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Tech start-up aims to turn status quo on its head

Jack Berlekamp started Pallas Systems in his basement in 2005

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By Elaine Morris Roberts, Staff Writer 8:57 PM Saturday, October 31, 2009

SPRINGFIELD — A 20-year veteran of the technology development business has chosen Clark County as the home for his new company.

Pallas Systems, founded and run by Jack Berlekamp, makes the PS 2100 SIcorder, a multi-function analysis tool that can be used to test electronics used in radar, communications, radio, navigation systems and vehicles.

Pallas is located in the National Environmental Technology Incubator, inside the Mills-Morgan building at Nextedge Applied Research and Technology Park off U.S. 40 east of the city.

Berlekamp started the company in the basement of his home in Columbus in late 2005 and recently moved into the incubator, which was established to support the emergence of innovative technologies with local entrepreneurs and provides help as they commercialize their products and processes, said Nancy Bridgman, executive director.

The evolution of an idea

Before there was Pallas, Berlekamp worked on synthetic instrumentation, a software-based concept, where he developed technology that was applied to large-scale equipment like satellites.

He then had a stint as a consultant for the U.S. Navy managing applications of technology.

When he left his full-time gig to start Pallas, he pulled together the people he needed and got to work.

After he invested nearly everything he had, he realized he lacked the necessary capital he thought his idea would generate, and set out to build a prototype.

“I used my own money and leveraged everything I had. It was truly boot-strapped,” Berlekamp said.

He created a working prototype and began making connections, but none was yielding investors.

Then Berlekamp met Charlie Rinehart, president of Rinehart Consulting, who became his mentor.

“I recognized my weakness was that I wasn’t a finance person. Charlie came along and filled that niche,” he said.

The two men visited the Dayton Development Coalition, and with its ties to Wright Patterson Air Force Base, brought together an audience that understood what he was presenting.

“Through the (DDC’s) Entrepreneurial Signature Program, Jack received government funding that allowed him to get his patent and revise his prototype,” Rinehart said.

ESP offers developmental services and early stage capital to regional technology businesses.

Berlekamp received two ESP loans — funded by Ohio’s Third Frontier program and facilitated by the DDC — totaling $375,000, which he spent on an engineering staff and contractors for product development and securing his patent.

“The first money out of the ESP program was a lifesaver ... That allowed us to redesign the box and keep the business running for a year,” Berlekamp said. “I was tapped.”

Pallas initially sold four boxes to the Institute for Development Commercialization of Advanced Sensor Technology, a Dayton-based sensor technology research firm, which took the software into the field.

Now, the company has an exclusive partnership with EADS North America for distribution of Pallas products, sales and service to potential government clients.

EADS is the world’s second largest aerospace and defense company, according to the company’s Web site. The Arlington, Virginia-based U.S. division is a supplier and industrial partner in defense, homeland security, commercial aviation, helicopters and telecommunications.

“The government needed Windows-based equipment because they already use it. EADS can take their software and put in the unit,” he said.

State funding and the EADS contract allowed Berlekamp to bring on four full-time contract engineers, three of whom were unemployed when Berlekamp hired them.

Berlekamp said he has every intention of converting them to full-time employees when he is able.

A new home

The NET incubator, an independent 501(c)3 non-profit corporation affiliated with Central State University, assists Berlekamp and its four other technology start-up clients with other aspects of business.

Bridgman helped him secure ESP funding and has also helped with strategies for future, more sustainable funding.

“That’s where innovation starts,” she said. “Someone comes up with an idea and research and development gets it out there.”

Berlekamp has a small cubicle for office space and a lab/workshop he and his engineers use for research and prototype modifications, which he leases at subsidized rate. All incubator clients receive use of Nextedge’s infrastructure and support with legal an accounting services.

“We go to bat for the entrepreneur,” Bridgman said.

The incubator’s funding comes from a variety of sources including Ohio’s Third Frontier program, Future Jobs and the DDC.

A $130,000 ESP grant supports creating business plans, securing financing and marketing a business to other businesses and venture capitalists.

Bridgman works hard to secure things fledgling companies like Pallas need, she said, not only to get the business going, but also to improve the community.

“The goal is to provide services for start-ups to achieve professional and job growth. ...The loyalty and good will that’s built up pays off. People working for these companies want to put down roots in your community,” she said.

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