Innovation Pipeline

All university research spinoffs are not created equal. Some get timely guidance and financial backing and are able to overcome the odds.

Why is that?

The Kauffman Foundation and the Max Planck Institute of Economics decided to take a look. They studied new proof-of-concept models at the Massachusetts Institute of Technology and University of California at San Diego. They wanted to see why these programs surpass the typical success rate in early-stage company formation.

The proof-of-concept centers provide spinoffs with seed funding and other important advisory services to help students and faculty move forward with their market propositions. The two centers the report examined were the Deshpande Center at MIT and the William von Liebig Center at UC San Diego.

The major challenge facing startups is securing seed-round funding and subsequent financing rounds that typically cripples young companies. This is known as the funding gap.

The report says since the two centers were established, in 2002, they have awarded some $10 million in seed grants.

They also provide business resources. The report uses the term “catalysts”–volunteers who are members of the broader community who lend the skills much needed by the university spinoffs. “One thing that makes it work is community building,” says Carol Sardo, a program coordinator at the Deshpande Center at MIT.

Other universities are noticing. This past week Harvard University’s Office of Technology Development announced the launch of the second round of its Technology Development Accelerator Fund, designed to help propel emerging technologies from Harvard’s biomedical and life sciences departments into clinical development and the marketplace.

Among the innovations springing from this new technology accelerator fund were small molecule inhibitors licensed to Egenix, a privately held biotechnology company based in Millbrook, New York.

The fund was launched last year with $6 million in private donations. It too seeks to bridge the funding gap that faces most early-stage companies trying to get to proof-of-concept stage and gain funding. –Lee Bruno