So This Happened Last Week…
1)FINALLY, my home state of MN, is starting to look at supporting gap funding of technology and start-ups (along with some great R&D incentives for industry collaborations). A recently-proposed, one-time investment of $500,000,000 would launch the state’s Innovation, Research, and Development Fund. It would join the other (in our estimation) 26 states with such programs. These innovation funds generally come from one of the following sources:
- Pooled agency operating budgets towards strategic or politically motivated technology and industry priorities (e.g. cleantech, life sciences, healthcare, etc.)
- Re-investment from tax revenue, legal settlements, or other windfall
- Small percentage of state pension or other strategic investments (with associated ROI expectations
States represent one of the most natural partners in early stage technology development and commercialization because their primary motive of economic development, not direct return on investment,often aligns better with the risk involved in seeding new, breakthrough industries. Additionally, their motivation to support closely associated programs at their educational institutions, can make them a good partner through capital dedicated towards gap funding programs.
The struggle is real in that in most cases, state-supported programs are competing against other near-term public programs or priorities and under constant pressure to produce. Agencies, legislatures and leaders that champion these funds must understand the breadth of gap funding opportunities, their corresponding time horizons, and manage expectations accordingly. It is also important to make sure that the impetus of the fund is strategic, rather than political, as a successful effort must operate above partisan lines.
What are your experiences with state-supported gap funds? Have you found the “silver bullet” for sustainability? We would love to hear from you!
2)Someone cyberinked what most of us have observed: Start-ups that work with venture capital firms perform better. But, it’s not necessarily for the money. In a recent post, titled Venture Capital: The University’s Partner Not Banker, we wrote about the auxiliary support that these firms bring to university start-up success.
While just a small percentage of the total venture activity, the role that seed-stage venture capital has and should play in theearly development of research institution start-ups should not be discounted. More than the capital itself, venture firms bring a wealthof market knowledge and networks of management talent and business connections. Research institutions can take advantage of this resource by strategically integrating seed stage venture firms into their operation, especially in evaluatory and advisory functions. Active relationship-building between research institutions and the venture capital community supports operations, orders start-up priorities, and strategically directs limited development capital in the near-term, while setting up the possibility for later investment.
Other Stuff to Know…
1)Proud to meet a support and advocacy milestone of 150 research institutions that are currently using the Mind the Gap Report to support their gap funding program pitches. Thank you for your leadership in the optimization of gap funding in early-stage innovation!
2)We will be holding six web-workshop series throughout 2016/17 that will detail the “how tos”:. Events will be 60-90 minutes with full access for your entire university/organization (get now on discount through the Fund Manager Package):
- Create and Manage a Proof of Concept Gap Fund
- Create and Manage a Start-up Investment Gap Fund
- Secure and Sustainin Gap Funding Support from Your State and Region
- Turn “Friends of the University” into Gap Fund Investors
- Capture and Report Results that Matter to Stakeholders
- Attract External Investors to Gap Funded Projects and Start-ups
Just finished our 4 out of 6 events focused on emerging themes and tactics in University-Industry collaboration, which is bringing forward interesting intersections between technology transfer and development offices in supporting gap funds through corporate and alumni support
This is a new way of communicating our weekly gap funding news. What do you think?