It has been a big year for the US west coast. In California there has been a massive shake-up with UC Ventures and other new funds, while two of the biggest players in Washington and Arizona are beginning to see recent developments in their tech transfer offerings bear fruit.
California
It would be hard to pick a year over the past couple of decades during which innovation in California could not be described as exciting, but there have been some big stand-out moments over the past 12 months that are undoubtedly getting pulses racing in the state.
The main headline comes by the way of University of California. Following the overturning of a 25-year self-imposed ban on investing in its own spin-outs, the 10-campus university system launched UC Ventures, a $250m fund seeking to support both spin-outs and start ups from the early stage onwards.
Likely to be mostly spread across the institution’stop three campuses – Los Angeles, Berkeley and San Diego – the fund may act as a starting gun for other universities considering the creation of their own funds. However, UC Ventures is not the only large university venture fund to be raised in California this year. In February, future-tech focused institution Singularity University also raised a $50m fund focused on spin-outs and start ups coming out of the unaccredited Silicon Valley institution. Among fields the fund will support are biotech, nanotechnology and robotics although no investments have so far been reported.
It is a different story at Stanford. Since launching the Stanford StartX Fund last year, the fund, which is using the student-run incubator as a sounding board for its investments, made 29 investments totalling $13m in its first six months of operation. It has since gone on to take part in several larger rounds, including FranklyChat’s $12.8m venture round and Watchup’s series A at $2.8m.
Given Stanford’s strong entrepreneurial lineage, underlined by the enthusiasm for university venturing with the uncapped StartX fund, it may surprise some that the university’s office of technology licensing (OTL) does not involve itself with company creation.
“You will probably find us boring,” said Katherine Ku, director of the OTL in an interview with Global University Venturing. The OTL finds itself in a rather unique situation at Stanford ,where the high quality and quantity of research passing through the institution means the OTL has pretty much all it can handle, and focuses only on licensing the technology. The OTL does not even have to take a proactive stance in reaching out to academics to find potential customers. “If an academic has not heard of us, then one of their colleagues will let them know about us,” said Ku.
It is a different story down the coast at University of California Los Angeles (UCLA), which has launched another technology transfer operation. Westwood Technology Transfer, a non-profit organisation, will support and expand on UCLA’s office of intellectual property and industry-sponsored research. Westwood has been the product of four years of analysis and internal discussion at UCLA with the aspiration of transferring more technology from academics to the wider world.
Arizona’s tech transfer scene is dominated by University of Arizona and Arizona State University (ASU). In last year’s report on the west coast, we focused mostly on the work being undertaken to transform ASU’s approach to technology transfer – an approach which has kept our reporters busy with news throughout 2014 as it goes from strength to strength.This time around, we will take a closer look at University of Arizona’s fresh approach to commercialisation.
Coming from a tech transfer background which includes the Colorado university system, Ohio University, Penn State, and Ohio State University, Allen finds himself in the somewhat enviable position of reporting directly to the institution’s president, Ann Weaver Hart, allowing Allen and the TLA team to put commercialisation firmly on the university’s agenda.
TLA began by combining a traditional tech transfer operation, the university’s two tech parks – which include Arizona’s incubator – and corporate relations. Thanks to additional resources, it has since been able to build a network around itself called the Wheel House, a group of 800 people and growing, which can provide mentoring on entrepreneurship on all matters from technical to leadership.
TLA also has a proof-of-concept fund to back its initiatives, with roughly $700,000 a year allotted to it, and has backed around 40 companies since Allen came on board. The fund works by using expertise drawn from the Wheel House group liaising with faculty members, ahead of putting together a proof-of-concept proposal directed towards the potential marketplace.
Allen said: “It is not just letting the faculty tell us what they think their technology can do, but bringing them into a conversation with other people and together setting the design and work that is being done under proof-of-concept. From the very beginning [of TLA], we tried to find people who can help the academics and help us find where the quality lies, what steps are necessary, who we need to be talking to, and what the objectives of the patent are.”
TLA also reaches out to the university’s student population with a team of student ambassadors. In particular, the TLA seeks to involve itself with students working in labs who could generate intellectual property.
Although the programme has run for only two years, it has begun to bear fruit. During the first full year of operation, TLA generated 39 exclusive licences, 11 start ups – rising from three from the year before TLA – and disclosed 188 inventions.
Looking forward, TLA is also in the process of raising its own venture capital fund. Setting up as a non-profit company called Capital Corporation, the university is hoping to raise $10m for the fund and has already secured $2.5m of matched funding from Thomas R Brown Foundations. The fund is a donor-based fund, and is aiming first to become an evergreen fund. Once it hits this target, proceeds will be split 15:85 between TLA and the donors’ desired destinations.
Allen added: “If the donor says ‘I am interested in this going to the college of engineering’, it goes to the college. So the money that comes in from the foundation never leaves the university.”
Another university undergoing change is University of Washington, the primary university for tech transfer in the state and ranked number eight in our inaugural rankings of tech transfer offices.
Classically a licensing office, the university’s Centre for Commercialisation (CFC) has switched its focus over the past five years to generating spin-outs from the institution.
“We have been very successful at that,” said Vikram Jandhyala, vice-provost for innovation. “For 2013-14, we had 18 start ups coming out, and the year before it was 17, all of which are either venture funded orangel funded, and a much larger number than we have had in the past.”
One aspect that Jandhyala attributes to the overall success at Washington has been the creation of an incubator on campus which allows faculty to keep a close relationship with spin-outs while continuing their work for the university. The model allows researchers to advise on a project’s early stage much more closely, and also opens the door for researchers to pick up business skills and perhaps lead a company. The programme has been so successful that it is consistently at capacity, and the CFC team are now having to look at other options to grow incubation space at Washington.
The CFC is also championing efforts to foster entrepreneurship across the campus. Currently, there is plenty of activity at student level around the business school, but the CFC is driving for entrepreneurship to be taught across all schools at Washington, thus extending the skillset to a wider number of people with the hope this will generate more student start ups and, later, more spin-outs.
Washington finds itself with plenty of corporate partners in close proximity. Microsoft, Intel, Amazon and Boeing all have well-established bases in Seattle, and have recently been joined by Google, Facebook, Apple and others as the city expands its tech horizons. To tap into this partnership potential, a new building has opened just off the university campus for student start ups, which has attracted established programmes such as TechStars, and is open to Washington students as well as other student bodies in the area.
The university has had a lot of success in reaching out to the venture community in California’s San Francisco Bay area, with about a third of its external funding attracted from Silicon Valley and the surrounding cities, and the remainder stemming from more local sources. The CFC also has access to the W Fund, a $20m university venture fund established to support innovation coming out of the institution, a small fund involving angel supporters and aimed at the early stage. The university also has good relations with Arch Venture Partners, which raised $400m in its latest fund earlier this year, and the Washington Research Foundation (WRF) and its investment unit WRF Capital, which has strong ties to University of Washington.
WRF is not only an investor in Washington spin-outs, but also licenses technology from the university on a regular basis. It also makes regular gifts to the university’s faculties, as well as providing gap funding to help innovations cross the “valley of death” – helping around 20 programmes a year.
The CFC is also hoping to replicate the bond between the institution and the WRF by looking to partner corporates operating in the area. Jandhyala said there had been attempts to build stronger bridges between the CFC and corporate venturing units. However, most corporate venturers will take only one or two start ups under their wing. To help fosterties, the CFC is beginning discussions aimed at building joint incubators with corporates in and around the Washington campus to entice more companies to get involved at the early stage.
Stanford University Office of technology licensing
University of Nevada Reno Tech transfer office
Arizona State University Arizona Technology Enterprises
Northern Arizona University NAU Innovations
University of Arizona Office of technology transfer
Oregan State University Office for commercialisation and corporate development
Washington State University Office of commercialisation
University of California Berkeley Office of intellectual property and industry research alliances
University of California Irvine Office of technology alliances
University of California Los Angeles UCLA office of intellectual property and industry-sponsored research/Westwood Tech Transfer
Stanford University Stanford StartX Fund Uncapped
University of California UC Ventures $250m