Spinning off from a big company doesn't have to mean severing all ties: take I. L. Med, in Walpole, Mass. Once part of a division at Johnson & Johnson, the business was bought out by a manager who concluded he could find financing ($3.2 million in venture capital so far) and go after fragmented markets better as an independent. Still, a quarter of the company's sales of microsurgical lasers this year will come from distribution by -- guess who? -- the former parent.

-- Leslie Brokaw