When research establishing the idea of an invention is disclosed to the TTO, it is still at a very early stage. Companies typically require more solid information before making investment decisions on a new technology. To help provide this type of key information to potential company Licensees, the university can provide proof-of-concept (PoC) or prototype funds to their researchers to develop the information that is critical for companies to make investment decisions and potentially license the university’s technology. Many such programs are funded using internal institutional monies, as well as funding from regional or state or national governments.
Examples are provided below on several programs that help researchers develop PoC research:
3.10.1 PoC/Prototype Funds and the Innovation Ecosystem
Academic technologies are extremely early stage and most scientific grant funding programs are intended to generate innovative scientific results and to train the next generation of researchers, not to generate useful technologies. Unfortunately, most research necessary to prove the viability of a new technology isn’t considered innovative science by grant making bodies. This results in what is variously termed “the Gap,” “Death Valley” or “the Valley of Death.”
Here’s a short presentation on what we mean by the Valley of Death.
Another name for PoC research is translational research. Paul Zavracky, founding dean of the School of Technological Entrepreneurship at Northeastern University, once famously said:
“Translational research is what we call product development in academia. We can’t call it ‘product development,’ so we call it ‘translational research’ and everyone’s happy.”
3.10.2 Internal vs. External PoC/Prototype Funds
As noted above, basic scientific research grant programs are unlikely to give grants for crossing the Valley of Death. Often, a university start-up may need to start with funds from an internal university fund to show proof-of-principle and show potential external funders that they will be good stewards of their money.
Governments sometimes create translational research funds as part of economic development programs. Two of the major components of the United States’ innovation ecosystem are the Small Business Innovation Research Program (SBIR) and the Small Business Technology Transfer Research Program (STTR). These are pools of funds that basic science funding agencies are required to set aside for research which is commercially oriented. The business objectives are part of the study section criteria. The problem with these programs from universities’ points of view is that both require the technology to have already been transferred to a company—the principal investigator (PI) for an SBIR grant must be at least 50.1% employed by the grantee company as of the start date of the grant (and up to 33% of a Phase I project, and up to 50% of a Phase II project can be contracted to a university). An STTR grant must have both a company and a PSRI and can have either a PSRI scientist or a company scientist as the PI, and up to 60% of the funding can go to the PSRI or up to 70% to the company. Professors frequently found companies specifically to apply for SBIR and STTR grants.
Several state programs have been created for translational research:
Universities in the United States still haven’t found a solution to creating a steady flow of government funding for translational research funding. Frequently they turn to philanthropy to fill the gap. This philanthropic funding can be focused on a single institution, such as:
Or, it can be competitive and open to many universities. One of the pioneering examples of these is the Wallace H. Coulter Foundation’s Translational Research Partnerships in Biomedical Engineering.