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Innovative Regions

18 November 2014

Tech Transfer Regions: West US

It’s been a big year for the US West Coast. California has seen a massive shakeup with UC Ventures and other new funds, while two of the biggest players in Washington and Arizona are beginning to see recent shakeups in their tech transfer offerings begin to bear fruit.

Author: Gregg Bayes-Brown, editor

California

It’d be hard to pick a year over the past couple of decades that innovation in California couldn’t be described as exciting, but there has been some particularly big standout moment over the past 12 months that are undoubtedly getting pulses racing in the state.

The main headline comes by the way of the University of California. Following the overturning of a 25-year self-imposed ban of investing in its own spin-outs, the 10-campus strong university system launched UC Ventures, a $250m fund looking to support both spin-outs and startups alike from the early-stage onwards.

Likely to be mostly spread across the institution’s top three of Los Angeles, Berkeley, and San Diego, the university venture fund may act as a starting gun for other universities looking at creating their own funds. However, UC Ventures isn’t the only large university venture fund to be raised in California this year. Back in February, future-tech focused institution Singularity University also raised a $50m to be focused on spin-outs and startups coming out of the unaccredited Silicon Valley institution. Technologies Singularity’s fund will back include biotech, nanotechnology, and robotics.

Singularity is yet to report any investments from the fund, which should have completed its raise by half way through the year. However, 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 operations. 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 Office of Technology Licensing (OTL), Stanford’s tech transfer office, doesn’t involve itself with company creation.

“You’ll 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 that the OTL has pretty much all it can handle, and only focuses on licensing out technology. The OTL doesn’t even have to take a proactive stance in reaching out to academics to find potential customers. “If an academic hasn’t heard of us, then one of their colleagues will let them know about us,” said Ku.

It’s a different story down the coast at the University of California Los Angeles, which has launched a fresh technology transfer office. Westwood Technology Transfer, a non-profit organisation, will support and expand upon the Office of Intellectual Property and Industry Sponsored Research, UCLA’s existing tech transfer office. Westwood has been the product of four years of analysis and internal discussion at UCLA with the aspiration of transferring more technology from UCLA’s academics out into the wider world.

UCLA, which ranked the highest out of its system’s campuses and its west coast peers in our inaugural tech transfer rankings, also saw the development of Kite Pharma, oncology firm and GUV’s 2013 Deal of the Year, come to fruition in July. The firm, which is developing immunotherapy treatments for cancer, flew past its initial target of $115m in its initial public offering, reaching $128m overall.

Arizona

Arizona’s tech transfer scene remains to be dominated by the University of Arizona and Arizona State University (ASU). In last year’s visit to 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’ll be taking a closer look at the University of Arizona’s fresh approach to commercialisation.

The institution has recently undergone a shakeup in the way it approaches tech transfer. Launching its TTO programme Tech Launch Arizona (TLA) two years ago in 2012, the initiative consolidated three units from around the university involved in commercialisation under one roof and with new leadership in the form David Allen, vice president of TLA.

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.

“The direct report to the president is significant because we’re involved in issues both strategic and tactical at the cabinet level,” said Allen. “This allows us to infuse tech commercialisation into the discussions early rather than being an afterthought.”

TLA began by combining a traditional tech transfer operation, the university’s two tech parks (which includes Arizona’s incubator), and corporate relations. Thanks to its 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 mentorship 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.

“It’s 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’s being done under proof-of-concept,” said Allen. “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. Particularly, the TLA looks to involve itself students working in labs who could potentially generate intellectual property.

Although the programme has only run for two years with only one year end-to-end, it has begun to bear fruit. During that first full year of operation, TLA generated 39 exclusive licenses, 11 startups (rising from 3 from the year before TLA), and had 188 invention disclosures.

Looking forward, TLA is also currently in the process of raising its on 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 to first become an evergreen fund. Then, once it hits this target, proceeds will be split 15/85 between TLA and the donors’ desired destinations.

“So the donor says ‘I’m 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,” explained Allen.

 

Washington

Another university undergoing change is the University of Washington, the primary university for tech transfer in the state of Washington and ranked number eight in our inaugural rankings of tech transfer offices.

Classically a licensing office, the university’s tech transfer office Centre for Commercialisation (CFC) has switched its focus over the past five years to generating spin-outs coming out from the institution.

“We’ve been very successful at that,” said Vikram Jandhyala, vice provost for innovation. “For 2013-14, we had 18 startups coming out, and the year before was 17, all of which are either venture funded or angel funded, and a much larger number than we’ve 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 whilst continuing their work for the university. The model allows researchers to advise on a projects early stage much more closely, and also opens the door for researchers to pick up some 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 further grow incubation space at Washington.

The CFC are also championing efforts to foster entrepreneurship across campus. Currently, there is plenty of activity happening at the student level around the business school, but 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 that this will generate more student startups and, later on, more spin-outs.

Washington finds itself with plenty of corporate partners in close proximity. Microsoft, Intel, Amazon, and Boeing all already 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 just been opened just off the university campus for student startups which has attracted established programmes such as TechStars, and is open to Washington students as well as other student bodies from the local area.

“It’s a very exciting time,” said Jandhyala. “The government is committed, we have a university president who very supportive of everything to do with entrepreneurship and startups and who believes that building the economy is a large part of what a university’s mission should be, and we have a venture community which is small but very focused.”

The university has had a lot of success in reaching out to the venture community around California’s bay area, with about a third of its external funding attracted from Silicon Valley and the surrounding cities with the remainder stemming from more local sources. CFC also has access to The W Fund, a $20m university venture fund established to support innovation coming out of the institution, a small-sized fund comprised from angel supporters and aimed at 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 the University of Washington.

WRF is not only an investor into Washington spin-outs, but also licenses technology out of the university on a regular basis. They also provide 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 grow.

CFC is also hoping to replicate the bond between the institution and WRF by looking to partner corporates operating in the area. Jandhyala said that there has been attempts to build stronger bridges between CFC and corporate venture capital units. However, most CVCs will only take one or two startups under their wing. To help foster ties, CFC is beginning discussion to build joint incubators with corporates in and around the Washington campus to entice more companies to get involved at the early-stage. 

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