Incubator Tenants Leave the Nest

The pilot incubator program in Montgomery County, Md., proves a success

Three local information technology start-ups are officially on their own thanks to a pilot project in Montgomery County, Md., designed to nurture fledgling high-tech companies.

Visual Networks, KBM Group and Exposoft declared themselves financially stable enough to exit the incubator program at a graduation ceremony July 19 at The Montgomery County Technology Enterprise Center in Rockville.

The program's success has led the county to set aside $4 million in state funds to continue the program that launched in September 1993, Montgomery County Executive Douglas Duncan said at the graduation ceremony.

Montgomery County provides $200,000 annually for the program, which helps pay the rent for the 10 companies currently in the facility. The program offers start-ups breaks on their leases, administrative support and office supplies. Participants in the program also receive guidance from members of the Suburban Maryland High Technology Council, which operates the program.

Tenants are accepted by the incubator council according to their business plan. Companies graduate from the program when they are able to pay for 90 percent of their rent and are expected to graduate after three years.

Scott Stouffer, founder of Visual Networks, expects the company to hit $45 million by the end of 1997. He also expects an initial public offering by 1997, with the company's market value at $300 million. The company produces access solutions for networks based on public, wide-area services. The program "kept our minds off the infrastructure aspects of business and kept our mental capacity on the real job of running a business," said Stouffer.

The new incubator, The Maryland Technology Center, is expected to be complete in February 1998. The center will house both infotech and biotech start-ups. Operation of the facility will cost the county $250,000 annually.

"We expect the program to create hundreds of jobs in the next five years," said David Edgerley, director of economic development for Montgomery County. "This is a significant program that is publicly justified."

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