The University of Michigan has launched a program to provide university spinouts with professional expertise, even after they have graduated beyond the walls of the school.
According to an official from the University of Michigan, the school is likely not the first to provide such a service for its startup firms, but may be one of the only to provide dedicated resources for the program out of its technology transfer office.
The program, called the Catalyst Resource Network, is essentially a database comprising more than 1,000 experts worldwide in areas such as business development, market assessment, and technology assessment.
According to Wesley Huffstutter, program manager for the Catalyst Resource Network and Student Entrepreneurship in UM’s Office of Technology Transfer, the database contains contact information for various experts, consultants, mentors, and potential managers, many of whom are UM alumni.
Huffstutter wrote in an e-mail to BTW that the database is available to current OTT licensing projects, companies in the process of spinning out of the university, and “recent” UM spinouts still getting their legs under them — the latter being a relatively novel occurrence in the tech-transfer world, primarily because most OTT’s do not have the resources to provide such services to recent spinouts.
“Many of our startups and licensing projects need advice from industry veterans due to the particular nature of some of our technologies,” Huffstutter wrote. “Additionally, many of our startups need mentoring from someone who has been in the same position and has contacts in the marketplace.
“As one of the largest and most prestigious research universities in the country, we invent some of the world’s best technologies; however, as a region, the Midwest often does not have the access to venture capital and serial entrepreneurs like the coasts,” Huffstutter added. “The Catalyst Resource Network was developed to help our technologies overcome some of those obstacles and get them to the marketplace where the public can benefit.”
The database classifies its expert resources into five categories: experts, mentors, consultants, students, and potential leaders.
An “expert” is defined as an industry or technology expert that can offer quick assistance to UM commercialization staff such as resource identification, document review, and general advice. Experts are asked to contribute on a volunteer basis.
“Mentors,” on the other hand, are industry or technology experts that are asked to provide regular and project-specific assistance for a certain number of hours per month for as many as 24 months, also on a volunteer basis. “Students” are similar to mentors but are a at a lower level, and take the form of qualified UM students who may be interested in volunteering as an apprentice or as part of an OTT internship program.
The “consultants” category comprises paid contractors who are industry or technology experts required to address commercialization issues for which there are insufficient resources at the university. Assistance in this category can take the form of detailed market analyses, regulatory or reimbursement strategies, and market-based technical or product assessment.
The last category, “potential leaders,” comprises individuals that are candidates for a leadership or employment opportunity with the start-up company, and are potentially required to make a long-term commitment to the company. This resource is particularly valuable, and is often only provided to startup companies through venture capitalists.
UM is not the first university to provide resources for its spinout companies even after they have left the nest. For example, the Massachusetts Institute of Technolgoy offers a program called the Venture Mentoring Service. According to its website, the VMS services are offered free of charge to “all interested MIT students, alumni, faculty, and staff who are connected to a venture as a founder, principal, or executive, within the constraints posed by the available mentoring resources.”
However, because the VMS is “designed as a hands-on, face-to-face program,” according to the website, it only serves the MIT community located in the New England area.
“It would be naive to think that other universities are not keeping track of mentors, advisors, consultants, and potential management, but they probably have not dedicated the resources that UM has.”
The Catalyst Resource Network, on the other hand, is not geographically limited and, according to Huffstutter, is unique because it has defined resources, including a dedicated program manager. Most university tech-transfer offices that do offer resources for their spinouts do so with employees whose primary tasks revolve around traditional activities such as patenting, market research, and license negotiations and construction.
“It would be naive to think that other universities are not keeping track of mentors, advisors, consultants, and potential management, but they probably have not dedicated the resources that UM has,” Huffstutter wrote.
Because a significant portion of the database comprises volunteers, Huffstutter and colleagues at the OTT must continually contact potential resources to gauge their interest in the program and at which level they are willing and able to provide assistance. Most of the contacts are obtained through referrals and recommendations, Huffstutter wrote.
For those contributing on a volunteer basis, the benefit will depend on the role.
“Most contacts in the database have a passion for innovation and helping startups,” Huffstutter said. “It is a way to share their experiences and, in a way, give back to the university. Contacts classified as consultants or potential management could have financial benefit, although it is often at below market rates.”
The UM program is also somewhat unique in that it provides services through the Catalyst Resource Network for an indefinite period of time after a company spins out. Huffstutter declined to provide an exact amount of time after which spinouts can no longer obtain services, but he indicated that the endpoint will generally be once a technology is out in the marketplace.
In fiscal year 2006, ended June 30, 2006, the university had facilitated nine business startups, and over the past six years has spun out 55 new companies, so there are plenty of customers for the new program.
UM also recorded 288 new invention disclosures and executed 97 license agreements in FY 2006. Its invention disclosures were almost equally split between the medical/life sciences and engineering arenas.
In FY 2006, the university filed for 136 US patents, was issued 79, and received approximately $20.4 million in revenues from licensing royalties and the sale of equity, up 22 percent from $16.7 million the previous year, according to the OTT website.