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An emerging approach to identifying, funding and commercializing university-based innovation is proving quite effective at seeding new companies, according to research conducted by the Ewing Marion Kauffman Foundation and the Max Planck Institute of Economics.
Kauffman Foundation analyzes new approach to moving university innovations to market and filling Seed-Stage funding gap. According to the Foundation, “proof of concept centers” are an effective vehicle to help launch the commercialization of university innovation and to fill the seed-stage funding gap for new technologies.
Proof of concept centers provide seed funding to university-based early stage research as well as a host of advisory services and educational initiatives to assist students and faculty with market research, mentoring, development and testing of innovations, preparation of business plans and connections to the commercial market.
The report examines two such centers, the Deshpande Center at MIT and the von Liebig Center at the University of California San Diego.
According to researchers, since the two centers’ creation in 2002, they have collectively awarded nearly $10 million in seed grants and launched 26 seed-stage companies that have accumulated more than $159 million in private capital. Both centers are funded from philanthropic donations.
The lessons learned from the proof of concept study have led the Kauffman Foundation to form a network that will bring centers together to study best practices, establish metrics and define points of future research. The Deshpande and von Liebig centers will be founding members of the new network.
The report also provides an outline for other universities to use in replicating proof of concept centers.
According to the report, a successful proof of concept center benefits from locating at universities that produce innovative and marketable technology, are located within a strong external network of investors and innovators and have an administrative team and advisors with a depth of commercialization expertise. A unified approach of providing seed funding, advisory services with industry connections and educational initiatives also is vital to ensure the commercialization of university technology.