Technology Commercialization

Are university tech transfer offices missing the point?

In my conversations with entrepreneurs, stories abound about university technology transfer offices who just couldn’t get a deal done.  Some universities are even dubbed as “closed for business”.  It seems that their technology transfer offices are more interested in crafting the perfect license with large financial payoffs (in their minds) to the university and the investigator. They can’t see the forest for the trees.  Or maybe they are steeped in policy decisions and committees yada yada yada….so they still don’t get anything done.  Maybe somebody forgot to teach them in math that 15% of nothing is still nothing.

But wait a minute!  Looking more objectively at technology transfer, it is easy to see that this should be a sales and marketing (and business development) function, not a legal exercise in writing terms and conditions.  The university has the goods (the intellectual property) and there is a market out there (start ups, venture capitalists, and corporate America).  Why then do universities put lawyers in the role of Director of Technology Transfer?  It seems to me that what is needed is someone who understands business development — and let the lawyer work for them.  Besides lawyers are famous for screwing things up by taking too much of the decision making authority!

The few universities that “get it” focus on how to create a start up, how to analyze a market and determine demand, and most importantly - just going out there and selling something.  A good consultative business development professional who understands start up company finance and corporate culture would fill the bill.  Not a PhD researcher (they are introverts and perfectionists) and not a lawyer (they think the Ts & Cs are the deal).

Universities that get it — like Stanford and MIT — also understand ventures.  They don’t ask for onerous terms and large cash upfront.  They do a lot of deals at attractive rates and play the numbers.  Some universities are now claiming that they are changing.  Johns Hopkins, for example, now has experienced executives helping out.  The University of Virginia is seeking a new tech transfer director with business skills. And recently in the news was UNC who announced that all deals will look alike and the royalties are low single digit figures with no equity.  This takes the friction out of the process, and of course, will expose what I stated above.  It’s a sales and marketing function, not a legal exercise!

And by the way, kudos to Harvard Business Review for boldly proclaiming that university researchers should be free agents who choose their own licensing agent! Maybe that will help get university politics out of the way and let innovation accelerate!

Along these lines, Infinity Venture Group is announcing this later month that we are starting a technology transfer practice to outsource university tech transfer.  We will do this as a retained agent of numerous state and private universities, including smaller universities that don’t have a well established tech transfer function, as well as being an agent for individual investigators whose home institutions allow them to act on their own.  And yes, we are treating this as an aggressive sales and marketing function aligned with new venture development.  Legal is a mere supporting management function.

For more information, email ed@addison.us.com.  And do feel free to respond with a post.