A Penn venture seeds its first tech business

You’ve got a project to complete today. You turn on your trusty personal computer, only to see the blue screen of death.

Uh-oh. Your Windows got broken. Your drivers won’t drive. Your PC has become a useless hunk of metal.

But don’t reformat your hard drive yet. There’s good news. Some University of Pennsylvania researchers have created and patented software to prevent problems like yours.

Here’s the bad news. You can’t buy that software — yet.

But here’s more good news. With help from a University division called PenNetWorks, a program to promote young Internet and computer-technology businesses, a business created to sell that software has crossed the first hurdle in becoming viable. It has gotten some investment money.

The business, Secure Building Blox, Inc., based on patented technology created by University of Pennsylvania researchers William Arbaugh, David Farber, Angelos Kermytifi and Jonathan Smith, is PenNetWorks’ first investment.

PenNetWorks is the first fully-running arm of an effort by the University to accelerate the development of technology-related entrepreneurial ventures at Penn, and secondarily in the region.

That effort is called P2B Ventures, Inc., a non-profit, wholly-owned subsidiary of the University.

In addition to P2B’s PenNetWorks arm, which supports the formation of computer technology businesses at Penn and also in the region, P2B plans to include arms to support business ventures generated by University people in the life sciences and e-learning, said Phil Goldstein, P2B’s chief operating officer. University Executive Vice President John Fry is president and chief executive officer of P2B.

P2B will also support the marketing of a variety of education and business-solutions materials generated by the University’s schools and staff.

P2B is looking to see how schools like the University of Chicago, Columbia and Boston University support business ventures. “We’re trying to learn lessons from them,” Goldstein said.

Both P2B and PenNetWorks were created in November.

What PenNetWorks does is provide early venture money, and managerial and financial expertise to computer tech businesses. “Our goal is commercialization of raw technology to help these young companies prepare to get real money,” said Craig Markovitz, PenNetWorks’ chief operating officer.

“Penn didn’t know how to run a technology [business] incubator,” said Markovitz, so they approached the Redleaf Group, an early-stage investor in technology businesses. Redleaf employs Markovitz to run PenNetWorks for the University just as Barnes & Noble employs the people at Penn’s bookstore and runs it for the University.

So far, PenNetWorks has looked at in excess of 250 business concepts, and about 75 of them led to meetings, and now PenNetWorks is poised to invest in another venture, with a couple of more strong possibilities close behind.

About 50 percent of the business concepts that have crossed PenNetWorks’ desk have come from Penn, Goldstein said.

But PenNetWork’s target ventures are not Penn-specific.

At a workshop PenNetWorks recently ran called “How to Pitch to Investors” — part of what Markovitz calls their Business 101 series — some Penn students attended. But most of the others there were entrepreneurs from the Port of Technology business incubator. One of the attendees was a Patty Rogalski from Drexel University’s Lawrence A. Baiada Center. “We’re an entrepreneurial center for Drexel students,” she explained. She came to the workshop hoping to learn ways to help Drexel students pitch their business ventures.

“It’s a regional effort, focused on creating business in the Delaware Valley,” Markovitz said.

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Originally published on August 30, 2001