Prevent A Rabbit Problem: Setting Expectations for Your University Technology or Start-up Gap Funding Program
How many of you fund mangers hear this question from leadership, stakeholders, legislators or the media within the first three years of your technology or start-up gap funding launch?
So, where are the financial returns?!
From our experience, there is nothing more critical to the sustainability of a technology and start-up gap fund than setting expectations before the first penny is even raised. And those expectations should not be based on financial return alone, especially in proof of concept or early start-up formation funds.
This is hard. Money talks. To create momentum for any gap fund type, its’ the obvious carrot to dangle out to potential backers. It’s also the one that may leave you with a rabbit problem. And they will just keep multiplying and piling on!
University gap funding programs have a much broader impact than financial return alone, and are more appropriately assessed on their ability to improve the innovation capability and landscape surrounding research institutions and affiliated community.
We found when analyzing 82 of these funds from 51 research institutionsthat most immediate and near-term returns of technology and start-up gap funds are better represented in their ability to catalyze the commercialization process, to build support communities that can assist in the development of funded projects, and to convert those projects into commercial entities that create jobs and enrich local and regional economies; but, perhaps the most exciting observation is that gap funding programs are playing a direct role in attracting outside capital and expertise.
We suggest a structure for measuring gap funding impact, both financial and programmatic, that gap fund programs and managers can use to better demonstrate the impact of their program and set expectations. These measures align gap funding practices with the mission of the research university, and other public and private sources of early stage capital, while demonstrating how the practice supports innovation and commercialization on a larger scale.
These suggested impact measures for gap funding can be separated into five focus areas:
- Catalyzing the Commercialization Process
- Growing a Community of Innovation
- Building Businesses and Creating Jobs
- Attracting Capital and Expertise
- Returning Capital to the Gap Funding Program
Or like this,
Note: Of course this is easier said than done, but at least you will be coming from a place of strength through truth. When stakeholders buy into this vision, you will have more freedom to operate for five years and can focus fully on showing returns in all five impact horizons.
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