Monday, July 9, 2018
From new cancer therapeutics to virtual reality surgical tools, innovations created at Virginia Commonwealth University represent not only economic opportunities for the Richmond region, but can have the potential to improve health care and save lives around the globe.
To bring more of these innovations to market, VCU has created a new office, VCU Ventures, which will develop programs, influence policies and work with regional partners to create startups around intellectual property developed by VCU faculty and staff.
“As a research university, we have a responsibility to try to translate our research into commercially viable products or services — a point where they can benefit society,” said Nicole Monk, director of VCU Ventures, which is located within the Office of Research and Innovation.
VCU has long worked with established industry partners with the resources and experiences to bring intellectual property created at the university to market. However, technology emerging from VCU is often in too early a stage or too disruptive to attract interest from larger, more established companies.
In those cases, Monk said, startups are a perfect fit.
“Supporting startup activity allows us an alternative commercial pathway that can expand our impact on both society and the local economy,” Monk said. “That’s where VCU Ventures comes in.”
VCU President Michael Rao, Ph.D., said VCU Ventures will benefit the university, the Richmond region and beyond.
“This initiative will advance VCU’s long-standing mission of serving the public good by fostering startup activity, matching and attracting talent to technologies, and ensuring that we have transparent processes that help people look to us as a pipeline,” Rao said. “All of this will help VCU-created [intellectual property] make it to market quicker, where it can help more people. That is central to our mission as a public research university.”
As part of the launch of VCU Ventures, the office is rolling out new licensing terms that are among the most favorable of any university in the country, Monk said. In many cases, she said, universities inadvertently burden fledgling companies with well-intended, but weighty contractual obligations that may handicap the startup later as it tries to find investors, hire staff and form product-development partnerships with other companies.
VCU’s “Founders First Express License” includes a small ownership interest in the company, allows for sublicensing and forgoes all royalties, sublicensing fees and milestone payments that can be burdensome to a cash-strapped startup.
“Startups represent a unique commercialization pathway — so the programs, resources and terms we offer need to reflect that,” Monk said. “These terms are bold and send a clear signal to entrepreneurs and investors that VCU is open for business.”
Paul Nolde, director of business development at Richmond venture capital firm NRV, agrees. Startups based on university technology often have trouble raising private capital due to financial strings outlined in university licenses, Nolde said.
“With some of these constraints now lifted for VCU-incubated technologies, the university is demonstrating a clear commitment to, and appreciation of, advancing Richmond's entrepreneurial community on a local, regional and national scale,” he said. “VCU now has the opportunity to play a lead role in strengthening the commonwealth’s innovation economy.
“In coming up with this new funding approach, VCU and VCU Ventures are sending a clear signal: They are providing entrepreneurs with maximum flexibility to be able to raise follow-on investor capital,” he said.
According to Monk, her team did a listening tour with faculty members, seasoned entrepreneurs, investors and others to outline terms that would set new ventures up for success.
“These terms are designed to be executed quickly for the benefit of the startup,” she said. “They’ll also allow entrepreneurs to be more comfortable executing a license option and investing their own time in evaluating a particular technology, because they have a clear understanding of the licensing terms up front.”
Startups represent a unique commercialization pathway — so the programs, resources and terms we offer need to reflect that These terms are bold and send a clear signal to entrepreneurs and investors that VCU is open for business.
Art Espey, a local entrepreneur, praised VCU’s new licensing terms and believes it sets a tone for how innovative VCU can be.
“The new terms are much more amenable to entrepreneurs and startup companies,” he said. “It allows these companies to commercialize university research on terms that startups can afford and that the university will benefit from in the future. It is a drastic change, in less than a year, from a pretty staid position. Large institutions are very resistant to change, so it is not an understatement to say that many in the entrepreneurial community, particularly investors, are shocked and excited by the speed in which VCU made these changes.
“This major change in technology transfer moves VCU to the front of the pack, a national contender, in regards to potential commercialization of technology,” Espey said.
Beyond favorable licensing terms, VCU Ventures will work to match talent in the Richmond region’s entrepreneurial community to technologies created at VCU. The office is planning to roll out a variety of programs that will allow potential founders to evaluate the startup potential of promising technologies at little to no risk — including pre-acceleration programs, funding opportunities, co-working space and more.
“Licensing terms are just one piece of the puzzle,” Monk said. “To harness the full economic benefit of our activity, we must also focus on building a regional ecosystem that can sustain the innovation and talent we produce here at VCU.”
This major change in technology transfer moves VCU to the front of the pack, a national contender, in regards to potential commercialization of technology.
Carrie Roth, president and CEO of Activation Capital, said the launch of VCU Ventures sets the tone for how a university can be a leader in bringing ideas to the marketplace with the most opportunity for success.
“Any vibrant entrepreneurial ecosystem must have a research university that understands the value of transforming an economy through innovation,” she said. “Creation of this office focused on startup activity, one that is already so engaged with the local ecosystem, will catalyze activity we haven’t yet seen. It demonstrates VCU’s commitment to being a regional anchor and reflective of the evolution of our innovation economy.”
Monk agreed, saying that the creation of this office is a natural next step and helps to expand and define VCU’s role in the Richmond region’s entrepreneurial network.
“The da Vinci Center serves as a central hub of student innovation and entrepreneurship, an effort that is putting VCU on the national map,” she said. “VCU Ventures now represents a sister office dedicated to innovation and entrepreneurship based on faculty and staff activities. While these technologies are more complex and sometimes take longer to bring to market, they’re the kind of innovations that are going to save lives. It’s an important and exciting addition to VCU’s bigger picture approach to innovation."