Funding for startups

Out of the Lab: The Cream of the Trough

What do companies like Digital Optics Corp., GenOA Corp., and Lightwave Microsystems Corp. have in common? Each of these startups got its first big break from a U.S. government funded program that's designed to provide seed money for projects that are so early stage they can't get cash from VCs.

Every year, hundreds of researchers compete for funding from the Advanced Technology Program (ATP), which is organized by the National Institute of Standards and Technology (NIST). Only the crème de la crème -- the projects that really catch the imagination of a jury of some of the country's top scientists -- actually get grants.

This year, NIST gave away $274 million to a total of 54 projects. That's an average of $5 million per project. Like all competitions there are rules. Awards have a cap of $2 million where a project is put forward by a single participant, while consortia can claim a maximum of half their projected costs. Funding is strictly on a one-off basis. Universities need not apply, though they may collaborate.

Though the money is not available exclusively to startups, about half of all the project awards go to fledgling firms, according to NIST. "Without the ATP's support we would have lost two to five years competitive market position," writes NP Photonics, one of this year's winners, in its project brief.

Established companies compete so that they can take on riskier, long-term research programs that they could not otherwise justify. Larger companies are a slave to market economics, which force them to make narrow, short-term investments in R&D, in order to quickly maximize returns.

Delve into the list of ATP award recipients and there is a veritable Aladdin's cave of early-stage research to be found. Here are some of the optical highlights...

NP Photonics Inc.
Integrated Fiber Amplifiers and Glass-on-Silicon Optical Components

  • Project aim: To develop inexpensive integrated optical components for optical networks. NP claims to have a new hybrid polymer-glass mixture that can be patterned using standard photolithography. (In this respect it sounds a lot like Lumenon Innovative Lightwave Technology Inc.) It also plans to integrate glass amplifiers onto the chip to provide gain, to compensate for the losses in optical splitters.
  • Announced: October 2000
  • Total project funding: $3,346,000
  • ATP funds requested: $1,998,000

    Optical Research Associates
    Software Tools for Optical Component Design

  • Project aim: To develop new mathematical algorithms for software simulation of how light behaves in photonic components. At present software programs take unfeasibly long to model many of the large or complicated shapes in optical components. "If the project is successful, it would cut manufacturing costs for photonic components by about 3 per cent, or $100 million annually in the US," the firm writes in its project brief. (Also see Startup Slashes Component Design Times).
  • Announced: October 2000
  • Total project funding: $2,729,000
  • ATP funds requested: $1,123,000

    Digital Optics Corp.
    Integrated Optics

  • Project Aim: To reduce device size, cost, and development cycles of optical components. DOC has come up with a concept it calls an "integrated micro-optical system" (IMOS), which is a three-dimensional assembly of lasers, detectors, and electronics on a wafer. Integrated optics is a heavily contested zone, but DOC has a new take on the idea: It plans to assemble components in three dimensions. Key challenges include developing new processes to align, mount, and bond components.
  • Project duration: November 1998 to October 2000
  • Total project funding: $2,880,000
  • ATP funds requested: $1,656,000

    GenOA Corp.
    Low-Cost WDM Optical Amplifier and Switch Technology

  • Project aim: GenOA claims to have a device that can amplify outside the traditional amplifier bands (around 1550 nanometers). But to make it a practical proposition, the optical power output needs to be improved. It sounds like a semiconductor optical amplifier (see Kamelian Gets Green Light), but GenOA could not be reached for comment.
  • Project duration: November 1998 to April 2001
  • Total project funding: $5,341,000
  • ATP funds requested: $2,000,000

    Lightwave Microsystems Corp.
    Optical Polymers for Low-Cost WDM Devices

  • Project aim: To slash the cost of DWDM equipment by using polymers. The only trouble is, Lightwave Micro has to develop the materials first. It aims to make a variety of polymers to perform the different functions needed on an optical chip, including passive and materials with optical gain. The company decided to push into the marketplace early with a different technology -- silica-on-silicon -- but still hopes to make a splash with polymers (see Lightwave Microsystems Mulls IPO).
  • Partner: B.F. Goodrich Performance Materials
  • Project Duration: January 1999 to December 2001
  • Total project funding: $10,363,000
  • ATP funds requested: $5,098,000

    SDL Inc.
    Advanced Photonic Manufacturing

  • Project aim: To eliminate the laborious, semi-manual process of assembling optics, lasers, and other components into devices. This is automated manufacturing and it's a bit of a holy grail. It promises to increase yields at the same time as cutting costs and manufacturing times.
  • Partners: Newport Corp. (Nasdaq: NEWP); Adept Technology Inc. (Nasdaq: ADTK); RSoft Inc.
  • Project duration: February 1999 to February 2002
  • Total project funding: $5,835,000
  • ATP funds requested: $2,859,000

    Telcordia Technologies Inc.
    An Integrated Simulation Environment for Photonics

  • Project aim: Network design tools can slash development costs (see Startup Targets Design Tool Dominance). A consortium of eight partners wants to create a bigger and better set of computer simulations that can evaluate photonics at the component, systems, and network levels.
  • Partners: Columbia University; Hewlett-Packard Co. (NYSE: HWP); Nortel Networks Corp. (NYSE/Toronto: NT); RSoft Inc.; SDL Inc.; Science Applications International Corp. (SAIC)
  • Project duration: February 1999 to February 2004
  • Total project funding: $22,750,000
  • ATP funds requested: $10,735,000

    Xerox Corp.
    Micro-Opto-Electro-Mechanical Systems

  • Project aim: MOEMS is like MEMS (micro-electro-mechanical systems) but with more optics. In other words, rather than just movable mechanical parts, it also contains movable optical parts such as lenses. The consortium aims to explore MOEMS manufacturing for a range of applications, including optical networking.
  • Partners: Maxim Integrated Products; Microcosm Technologies Inc.; Microscan Systems Inc.; OMM Inc.; Standard MEMS Inc.
  • Project duration: February 1999 to February 2002
  • Total project funding: $13,963,000
  • ATP funds requested: $6,914,000

    3M Company
    Data Pipe

  • Project aim: The goal is to make optical links as cheap as copper wires. The partners plan to develop and test a 36-fiber parallel optical link capable of transmitting up to 2 Gbit/s per fiber. The transceivers will be VCSEL based (see Laser Blazers).
  • Partners: CFD Research Corp.; CoorsTek; Honeywell Technology Center; Precitech Inc.; RSoft Inc.
  • Project duration: January 1999 to December 2002
  • Total project funding: $8,454,000
  • ATP funds requested: $4,175,000

    -- Pauline Rigby, senior editor, Light Reading http://www.lightreading.com

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