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How to Accelerate University    Entrepreneurship andTechnology Commercialization        Adam Hoeksema     Co-Founder – Str...
New university business incubators, accelerators, and entrepreneurship programs areannounced every week in the United Stat...
Equity SalesUniversities also take ownership in startup companies. Recently, the University ofMichigan announced that it w...
MIT - Deshpande CenterMIT is one of the most entrepreneurial universities in the world. A report by the KauffmanFoundation...
Accelerating University EntrepreneurshipNo matter how you intend to derive revenue through entrepreneurship activities at ...
Students can help develop a marketing plan, implement a social media campaign,and develop video and written content to pro...
StringHubStringHub is a web-based platform that connects university student class projectswith real world applications and...
How to Accelerate University Entrepreneurship and Technology Commercialization
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How to Accelerate University Entrepreneurship and Technology Commercialization

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A brief ebook presented by StringHub on how universities can accelerate entrepreneurship on campus.

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How to Accelerate University Entrepreneurship and Technology Commercialization

  1. 1. How to Accelerate University Entrepreneurship andTechnology Commercialization Adam Hoeksema Co-Founder – StringHub October 2011
  2. 2. New university business incubators, accelerators, and entrepreneurship programs areannounced every week in the United States. It is clear that universities understand thatentrepreneurship is key to the future sustainability of higher education. With state andfederal budgets feeling the pinch year after year, universities are looking for ways togenerate revenue outside of tax dollars and tuition increases. Many colleges anduniversities are making significant investments in entrepreneurship.There are at least 3 ways that successful entrepreneurship programs can bring dollars backto the university:1. Licensing Income2. Equity Sales3. DonationsLicensing IncomeIncome generated through licensing university technology is hit or miss. The only personguaranteed to make money in the technology transfer process is your attorney. Despitethe challenges, many universities are hoping to hit it big like Stanford with Google or MITwith Akamai. A 2009 survey by the Association of University Technology Managersreported the top 10 U.S. technology transfer programs by licensing income as follows:1. Northwestern University, $161 million2. Columbia University, $154 million3. New York University, $113 million4. University of California System, $103 million5. Wake Forest University, $96 million6. University of Minnesota, $95 million7. University of Washington/Washington Research Foundation, $87 million8. University of Massachusetts, $71 million9. Massachusetts Institute of Technology, $66 million10. Stanford University, $64 millionLicensing university technology is major source of income for some universities, butthere are other ways to derive revenue through university technologycommercialization. blog.stringhub.com
  3. 3. Equity SalesUniversities also take ownership in startup companies. Recently, the University ofMichigan announced that it will be investing $50 million to develop innovativeideas about global challenges and opportunities as well as up to $25 million intoits own start-up businesses. Why are universities investing in equity positions instartup companies?Universities all want to hit the jackpot like Stanford University did in 2005 when itcashed in its position in Google for a reported $336 million.Donations from EntrepreneursThe final way that universities generate revenue through entrepreneurshipinitiatives is from donations from successful entrepreneurs. This is an interestingmodel. What would happen if universities stopped taking equity ownership androyalty fees and just started supporting promising entrepreneurs? If you trulysupported these entrepreneurs and helped them gain success without takingequity or royalties, would they ultimately build a more profitable business andthen donate to your university in larger amounts than you would ever earnthrough equity sales and royalties?Here is a list of recent donations to universities from entrepreneurs:• $48 million to Marian University – Founder AIT Laboratories• $300 million to University of Chicago - Founder of Dimensional Fund Advisors• $400 million to Columbia University – Founder of Metromedia• $600 million to California Institute of Technology – Co-Founder IntelThese donations all come from successful entrepreneurs who want to give back totheir alma mater. Of course there is no guarantee that successful entrepreneurswho you supported will give back to the university, but typically entrepreneurswant to give back to the organizations that made a positive impact in their life.Although it would take decades of testing to prove, universities may actually find abetter return on investment by relying on successful entrepreneur donations thanby taking equity positions and royalties from startup companies. In fact, MIT hasadopted this very strategy. blog.stringhub.com
  4. 4. MIT - Deshpande CenterMIT is one of the most entrepreneurial universities in the world. A report by the KauffmanFoundation, “Proof of Concept Centers: Accelerating the Commercialization of UniversityInnovation,” explores the Deshpande Center at the MIT School of Engineering. The DeshpandeCenter is a proof of concept center that “aims to accelerate the commercialization of innovationsout of the university and into the marketplace.” The Deshpande Center supports entrepreneursin 3 ways:• Funding• Advisory Services• Access to Student Innovation TeamsIn the first 5 years of operation the Deshpande Center has:• Awarded $7 million in grants to 64 projects• Spun off 10 startups• Startups employ 150 people• Spinouts have secured over $88 million in private investmentGreat support and great results right? So MIT must be taking ownership in these startupsright? Or taking a royalty fee on sales? No. Instead they are relying on future donations fromthe successful companies spun out of the center. blog.stringhub.com
  5. 5. Accelerating University EntrepreneurshipNo matter how you intend to derive revenue through entrepreneurship activities at yourcollege or university, you want to accelerate the process. What is holding mostbusinesses back from growth? Three of the most popular barriers to growth for anybusiness are: – Money – Marketing – ManagementNow as a university how can you support your startups in these three areas?Some universities make direct investments in university startups, but there are otheroptions.When it comes down to it startups need very little cash. What they need is access toservices and expertise in a wide range of areas.University Student Class ProjectsFortunately there are students working on class projects in many of these areas. Studentprojects could be used to support the growth of university startups. For instance, avideo production class could create a short promotional video, the public relations classcould write press releases and connect with reporters, the computer science studentscould build web applications and systems to support the business.Right now your university students are completing these projects anyway, but oftentimes the projects just go to waste. If the student class projects could be used tosupport startup companies and provide a real world learning experience for students atthe same time, you would create a win-win situation. blog.stringhub.com
  6. 6. Students can help develop a marketing plan, implement a social media campaign,and develop video and written content to promote the company. By utilizingthese student supports the entrepreneur can spend more time and resourcesworking to effectively manage employees and projects.For many businesses, simple class projects could drive major growth for thebusiness. For example, The Center for Project Excellence at the University ofDayton reports that over the past 25 years, “Nearly 300 completed projects haveresulted in documented savings of more than $25 million for the participatingbusinesses” Student class projects can have real economic impact on a local orregional economy.Removing Barriers to GrowthBy simply connecting university student class projects with businesses, you canlower the top 3 barriers to business growth.Money - startups require less funding because students provide services forexperience and class credit.Marketing - Marketing, public relations, social media, video production, anddesign students can support the startup’s marketing effortsManagement - When the entrepreneur can spend less time on raising capital andmarketing, they will have more time to focus on management and the strategicdirection of the company.So this all sounds good in theory, but it is not easy to implement such aprogram. You don’t have time to talk to 20 different professors and coordinateclass projects in all of their classes. Professors already have projects that they doevery year, and they won’t be interested in changing their projects. There is asolution. blog.stringhub.com
  7. 7. StringHubStringHub is a web-based platform that connects university student class projectswith real world applications and then manages the completion of the projectthrough an online work room where students, professors and businesses can sendmessages and attachments back and forth to complete the project.We believe that the StringHub platform will help universities accelerateentrepreneurship and technology commercialization on campus. The platform willhelp connect, structure, and expedite the process of connecting student projectswith university startups or other businesses.StringHub works like this:1. Professor posts a class project2. Businesses view and apply for open projects3. Professors determine which business applicants are a good fit for the class andassign students to each project4. Students, professors and businesses send messages and attachments back andforth to complete the projectWe are currently seeking individual professors and universities to beta test theplatform. At the time of publication there were 8 universities from 5 states aroundthe United States signed up to beta test the platform.We would be happy to discuss your needs and build a custom platform thatspecifically suits your university. Send questions to adam@stringhub.com andmake sure to check out our blog at blog.stringhub.com to learn more aboutinnovation in university entrepreneurship.Adam HoeksemaCo-Founder – StringHubwww.stringhub.com

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