A look at Virginia’s Center for Innovative Technology
The Center for Innovative Technology, a non-profit corporation based in the Washington suburb of Herndon, Va., uses a mix of state, federal and private sector funds to invest in high-growth, early-stage technology companies with the goal of generating significant economic returns for entrepreneurs, co-investors and the Commonwealth of Virginia.
In an interview with StateScoop, Pete Jobse, CIT’s President and CEO, said the majority of the center’s attention these days is focused on the cybersecurity space, which will only grow in the coming weeks with the launch of the center’s Mach37 Cybersecurity Accelerator.
“We see the Mid-Atlantic, specifically the Metro D.C. area, as this huge repository of expertise on what the problem sets for cybersecurity are,” Jobse said. “Knowing we have that intelligence asset base, we want to turn those problem sets into solutions, and therefore the creation of new products. The accelerator will help those products become early-stage companies to hopefully find the next McAfee, Symantec or Mandiant.”
CIT is set to launch the inaugural class this fall with another coming up right behind it in the spring. The companies selected will take part in an intensive, 90-day program aimed at transforming innovate cybersecurity product ideas into early-stage companies.
Approximately six companies will be picked for the initial session and more will be admitted to subsequent sessions.
At the completion of the session, cohort companies will present to professional investors in the hopes of securing company funding. Companies will remain members for life with ongoing access to network resources and growth support.
“A lot of the cybersecurity companies around Virginia are based on services, but what we’re focused here on is creating products, which has a dramatic difference in the way capital is used,” Jobse said. “What Mach37 will do is create a model to fill in the environmental gaps that exist in the ecosystem to get products like this to the market.”
Jobse came to CIT in 2002 as the organization’s chief operating officer and executive president following a 23-year career working with advanced technology in the private sector. No stranger to the startup world, Jobse was a member of the founding management team of ArcSite, a cybersecurity company that later sold to HP for $1.5 billion. He was named President and CEO of CIT in 2003.
Under his leadership, CIT has slightly shrunk its number of employees from 45 to 40, but more than tripled the amount of annual mission-related revenue it deploys in its programs. .
CIT receives about half of its operating money from the Commonwealth of Virginia and has a close working relationship with the commonwealth to implement its four main service lines: CIT Entrepreneur, which provides seed-stage funding for companies; CIT Connect, which consults with agencies on innovation; CIT Broadband, which accelerates broadband deployment across the state; and CIT R&D, which commercializes research and prototypes emerging solutions.
“What the state does is provide guidance with its appropriations, but give us the latitude to make decisions on the direction and implementation of the funding,” Jobse said.
Outside of cybersecurity, Jobse said CIT is also focused on other maturing markets such as medical devices, new materials and advances for cancer therapies. Many of these products come out of state universities, federal labs or simply entrepreneurs working from their homes. CIT helps these researchers commercialize their product with early alpha funding to create a prototype that can be used to find more capital if the market sees fit.
“With new technologies, you are already investing in a system that has a 50 percent failure rate that is even higher in some markets,” Jobse said. “We make sure our investments have an investor market that can support it after we’ve made our investment, because without that you are committing a startup to a short existence.”
For its seed-stage investment program, Jobse said CIT looks for private sector investments along with its own with private investors putting up $13 for every $1 that CIT spends. By doing that, the Center knows a startup is already working in a market with a strong potential for producing the capital required to develop the product and company.
To choose the companies CIT picks for its program, Jobse said there is an investment advisory board made up of private sector partners and investors that make the decision on which companies move forward.
“We have an independent board that makes a relatively quick decision and gives honest feedback to the presenting companies,” Jobse said.
CIT has also acted as a consultant for Virginia on a recent challenge. Last year, Virginia’s Department of Education came together to run an application development program, known as “Apps4VA,” where Virginia students and the general public took part in two competitions to create an application using publicly available data on the readiness of students for college and beyond.