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Investments will fund inventor's S.A. move
June 11, 2010

 

 

 

 

 

 

 

 

 

 

InCube Labs Chairman and CEO Mir Imran during the announcement at City Hall. Photo by John Davenport

By David Hendricks - Express-News

The move of a medical devices business incubator from Silicon Valley to San Antonio will be backed by investments - not incentives - from the city, Bexar County and other investors in a $25 million combined package, Mayor Julián Castro and City Manager Sheryl Sculley said Thursday.

Mir Imran of San Jose, Calif.-based InCube Labs, one of the world's leading medical device inventors and entrepreneurs, also will establish three new companies in San Antonio by the end of this year and another two within three years.

These companies will go through the incubator before going commercial.

The companies will be supported by a new $30 million San Antonio-based venture capital fund, called InCube Ventures II, which is funded by numerous businesses and individuals - notably USAA, which invested $10 million.

Imran hopes to grow the fund to $100 million - half of which he'll raise from national investors.

"This is truly an exciting moment for our little company in San Jose," Imran, 54, said during a City Hall announcement. "This is the first time our research lab is venturing outside of California."

For the incubator portion of the deal, expected to launch by the end of 2010 in Northwest San Antonio, Imran will invest $15 million.

The other $10 million is comprised of $6 million from the city, $2 million from Bexar County, $1 million from the Texas Research & Technology Foundation and $500,000 each from the University of Texas at San Antonio and the UT Health Science Center.

State investments from the Texas Emerging Technology Fund are pending. A proposed $9.2 million in direct investments, to be divided among the first three companies Imran is bringing to San Antonio, has been recommended by the ETF board.

The move of a medical devices business incubator from Silicon Valley to San Antonio will be backed by investments - not incentives - from the city, Bexar County and other investors in a $25 million combined package, Mayor Julián Castro and City Manager Sheryl Sculley said Thursday.

Mir Imran of San Jose, Calif.-based InCube Labs, one of the world's leading medical device inventors and entrepreneurs, also will establish three new companies in San Antonio by the end of this year and another two within three years.

These companies will go through the incubator before going commercial.

The companies will be supported by a new $30 million San Antonio-based venture capital fund, called InCube Ventures II, which is funded by numerous businesses and individuals - notably USAA, which invested $10 million.

Imran hopes to grow the fund to $100 million - half of which he'll raise from national investors.

"This is truly an exciting moment for our little company in San Jose," Imran, 54, said during a City Hall announcement. "This is the first time our research lab is venturing outside of California."

For the incubator portion of the deal, expected to launch by the end of 2010 in Northwest San Antonio, Imran will invest $15 million.

The other $10 million is comprised of $6 million from the city, $2 million from Bexar County, $1 million from the Texas Research & Technology Foundation and $500,000 each from the University of Texas at San Antonio and the UT Health Science Center.

State investments from the Texas Emerging Technology Fund are pending. A proposed $9.2 million in direct investments, to be divided among the first three companies Imran is bringing to San Antonio, has been recommended by the ETF board.

Gov. Rick Perry, Lt. Gov. David Dewhurst and House Speaker Joe Straus must sign off on the ETF investments. A decision is expected by the end of June, Sculley said.

Until the ETF decision is made, the names of the first three early-stage companies and their products won't be divulged, Imran said.

"This is about moving San Antonio economic development into the 21st century," Castro said. "It's about building a brainpower community in San Antonio."

"It's a paradigm shift" for the way economic development occurs locally, Sculley added. "Given Mir Imran's track record, we think the opportunity (to invest) is a pretty good risk."

Any proceeds from the investments in the coming years would be funneled into a self-perpetuating city economic development fund, she said.

The three companies Imran plans to establish in San Antonio and the incubator will start in an existing 20,000-square-foot building at 12500 Network Blvd. on the Northwest Side. The early-stage companies have been in development at InCube Labs in San Jose.

The InCube Labs' San Antonio Innovation Center incubator will hire nearly 50 people, paying in a range of $50,000 to $200,000 a year.

The companies passing through the incubator will hire up to 400 additional workers over the next 10 years, Sculley said.

The guiding principle behind all of Imran's companies is that the products must have practical, clinical applications.

"I have a passion for solving unsolved problems," he said.

The "real impact" of his companies, Imran said, is that the employees who work for them learn how to become entrepreneurs and go on to establish their own companies.

The City Council will be asked next Thursday to approve a nonprofit economic development corporation devised by Sculley.

The city would invest its $6 million through the nonprofit in InCube Lab's San Antonio Innovation Center. The proposal calls for City Hall to invest $2 million the first year and $1 million each year in the following four years.

The city and its investment partners will see returns when the first five companies exit the San Antonio Innovation Center because they will own "founders' shares" in the companies.

When the companies turn a profit or are sold to other companies, the profits will be shared among the founding shareholders and the investors in the InCube Ventures II fund.

The city will protect its investments through clawback clauses in an agreement. If InCube Labs doesn't live up to its commitments, for example, the investments will be converted into loans, Sculley said. The agreement was signed May 28.

Imran said he began contemplating his expansion four years ago when the medical department of Texas Instruments asked him to consider Dallas, TI's headquarters.

Imran visited San Antonio for the first time in December 2009, when he spoke at a dinner benefiting BioMed SA, headed by former Mayor and BioMed SA Chairman Henry Cisneros and President Ann Stevens.

He considered San Antonio, Dallas, Austin, Houston and "even College Station." But he settled on San Antonio when private investors for InCube Ventures II stepped up.

Along with USAA, other investors include Broadway Bank, International Bank of Commerce, Methodist Healthcare Ministries and numerous other companies and individuals.

The real competition for San Antonio was Dallas, said former Mayor Phil Hardberger, who introduced Imran to San Antonio venture fund investors.

"For a long time, it wasn't clear who would win," Hardberger said.

Imran holds about 250 patents and has created 22 companies, 20 of which still exist.

Fifteen of them have been purchased by other medical device industry giants, including two to Minnesota-based Medtronic Inc., which last year opened a sales-and-customer-support center in San Antonio for its diabetes unit.

Imran uses the proceeds of the sales to form new companies.

Imran started his first company in 1979, which assisted in the development of the first-approved automatic implantable cardioverter defibrillator, which is used all over the world in patients in danger of sudden cardiac death.

The device was sold to Eli Lilly & Co. and now is part of Guidant, part of Boston Scientific Corp.

Imran also is the inventor of the full-body scanners used at security checkpoints in airports around the world.

Born in Hyderabad, India, Imran came to the United States in 1973 to attend Rutgers University, where he studied electrical and biomedical engineering.

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