When Scott Vanderbeck started Organic Research Corp., he was focusing on developing technology that would teach computers to identify fatty liver disease from liver biopsies more efficiently and accurately than doctors could.
Now, he’s finding there’s application in the technology for a whole lot more.
“We learned there’s a lot of people who would use the same technology but don’t necessarily look at livers,” Vanderbeck said. “The goal is absolutely to go bigger.”
Vanderbeck’s work, developed at the University of Wisconsin-Milwaukee and funded in part by a UW Extension seed fund, illustrates a growing push in Wisconsin’s education system to develop a research-based technology economy in the Milwaukee area.
Leaders at educational institutions in southeastern Wisconsin are working on building a collaborative environment that would compete with the long-standing research hub in Madison and support tech innovators taking their products to market.
“We do have a lot of intellectual horsepower and intellectual capital,” said David Linz, who directs the UW Extension’s Center for Technology Commercialization. “We need to be able to translate that to a commercial value.”
Vanderbeck’s start-up is one of three at UWM that received a second round of funding — up to $50,000 each — from UW Extension’s Ideadvance Seed Fund this month. Two others from UWM also received first-time grants of up to $25,000.
Money from the seed fund, available at four-year campuses other than UW-Madison, goes to help develop a business model for complicated prototypes and technology developed by research teams. The program was launched in 2013 with a total of $2 million made available to give out to start-ups, and had a balance of $1.5 million at the beginning of 2015.
“It definitely puts in a lot of the necessary seed capital that’s hard to find,” Vanderbeck said about his grant. “The resources for me have been unbelievable.”
As proposed, Ideadvance was to support about 40 stage-one and about seven stage-two applicants. To date, the fund has awarded 28 stage-one grants and four stage-two grants.
Seed funds at universities are nothing new. Schools across the country have been pulling together similar programs to invest in tech-based start-ups for years.
Some, such as the University of California and the University of North Carolina, unveiled multimillion-dollar funds to make venture capital investments, with returns reinvested in the fund for investments in other start-ups. Those programs, however, drew criticism for putting too much university money into high-risk investments.
The University of Minnesota took another approach, creating a seed investment program that offers start-ups up to $350,000 in equity financing. Companies are eligible only if they find a matching investment from an outside investor.
The Ideadvance Seed Fund, created in partnership with the Wisconsin Economic Development Corp., is similar to the University of Minnesota’s model, although the UW System is not allowed to take equity positions. Lisa Johnson, vice president of entrepreneurship and innovation at WEDC, said there’s interest in changing that.
“We’ve got to start making people believe that they can take money out of the university system and build a company,” Johnson said.
The Ideadvance fund is just one sliver in a much larger entrepreneurial ecosystem in Milwaukee.
Marquette University is also working on building its research core, with President Michael Lovell announcing an ambitious goal this month to double research funding at the school in the next five years.
Lovell also put Jeanne Hossenlopp, formerly the dean of Marquette’s graduate school, in a new position to focus on research and offer support in commercializing patents and start-ups.
“We need to get more ideas into the pipeline,” Hossenlopp said. “They’re not necessarily going to know how the market works.”
Part of that strategy means pulling resources from across research facilities in the area to help strengthen the Milwaukee economy, something that’s been in the works for a number of years.
Groups such as the Clinical & Translational Science Institute are trying to bring together the big biomedical research institutions of the area — including Marquette, UWM, the Milwaukee School of Engineering and the Medical College of Wisconsin — in hopes of amping up innovation in the medical field.
The institutions also launched a nonprofit called The Commons this fall, a center in downtown Milwaukee covering 19 colleges and universities from the area working to provide a place for entrepreneurs to share ideas and solve problems in the city.
But these programs also have met with another obstacle: getting institutions that have historically competed against one another to work together.
“Learning how to collaborate is one of the big challenges in Milwaukee,” Hossenlopp said.
Unlike Madison, Milwaukee’s size warranted a bigger number of research groups to emerge, resulting in the system now in place. The UW-Madison campus didn’t have the same fragmentation and built up its research core 70 years ago with a number of hits, including vitamin D pharmaceuticals and Warfarin pesticides.
“Those form the basis of licensing revenue that can go back to the university,” Johnson said. “And then it just feeds on itself.”
UW-Madison is now the fourth-largest research university in the country, spending more than $1.1 billion on research, according to the National Science Foundation.
In terms of patents awarded to investors in the area, the Milwaukee metro area had the highest count of patents granted to Wisconsin residents last year at 644, beating out the Madison area’s 452, according to data from the U.S. Patent and Trademark Office.
But that doesn’t take into account the size of the cities. When adjusted for population, Madison’s patent count has been almost double that of Milwaukee’s over the past couple of years.
Milwaukee gets many of its patents through its big corporations, such as GE Healthcare, Rockwell Automation, Briggs & Stratton Corp. and Johnson Controls Inc.
The big player in Madison’s count, though, comes from the Wisconsin Alumni Research Foundation, UW-Madison’s tech transfer agent. In 2013, WARF listed more than 150 patents, ranking it at the top of schools for patent grants in the country.
By comparison, the patent office reported only two patents granted to Marquette in 2013, four to the Medical College of Wisconsin Research Foundation and one to UWM’s patent organization, the WiSys Technology Foundation.
As the transition to a knowledge-based economy has become a focal point for Milwaukee institutions, UW Extension’s Linz said the interest in collaborating on research has been reaching a “critical mass” that is starting to gain traction.
“It has to bubble up before it starts to get on people’s radar screens,” he said.
WEDC’s Johnson believes a collaborative approach eventually could create the environment for a boom in Milwaukee, so long as entrepreneurs lead the transition.
“There’s always competition between entities and questions about how they understand their role,” she said. “But the goal is to be competitive globally, not to compete against one another.”