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Papers, Patents and … Products Jack Brittain, PhD Pierre Lassonde Presidential Chair University of Utah http://www.techventures.utah.edu/
Economic Significance“The economic significance of the research university goesfar beyond its role of education and training. For severaldecades, university research has increasingly formed thefoundation of significant technological advancements.These technologies enter the marketplace through researchcollaborations with industry, licenses, and to an increasingextent, university-driven efforts to turn new ideas into start-up companies.” Jan Crispin, Senior Research Economist. The Economic Impact of Startup Companies and Invention Licensees Originating from Research at the University of Utah. Bureau of Economic and Business Research, 2011.
Technology Value Curve Spinoff Value Generation Venture Bench Services • Prototype Where UniversitiesTraditionally Add Value • Incorporation • Logo/website • Corporate Secretary • CFO Solutions • Umbrella Insurance • Market research • Grants programs PROOF OF COMMERCIAL MARKET IDEA PROTOTYPE CONCEPT LAUNCH EXPANSION Commercialization Stage
Small-Light-Fast Money• Small amounts with immediate milestones (4 months or less) money chases success as milestones accumulate• Light regulation and administration little administrative overhead in making awards universities recommend accountability is for university’s portfolio results• Fast decisions sustain technology development momentum, facilitate continuity of effort
Spinoff Development Spinoff Value Generation Phase 1 Phase 2 Phase 3 Phase 4 Up to $500,000Formation Business Operating Seed Funds, e.g. Kick Start Market• Legal • Business • Customers Entry Total Potential $50,000 Foundation Formation Plan Testing • Marketing/• Technology Virtual Incubator Program Grant • Product Product Startup Funding 5 Phase Sales License Up to $1.2 Million Investors Validation • • Strategic $1,945,000 Term Long Federal SBIR/STTR• Product • Product • Key ($1,445,000 is Partnerships Growth Development development $40,000 Utah Managers • New Grant Funding)• Logo, web grants • Board of Technology Commercialization Products &• Product • Angel & and Innovation Program (3 times) Directors IP in development $35,000 Foundation • Bank Credit Seed development grants $5,000 Investors Technology Commercialization Micro Grant Grant (2 times) COMMERCIAL MARKET PROTOTYPE LAUNCH EXPANSION Commercialization Stage
Accelerators, Incubators and Start-ups 1. 2005 Micro Grants 2. 2006 Venture Bench1970-2005 (36 years): 79 Start-ups 3. 2009 Medical Device Accelerator • Average 2.2 per year 4. 2010 Software Development2006-2012 (7 years): 144 Start-ups Center • Average 20.8 Start-ups 5. 2011 StaC Student Technology Assistance Center 6. 2011 DOE Energy Commercialization Center 7. 2012 Hospital Innovation Center Start-ups
Tech Ventures Team Glenn Prestwich >$1.2 million >$100 million Presidential Professor Presidential Special Assistant Software Dev Center Seed Funds Entrepreneurial Faculty Scholars Ron Weiss, MD Medical Accelerator • KickStart retired ARUP CEO Energy Comm. Center • UpStart ≈420 faculty Faculty Outreach Venture Bench • Lineagen 15% total faculty 5-8 faculty case load • Vendice Troy D’Ambrosio • Navigen Seasoned Entrepreneur Doug Lloyd/David Dolan • Founder Fund Serial Entrepreneurs Raised Capital Entrepreneur in Residence • UVF Director of Education Programs > 100 business people > 2600 students Bryan Ritchie, Director and Associate VP 25 fulltime professionals + 30 student interns Research Technology Commercialization/Commercial Research $300 million 300 “Inventions” 120 Potential Licensesfederal research Commercialization 30 Potential Companies Company
Leading Indicator: Investment
Grants as a Foundation for$1,600,000,000 Investment$1,400,000,000$1,200,000,000$1,000,000,000 $800,000,000 $600,000,000 $400,000,000 $200,000,000 $0 2005 2006 2007 2008 2009 2010 2011 2012 Cumulative Grants Funding Cumulative Investment Funding Value Private Companies
Net Results• Spanning Valley of Death • The Gully of Inconvenience• Leverages investor dollars• Community engagement • Student Opportunities: Pole Vault Media • Entrepreneurs In Residence • Commercialization Advisory Board/Company Collaborations
Total Mission Integration• Educational programs > 2600 students Defining educational experience Huge positive for faculty• Donor gifts over $35 million Lassonde Center Sorenson Discovery Center Annual sponsorships over $1 million• University Venture Fund manages $18.5 million in Fund I Fund II target is $30 million
Returns from Commercialization• Dollars are in – Equity and royalties – Research back to the University – Donations and other support• Industry-sponsored research yields more than license income
Utah Economic Impact from University of Utah Research Total External Operating Total FY 2010 Research Funds Spinoff Total Annual Total Tax Spent in Utah Companies Employment Payroll ContributionExternal ResearchFunding (total = $388 million 8,906 $378 million $33.4 million$451 million)TechnologyCommercialization 150 19,818 $947 million $96.2 million(19 new in FY10)Total $388 million 150 28,724 $1.3 billion $129.6 million Bureau of Economic and Business Research, 2010 and 2011. Includes direct, indirect, and induced employment. State and local taxes.
What Worked for Utah• Leverage/OPM – Grants – Donors – Effort• Fund Critical Paths – Monitor milestones – Do not fund “no results” – Post performance funding: money chases success• Outcomes depend on shots on goal – control strangles speed and momentum – place small bets with immediate milestones• Capital formation is about outcomes
Reinvented University Commercialization• Changed from cost recovery to investment model – Cost recovery is inevitably a failure – Changed the nature of our work to the positive• Commercial sponsored research = sustainable business model• Total mission integration = strategic engagement• Evolved structure
Universities and the Innovation Ecosystem“Universities do not get enough credit forthe fact that as players in our innovationecosystem, they’re willing to gamble oncash-strapped startups. At the end of theday, who else is offering to pick up thetab? … Warts and all, universities remainwilling to pay patent costs to supportexpensive and increasingly sophisticatedIP strategies for startups who will likelynever be able to pay them back.” - Melba Kurman, Triple Helix Blog, 25 Feb 2011