24 Apr Winner of Burrill competition courted by North Carolina investors
Madison – A young company with a preventive solution to identity theft took home the $10,000 top prize in the 2006 G. Steven Burrill Technology Business Plan Competition, but if area investors want to keep this promising enterprise close to home, they better act quickly.
Khaja M. Din, president IPIC (Internet Privacy & Identity Credential), said Friday the company has been contacted by investors in North Carolina who would like the company to move there as a condition for providing venture capital. Din said his preference would be to remain in Madison, where he is on scholarship at the UW-Madison law school and where the company has received support from the likes of Foley & Lardner, but he indicated the company would go where the money is.
“We have a great deal of funding needs,” Din said following IPIC’s victory in the Burrill competition. “There are a lot of decisions still to be made.”
The North Carolina investors aren’t the only moneyed interests that are impressed with the IPIC technology, which enables consumers to use an alias to prevent identity theft during online transactions. Din and Brent Newport, the company’s director of operations, have been in discussions with two national financial institutions that are interested in partnering with the young company and offering IPIC to online banking customers.
Banks would be among the first partners secured by IPIC to provide online identity protection. Metavante, the Milwaukee-based developer of banking and payment technology, has offered IPIC the use of its labs for the purpose of beta testing the product, Newport said. In addition, area businesses like Yahara Software and the accounting firm Smith & Gesteland have lent support as well.
Foley & Lardner, however, is perhaps the most confident of IPIC’s market potential. The law firm has extended $30,000 in credit to IPIC so the company can file a patent on the technology, which it has done. The law firm decided to extend the credit after assembling a team of attorneys from five practice areas to review whether IPIC was a patentable idea, Din said.
IPIC is a proprietary method of preventing identity theft that offers consumers a unique credential, or alias, that can be used in any standard e-commerce transaction. With this alias, they can make online purchases without revealing personal information on the Internet.
The market for the technology is potentially vast. In its executive summary, the company notes more than 70 percent of Americans have personal computers in their homes, yet most are concerned about making purchases online, and those who make online purchases spend an average of only $880 per year. Their reluctance is primarily due to fears that their credit card number will be stolen, that they will be the victims of identity theft, and that their personal information will be used by spammers.
According to Newport, the IPIC methodology already has passed a crucial regulatory test – it complies with banking regulations contained in federal laws like the Patriot Act. “The issuing bank knows who is associated with the alias, and that’s how we remain compliant with government regulations,” he said.
IPIC was chosen over 11 other undergraduate and graduate student enterprises whose business plans were presented to a panel of judges in the Burrill competition, named for UW-Madison alumnus Steven Burrill, CEO of the San Francisco-based Burrill & Company. Judges included Perh Anderson, managing director of Silicon Pastures; John Neis, co-founder and senior partner in Venture Investors of Wisconsin; Erica Kauten, director of the UW-Extension Small Business Development Center; and Richard Wilkey, president and CEO of Fisher Barton, Inc.
Other top finishers and their prize money included:
Second Place – Healthy sTarts, LLC, which will market a granola and yogurt snack that stays crisp when microwaved, $7,000.
Third Place – Plasma Devices, which is producing a plasma reactor that decontaminates mail and packages, $4,000.
Fourth Place – www.ExchangeHut.com, an online service where college students can buy and sell textbooks and event tickets, $1,000.
The judges were so impressed by the social consciousness of another budding enterprise that they chose to put up $2,000 out of their own pockets to support it. That company, Sustainable Energy for a Sustainable Future, is operated by five students in the UW-Madison Chapter of Engineers Without Borders. They are developing a fuel briquetting process that uses a biomass shredder to generate energy, combat deforestation, and promote economic development in the African nation of Rwanda.