By Ben Butkus
The University of Oklahoma Office of Technology Development and private non-profit entrepreneurial consulting and services firm i2e have signed an agreement to work together to speed tech transfer and create startup companies around OU technologies, the groups said recently.
The agreement formalizes an existing relationship between OU and i2e that dates back several years, and is expected to help increase the efficiency of startup creation at the proof-of-concept and private funding stages, officials from both groups said.
In addition, both groups expect the partnership to have a significant life sciences component due to the fact that about half of OU's intellectual property portfolio is in the biomedical space, officials said.
The agreement, which was inked in late August, will focus on four areas: increasing commercialization efficiency; connecting existing i2e clients with opportunities to license new technologies from OU's portfolio; developing a system to help identify and connect OU students with existing entrepreneurs and startups; and identifying and pursuing funding opportunities.
The overarching goal is to create more funding opportunities for OU technologies and increase the commercial success of those that reach the market, and to enhance real-world entrepreneurial experiences for OU students, the school said.
"This really lays out the framework of things we want to look at," Cameron McCoy, director of marketing and public relations at the OU OTD told BTW last week. "We figured out how to best leverage our capabilities. This document allows us to define what we should be working together on."
David Thomison, vice president for enterprise services at i2e, told BTW that the formal agreement "grew from this proactive relationship we've [had] for the past four to five years. We've looked at our track record and some decisions that we've made with them and learned from them. It wasn't like, 'Oh wow, we should do this.' We think this will optimize the interaction, and as you have turnover within the different organizations, the formalization gives it a little more stability … and tends to eliminate any duplication."
i2e was originally founded as the Oklahoma Technology Development Corporation in 1997. It is a private non-profit corporation that receives the predominance of its funding from the Oklahoma Center for Advancement of Science and Technologies, a state economic-development agency. i2e's mission is to provide advisory services, including business plan development, fund procurement, and networking, to startup companies in the state.
Thomison said that i2e works with anywhere from 60 to 100 startup companies annually, including, but not limited to, university spinouts.
"If you view this as a relay race, the university is generating the core technologies, and they are doing preliminary market assessment of the technology's market viability." Thomison said." They do an excellent job running it to that point, and we pick up the baton where we now have a company with a validated technology."
Thomison said that i2e's services vary for each company, but in general both sides work together to identify "one or two management-type individuals to manage the company through a commercial-scale prototype development."
i2e also has access to angel or seed capital organizations and operates a state-sponsored gap fund of about $12 million from which it can make seed-stage equity investments in the $400,000 to $500,000 range.
"We will run with those companies for 24 to 36 months until they've raised about $1.5 million," Thomison said. "Oklahoma has very limited in-state venture capital, and about 80 to 90 percent of the money we raise comes from out of state, so we have to nurture these companies until they are attractive enough for a VC from out of state to come in and put in the additional $3 million, $5 million, or $10 million necessary to advance things. And we are actually turning it over to the VC in two to three years."
Thomison added that the formal agreement with OU "defines the boundaries where we can make these handoffs."
In terms of life sciences-related startups, this process usually means procuring enough funding to file, for instance, an investigative new drug application, Thomison said. "What we're providing is more akin to what an advisory board would provide. We're not providing execution or operating management."
That is typically left up to new management and to the inventor. In the case of a university faculty member, they are usually allowed to devote a certain number of hours to conducting R&D in university labs to advance the company, Thomison said.
i2e does not receive a cut of any royalties or an equity stake in the startup companies except in cases where they receive an investment through the state-supported gap fund. "There we would take equity, board seats, and with regards to that investment, that one small function of our organization is a for-profit function," Thomison said. Still, i2e is required under contracts with the state to have at least one-third of the startup's equity tied to a private investor.
Although i2e has helped other universities and non-profit research institutes in the state create startup companies, OU is the first school with which it has signed a formal agreement. Thomison said that i2e is currently discussing similar formal agreements with two other major research universities in the state – though he declined to identify them – and is "optimistic that we will be able to formalize a similar agreement based on some of the informal interactions."
Thomison also said that i2e has also worked with the Oklahoma Medical Research Foundation, and is "trying to build a relationship" with the Samuel Roberts Noble Foundation, which specializes in plant biology research.
OU's McCoy said that i2e will help the university develop startups across all industry sectors, but that about half of OU's IP disclosures are in the life sciences arena, mostly due to the school's Health Sciences Center campus in Oklahoma City, but also in small part due to research conducted on its main campus in Norman.
"The state has really put in some solid infrastructure around the life sciences," McCoy added. "Our hope is to develop a strong process with i2e to figure out if our startup companies will fit well within their scope of capabilities. So it won't necessarily be all of our startup companies."
And although startup creation is the main thrust of the formalized agreement, other more nascent components include marketing OU technologies to companies that have already worked with i2e; and bringing into the fold the OU Center for the Creation of Economic Wealth, a student organization that analyzes and creates commercialization plans for both state and OU IP.
"We want to figure out how we can work with that organization and move some of our students into jobs at startups in the state," McCoy said.