Papers, Patents and …

Jack Brittain, PhDPierre Lassonde Presidential Chair

University of Utah

http://www.techventures.utah.edu/

Products

Economic Significance“The economic significance of the research university goes far beyond its role of education and training. For several decades, university research has increasingly formed the foundation of significant technological advancements. These technologies enter the marketplace through research collaborations with industry, licenses, and to an increasing extent, 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

MARKET EXPANSION

COMMERCIALLAUNCHPROTOTYPEPROOF OF

CONCEPTIDEA

Commercialization Stage

Where Universities Traditionally Add Value

Spinoff ValueGeneration

• Prototype • Incorporation• Logo/website• Corporate Secretary• CFO Solutions• Umbrella Insurance• Market research• Grants programs

Venture Bench Services

Small-Light-Fast Money

• Small amounts with immediatemilestones (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

PROTOTYPE

Commercialization Stage

Phase 5Long Term

Growth

Phase 4MarketEntry

• Marketing/Sales

• StrategicPartnerships

• New Products &IP in development

Phase 3Operating• Customers

Testing Product

• Investors• Key

Managers• Board of

Directors• Bank Credit

Phase 2Business• Business

Plan• Product

Validation• Product

development grants

• Angel & Seed Investors

Phase 1Formation

• Legal Formation

• Technology License

• Product Development

• Logo, web• Product

development grants

COMMERCIALLAUNCH

MARKETEXPANSION

Spinoff Value Generation

$5,000Micro Grant

$35,000 FoundationTechnology CommercializationGrant (2 times)

$40,000 UtahTechnology Commercializationand Innovation Program (3 times)

Up to $1.2 MillionFederal SBIR/STTR

$50,000 FoundationVirtual Incubator Program Grant

Up to $500,000Seed Funds, e.g. Kick Start

Total PotentialStartup Funding

$1,945,000($1,445,000 isGrant Funding)

Start-ups

Accelerators, Incubators and Start-ups

1970-2005 (36 years): 79 Start-ups• Average 2.2 per year

2006-2012 (7 years): 144 Start-ups• Average 20.8 Start-ups

1. 2005 Micro Grants2. 2006 Venture Bench3. 2009 Medical Device Accelerator4. 2010 Software Development

Center5. 2011 StaC Student Technology

Assistance Center6. 2011 DOE Energy

Commercialization Center7. 2012 Hospital Innovation Center

Tech Ventures TeamGlenn Prestwich

Presidential ProfessorPresidential Special Assistant

Entrepreneurial Faculty Scholars

Doug Lloyd/David DolanSerial Entrepreneurs

Entrepreneur in Residence

Commercialization

Troy D’AmbrosioSeasoned Entrepreneur

Raised CapitalDirector of Education Programs

Bryan Ritchie, Director and Associate VP25 fulltime professionals + 30 student interns

Technology Commercialization/Commercial ResearchResearch

Company

Seed Funds• KickStart• UpStart• Lineagen• Vendice• Navigen• Founder Fund• UVF

Ron Weiss, MDretired ARUP CEOFaculty Outreach

$300 millionfederal research

300 “Inventions” 120 Potential Licenses30 Potential Companies

≈420 faculty15% total faculty 5-8 faculty case load

> 2600 students > 100 business people

>$100 millionSoftware Dev CenterMedical Accelerator

Energy Comm. CenterVenture Bench

>$1.2 million

Leading Indicator: Investment

Grants as a Foundation for Investment

2005 2006 2007 2008 2009 2010 2011 2012$0

$200,000,000

$400,000,000

$600,000,000

$800,000,000

$1,000,000,000

$1,200,000,000

$1,400,000,000

$1,600,000,000

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

197019711972197319741975197619771978197919801981198219831984198519861987198819891990199119921993199419951996199719981999200020012002200320042005200620072008200920102011

0

5

10

15

20

25Start-ups

University Inventors, Startups, & RevenueRevenues

FY 2004

FY 2005

FY 2006

FY 2007

FY 2008

FY 2009

FY 2010

FY 2011

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$70,000,000

$80,000,000

$90,000,000

Commercial Research Commercial Clinical ResearchLicensing

FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 20110

20

40

60

80

100

120

140

160

180

Repeat Inventors New Inventors

Faculty Inventors

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

FY 2010Total External

Research Funds Spent in Utah

OperatingSpinoff

CompaniesTotal

Employment[1]

TotalAnnualPayroll

Total TaxContribution[2]

External ResearchFunding (total =$451 million)

$388 million 8,906 $378 million $33.4 million

TechnologyCommercialization(19 new in FY10)

150 19,818 $947 million $96.2 million

Total $388 million 150 28,724 $1.3 billion $129.6 million

[1] Bureau of Economic and Business Research, 2010 and 2011. Includes direct, indirect, and induced employment.[2] State and local taxes.

Utah Economic Impact fromUniversity of Utah Research

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 for the fact that as players in our innovation ecosystem, they’re willing to gamble on cash-strapped startups. At the end of the day, who else is offering to pick up the tab? … Warts and all, universities remain willing to pay patent costs to support expensive and increasingly sophisticated IP strategies for startups who will likely never be able to pay them back.” - Melba Kurman, Triple Helix Blog, 25 Feb 2011