Austin startup Fluid Innovation is making a game out of the arduous task of software commercialization.

VirtualVentures.com combines aspects of fantasy football and social networking, letting players become venture capitalists who make virtual investments.

Fluid Innovation will debut the game at the invitation-only DEMOfall conference in San Diego today.

But Virtual Ventures isn't all fantasy — the technology that players will bet on is real.

Fluid Innovation helps clients including Microsoft Corp., Lockheed Martin Corp. and Texas A&M University sell or license software they've developed in-house to other companies. It makes money by taking a cut of the licensing agreements.

Software industry experts estimate that U.S. companies spend $75 billion annually developing internal software programs. Today, more companies are cashing in on their code by selling it to third parties. At the same time, information technology companies are increasingly expanding their product lines and their revenue by licensing ready-to-go applications.

Using a virtual world to bring both sides together is what impressed DEMO, which showcases startups with cutting-edge technology.

"They've created a fun and engaging way to address a very real market opportunity around internally developed intellectual property," said Chris Shipley, executive producer of the event. "It may be the first fantasy game that companies encourage their IT staff to play."

The difficulty of matching buyers and sellers is what led Chris McKinzie and Andrew Allemann to start Fluid Innovation in 2005.

They previously worked for SBC Corp.'s intellectual property group, where their job was to find SBC technology with commercial viability and license it to outside users.

The process was so challenging that they saw a need for an outside company to manage the process.

An example of how the process works is Lockheed Martin Aeronautics, which hired Fluid Innovation to commercialize software that handles the electronic distribution of up-to-date technical manuals to maintenance crews around the world.

Fluid Innovation matched Lockheed with Irvine, Calif.-based Jouve Aviation Solutions, which added it to its product suite. The software is now being used by the air force of the United Arab Emirates and will be rolled out to the Polish air force this year.

Fluid Innovation, which has five employees and an offshore development team in Brazil, is backed by $1 million from private investors.

Dallas commercial real estate investor Marc Goldman is one of them.

"I was intrigued by the business plan because it solves a big problem with an approach that works for all of the parties," Goldman said. "Virtual Ventures takes the process another step by using the Web to bring the two sides together."

Virtual Ventures will place several technologies from clients into the online market every week for review.

Players can research the offerings, make investments and post their opinions on the technology. The site is open to anyone, but the company is targeting developers, product managers, sales and marketing professionals and IT managers.

Players' findings will be published in the Virtual Ventures marketplace for potential buyers to consider. When a sale takes place, Fluid Innovation garners revenue.

The site tracks every technology through the commercialization process and tallies the winning investors.

Microsoft, which has stepped up efforts to license its internally developed code, thinks Virtual Ventures will help it reach a larger pool of IT experts.

"We liked it because it's such an innovative approach," said Bob Tenczar, Microsoft's director of licensing product management.

Tenczar thinks the social networking features, which allow gamers to post their ideas about the technology and wage debates, will help flesh out the offerings.

"The nature of intellectual property is often times it's not a finished product," he said. "So you or I might not recognize the potential, but there are a lot of people in the industry who have that knowledge. We're looking forward to their insight because it will be extremely valuable."

lhawkins@statesman.com; 912-5955