A New Jersey Entrepreneurial Network panel moderated by Judith Sheft, NJIT’s vice president of technology development, discussed how startups can successfully navigate university technology-transfer offices in order to license critical technology for their products.
Researchers have stated that university tech transfers can provide a great boost to innovation and economic growth in a region, Sheft noted, so it is important to advise entrepreneurs on the best ways to work with universities.
The panel, convened for the Posters, Pitches and Prizes event in PrincetonUniversity Feb. 18, included Michael Hack, Universal Display Corporation; Jim Harris, an entrepreneur formerly with Merck who now works with NJIT and some universities in the Philadelphia area; and Vincent Smeraglia, executive director of strategic alliances, Office of Research Commercialization, Rutgers.
One thing startups complain about is the lack of visibility of university tech-transfer offices. Startups have difficulty finding out what technology is available and contacting the researchers who can help them.
Harris said that he was able to get insight into university research by volunteering for university startup programs. Some of these programs allowed him to review 15 to 20 white papers, so he was able to find potential areas of research that were interesting to him and possibly ready for commercialization. The next step was meeting the researchers.
“If the relationship between you and the researcher isn’t there, no matter how good the technology is, it’s not going to fly,” he added.
Smeraglia said that connections are made in many different ways. “We had presented a poster at a regional bio event … a poster just like you see here. Some entrepreneurs who were walking the room took a look at the technology. … They randomly came up during the poster session, found a protein we had patented and that was the exact type of protein they were looking to modify and turn into a medical product. Turning up at poster sessions like this [referring to the NJEN meeting] is a great way to make networking connections.”
Rutgers’ licensing office sometimes makes cold calls to companies it thinks might be interested in a particular research project, sending non-confidential information for review, he said. And the university sends representatives to conferences to share technology. “We also try to establish relationships with venture funds.” he added. When the university has technology that falls within a venture fund’s “sweet spot,” it tries to schedule a meeting with the fund.
Relationships are key, said Hack. Companies need to take the time to establish personal relationships among their tech advocates, university researchers and people in university tech-transfer offices.
The founder of Universal Display was very interested in organic light-emitting diodes, according to Hack, because he had a gut belief that they could be a good start to be put to good use for new products.
He found the researchers working on this technology at Princeton, went to see them, and formed a relationship with them. Ultimately, he funded their research and created a sponsored research agreement with Princeton.
Hack suggested that entrepreneurs go to conferences to learn who the researchers are in the field they’re interested in, and then meet with those researchers to establish personal relationships.
Sheft pointed out that technology coming out of universities is frequently very early-stage. Once the technology has been licensed, she asked, how much work should the entrepreneur expect to do to further develop the product?
Hack recalled that, after Universal Display licensed the technology for organic light-emitting diodes, it was discovered that this technology wasn’t as unique or valuable as the company had initially thought. Working together with the researchers over a period of five to ten years, however, Universal Display did acquire some really valuable technology.
“I think the interaction between our company and the researchers at Princeton was very valuable,” he said, adding that Universal Display continues to extend its research agreement with Princeton.
Harris noted that while companies should work with university researchers to further the technology, they should also get out there and validate with customers. “There is nothing like talking to the end users,” as they understand what is currently in the market. Sometimes you learn of a new, unmet need in a different direction, and you might want to go with that technology, he said.
Entrepreneurs should also keep in touch with the tech-transfer people at the university, according to Harris. In his experience, they have been key in making connections to the “people we need to talk to, connections with potential strategic partners down the road who can guide us as to what they are looking for” in a finished product.
Smeraglia said that he encourages startups to ask researchers to chair their scientific advisory boards. This way, the scientist/inventor has a quarterly forum in which to tell the company how the research is going. There are often “mechanism-of-action” questions, especially in the biotech field, that are basic research questions on which the FDA requires documentation.
Many startup founders have research-collaboration agreements with Rutgers faculty members, he said, an arrangement that he believes contributes to setting up the company for success.
Smeraglia noted that university tech-transfer offices are able to work with startups, and will sometimes renegotiate license payments and extend deadlines for milestones when companies are struggling. The key is that the entrepreneur must make the university believe in the technology, the plan and the team executing it.
Harris said that he was sensing a huge momentum in the growth of university support for startup companies, with some universities even coming out with seed funds and accelerators.
Hack disagreed, saying that things are tougher now than when Universal Display began. “When we started, everyone wanted to form a win-win partnership.” Hack acknowledged that the company’s agreement with Princeton has lasted, and said “I think it has been good for everyone.” But he added, “I’m not sure if we were to start this today, that we would have the same agreement.”
“We’ve been talking to a lot of universities over the years, and the tech-transfer offices have gotten a lot more aggressive. We’ve found it a lot harder recently to work with universities” to develop agreements we think are a win-win on both sides, he concluded.