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July 2, 2008
Purdue's new fund will help startup companies commercialize research discoveries
WEST LAFAYETTE, Ind. - Purdue Research Foundation and Purdue University officials announced Wednesday (July 2) a new philanthropic initiative that will provide financial support for startup companies to expedite moving research discoveries from the laboratory through development to commercial delivery.
The Emerging Innovations Fund will provide commercialization funding support for early-stage technologies through small, finite grants. The funds to support the venture are in the process of being raised privately and initial capitalization will be $1.5 million.
The standard funding term will be 12-18 months, and five to seven awards will be made annually, said Joseph B. Hornett, senior vice president, treasurer and COO of the Purdue Research Foundation. Funds will be distributed based on the successful completion of agreed upon milestones and will be in the range of $20,000-$200,000. Purdue faculty, staff, student and Purdue Research Park-based companies are eligible to apply for program funding, including all Indiana incubator and satellite campuses.
"The Emerging Innovations Fund is a collaborative enterprise between the Purdue Research Foundation and Purdue University and represents an integrated approach to discovery, development and delivery," Hornett said. "Our focus is to provide the critical support needed to advance technologies and generate public interest in the technology so the companies can attract additional funding and market interest."
The Purdue Research Foundation manages the Purdue Research Park, which is the largest university-affiliated business incubation complex in the country.
"Purdue is the most aggressive of the Big Ten universities in filing patents and starting new companies based on Purdue technologies," Hornett said. "In 2006, Purdue had 14 startup companies, which was third in the nation behind the University of California system and the University of Utah. This fund will help us augment our desire to move discoveries from the laboratory to the market where they can help people."
The funds will be used for:
*Intellectual property enhancement and "freedom to practice" analysis.
*Prototype development and testing.
*Market research and commercial assessment.
*Feasibility studies for production.
*Determination of regulatory, reimbursement pathways.
*Preliminary business plans.
The fund is designed to be financially self-sustaining by ensuring the funds will be an equity investment in the technologies. Startup companies benefiting from the fund will provide a payback into the program as part of the technology commercialization process.
"A key element to this fund is that it will be self-sustaining because the respective entrepreneurs receiving the capital will be obligated to pay it back with interest and will give the fund a warrant, stock or other equity in their company so we will benefit when the company does well. In turn, we will use the money that gets repaid and realized gains on the equity to support other new companies and over time this evergreen approach (and added donations to the fund based on proof of the concept) will grow and perpetuate the fund," said Jeffrey D. Warren, a Boston-based attorney and venture capital investor and Purdue alumnus. "Anyone receiving money from the fund will be required to formulate a tentative business plan for the technology and stick to it, so we will work directly with them to help them succeed. This will greatly increase the likelihood that they will spend the money wisely and eventually attract additional investors.
"Our goal is that additional funding to advance a particular technology supported by the fund will come from venture capital firms or other interested investors."
The project will be governed by an advisory panel that includes officials from the Purdue Research Foundation and Discovery Park. Julie Goonewardene, director of business development for the Purdue Research Foundation and Discovery Park, and Mary Jo Bartolacci, senior director of philanthropy for the Purdue Research Foundation and Discovery Park are developing the fund.
"The Discovery Park paradigm fosters a strong interdisciplinary approach to research and provides Purdue University researchers with unparalleled opportunities to collaborate on research and discoveries," said Alan H. Rebar, executive director of Discovery Park and senior associate vice president for research. "The Emerging Innovations Fund is another important step in providing the additional support that is needed to move discoveries to the public."
Funds distributed through the Emerging Innovations Fund will be made on a competitive basis that includes the following criteria:
*Quality of the application, including technical merit.
*Maturity of the project and cost to complete the development and proof.
*Commercial potential and business viability, including protection by patent or copyright.
*Projected ability of the innovation to sustain competitive advantage.
*Qualifications of the project team and its ability to complete the project plan.
*Probability of attracting future investments or licensing.
*Potential to contribute to the state of Indiana’s economic development, as applicable.
Funds may be used to offset graduate student or postdoctoral support, but cannot be used for faculty salary. For more information, contact: Julie Goonewardene, director of business development for the Purdue Research Foundation, at (765) 496-7519 or jkgoonewardene@prf.org; or Mary Jo Bartolacci, senior director of philanthropy for the Purdue Research Foundation and Discovery Park, at (765) 496-3886 or mbartolacci@purdue.edu .
About Discovery Park
Since its 2001 launch, Purdue has invested more than $150 million in new facilities and $25 million in laboratory equipment to create what's become the nearly $400 million Discovery Park. The 40-acre hub brings together researchers from multiple disciplines to tackle the most complex challenges in the world today. The 11 centers focus on major research in areas ranging from health-care engineering, nanotechnology, life sciences and cyberinfrastructure to climate change, entrepreneurship, cancer diagnosis, homeland security and alternative energy.
About Purdue Research Park
The 725-acre Purdue Research Park (https://www.purdueresearchpark.com) has the largest university-affiliated business incubation complex in the country. The park is home to more than 140 companies. About 90 of these firms are technology-related and another 39 are incubator businesses. The park was ranked No. 1 in 2004 for university- affiliated research parks and received the 2005 Outstanding Commercialization Award, both from the Association of University Research Parks. The park's companies also have received numerous recognitions, including a 2006 MIRA Award: Innovation of the Year for Purdue Research Park/Quadraspec Inc. and a 2005 CoreNet Global Innovators Award finalist. The Purdue Research Park is part of the Purdue Research Foundation, a private, nonprofit foundation created to assist Purdue University in the area of economic development. In addition to the Purdue Research Park in West Lafayette, the foundation has established or is currently constructing technology parks in other locations around Indiana including Merrillville, New Albany and Indianapolis.To the Purdue Research Park, https://www.purdueresearchpark.com
Writer: Cynthia Sequin, (765) 494-4192, casequin@prf.org
Sources: Joseph B. Hornett, (765) 494-6072, jbhornett@prf.org
Alan H. Rebar, (765) 496-6625, rebar@purdue.edu
Julie Goonewardene, (765) 496-7519, jkgoonewardene@prf.org
Mary Jo Bartolacci, (765) 496-3886, mbartolacci@purdue.edu