk River for its office and production needs when the time
comes for that.
Bioelectric Medical
Bioelectric Medical is based in San Diego;one of its Officers is a Minnesota
native.Her name is Kay Zurn and she is Vice President for Marketing.She is
a Medtronics 'graduate'.
•
The company has three new inventions to manufacture and market for the
treatment of wounds and chronic pain conditions.
The company is seeking a contract manufacturing agreement with a Minnesota
based entity;it is further interested in collaborations for various orthopaedic
applications that could well include addtional business opportunities for
companies like Avanta(see above)as well as newly formed subsidiaries in respect
of joint ventures.It is thought that one of these prospective joint ventures
could be located in the incubator facility.
TransMed remains a prospect after the company finishes its homework with
respect to prior year audits and related matters.We will continue to monitor the
situation there.
•
Respectfully committed,
Harlan Jacobs
President
Genesis Business Centers,Ltd.
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