Description
University, Entrepreneurship And Technology Transfer Agencies As Systems For The Competitiveness Of The Territory
51
university, entrepreneurship
University, Entrepreneurship
and Technology Transfer
Agencies as Systems for
the Competitiveness of
the Territory
mark coticchia
Vice President for Research an Technology Management
Abstract
La “Case Western Reserve University” (Cleveland Ohio), partner dell’Area Science Park di
Trieste, rappresenta un modello di successo sia nella riorganizzazione del trasferimento
tecnologico all’esterno della realtà accademica, sia nell’interazione con le imprese.
Alla luce del suo crescente successo, concretizzatosi nell’affermazione sul mercato di pro-
mettenti spin-off universitarie quali ad esempio CardioInsight, la CWRU ha deciso di condi-
videre la sua esperienza nel settore con l’Area di Trieste, rendendola partecipe della formula
per una strategia vincente che ha reso possibile la commercializzazione della ricerca.
La formula del successo è il trinomio “people-technology-capital”, ossia “risorse uma-
ne-tecnologia-capitale”.
L’obiettivo dell’Università era costruire un centro d’eccellenza che attraesse “menti illu-
stri e capitali”, in grado di contribuire non solo allo sviluppo tecnologico in settori di pub-
blica utilità come quello medico-sanitario, ma anche di favorire lo sviluppo della regione
attraverso la commercializzazione del prodotto tecnologico nato in contesto accademico.
Per fare ciò è stato necessario il contributo di aziende private, incubatrici di capitale
(Jumpstart e BioEnterprise), Stato e Governo.
Uno dei maggiori problemi iniziali è stato prendere coscienza del fatto che ?siologica-
mente vi erano visuali opposte tra università e industria: la prima, infatti, vede la ricerca
come naturale conseguenza della teorizzazione scienti?ca, la seconda invece la percepisce
52
come fonte di pro?tto. Per le università è fondamentale la libertà intellettuale, di ricerca
e la pubblicità dei suoi risultati, mentre le aziende danno più rilievo alla con?denzialità
della ricerca e a una apertura limitata al pubblico.
Una volta appurate le divergenze, la Case University ha puntato a valorizzare quelli
che potevano essere i punti di consonanza fra università e imprenditorialità: produrre
tecnologia innovativa, utile e commercializzabile.
CWRU è riuscita così a valorizzare e collegare sinergicamente le ?nalità accademiche
con quelle imprenditoriali, facendo leva sulle rispettive ambizioni – prestigio e ricerca da
un lato, concorrenzialità e pro?tto dall’altro.
Il risultato del modello Case è il seguente: le università hanno l’opportunità di fare
ricerca ?nanziata, fornire servizi alla comunità, insegnare e collaborare con ospedali e
cliniche fornendo tecnologie innovative, mentre le aziende hanno la possibilità di trarre
pro?tto dalla ricerca e possono commercializzarne i frutti.
Per fare ciò, la CWRU si avvale delle risorse umane più dotate nel settore della ri-
cerca, attingendo sia all’Università stessa che all’esterno. Le industrie giocano un ruolo
fondamentale in questo quadro poiché rendono possibile la commercializzazione delle
tecnologie sviluppate in ambito universitario attraverso ?nanziamenti che si vanno ad
aggiungere ai fondi statali e governativi. Rintracciare il capitale è stato frutto di una com-
plessa operazione di mappatura del territorio del Nord-est Ohio risultata nella stesura del
rapporto “Greater Cleveland venture capital report”, nel quale sono stati de?niti i livelli di
?nanziamento e rintracciati i fondi circolanti nel Nord-Est della regione.
Al ?ne di effettuare concretamente il Technology Transfer – o Trasferimento delle tecnolo-
gie – è stato necessario sopperire a un assetto disorganizzato della gestione di ricerca e tec-
nologia, nonché alla mancanza di risorse e di risultati rilevata nella gestione precedente
al 1994 del patrimonio tecnologico-intellettuale universitario.
La riorganizzazione è avvenuta sulla base di
– centralizzazione delle attività;
– customer service;
– staff competente e specializzato nella gestione economico-?nanziaria;
– libertà gestionale nelle transazioni economiche e libertà contrattuale.
Adesso la Case University è al primo posto nello Stato dell’Ohio per commercializzazione
tecnologica e rientra nella top ten delle start-up degli Stati Uniti, secondo Entrepreneur
Magazine.
Una valida esempli?cazione dei risultati ottenuti dalla collaborazione tra università e
industrie è senza dubbio la “veste” a elettrodi della CardioInsight: una tecnologia innovati-
va che consente il monitoraggio delle attività cardiache di super?cie senza essere invasiva.
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university, entrepreneurship
I am honored to have the opportunity to take part in this exciting conference,
and I feel privileged indeed to be included on such an esteemed panel.
I also want to thank AREA for not only hosting my participation in this con-
ference but more importantly for their continued collaboration with my insti-
tution, and partnership with the city of Cleveland, and the State of Ohio. Our
budding relationship will add signi?cant value to your regional research and en-
terprise system, as well as ours in the United States.
First, since my perspectives, like yours, are shaped by my professional experi-
ence, let me tell you a bit about myself. My current position is Vice President of
Research at Case Western Reserve University in Cleveland, Ohio. Case is a major
academic research institution where we conduct over $400M in research an-
nually. We have a $1.6B endowment, $800M operating budget and my division
manages several thousand transactions per year.
I am an engineer by training and have worked in industry, government, and
academia. I have also held various engineering, marketing, and business devel-
opment positions in those sectors. In addition, I have been an entrepreneur and
an early stage venture capitalist. I believe all of these experiences have broadened
the perspective I bring to this subject.
Before we begin, let me note also that I recognize the system we work under
in the United States is different than the one here in Italy. It is truly my hope that
you ?nd some ideas and tools that you can borrow from what I am about to share
with you. I encourage you to look for the similarities, not the differences.
The universal truth we all share – as true in Italy as in the United States and
everywhere else in this wildly competitive modern world – is that there is a sim-
ple, three-ingredient formula you have to follow if you want to build a forward-
looking, 21
st
Century economy. Here’s the formula:
People. Technology. Capital.
That’s it. I told you it was simple. All you need are: People, including world-class
talent, educators and students; Technology, to drive our skill-based industries;
and Capital, in the form of venture capital, institutional dollars, and private
investment.
Bringing all three elements together and maximizing their effectiveness is
the hard part, however. That’s what we are trying to do at Case. I’m very proud of
our success in re-energizing the commercialization effectiveness of our research
enterprise, and I’d to share some of our experiences with you.
I also want to highlight some of the strides we have made recreating and
strengthening the Technology Transfer Of?ce since I joined the university in 2001.
54
The very term “research commercialization” suggests that what we are talking
about here is not strictly an academic endeavor. Industry plays a critical role in
making technology transfer happen, so it must be a major part of the equation.
In America, industrial-sponsored research is still relatively small compared
to federal and state funding, but it is a rapidly growing source, accounting for
5-15% of total academic research dollars, about $50B a year.
In bringing the worlds of academia and industry together, we must recognize
that the cultures of companies and universities have pronounced differences.
The two have con?icting motivations even where commonality of interests ex-
ists, as this slide demonstrates. Universities are drawn to translational research
for reasons of institutional prestige, which I’ve labeled “Ego and Envy.” Compa-
nies are motivated by a desire to make a pro?t and beat their competition, which
I’ve summed up as “Fear and Greed.” Similarly, their conceptions of time are very
different, with industry generally displaying a much greater sense of urgency
than the more leisurely-paced academic world.
TWO WORLDS COME TOGETHER
UNIVERSITY INDUSTRY
Fig. 2: Two worlds come together
Ego & Envy
Time = Semester
Translational
Research
Business
Development
Fear & Greed
Time = Money
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university, entrepreneurship
And it is not just culture that separates industry and academia – their missions,
goals and objectives are very different as well, as you can see in this slide.
For the university, the pursuit of knowledge is its own reward. For the com-
pany, knowledge is an asset to be managed for pro?t. The university prizes ac-
ademic freedom and open disclosure. The company values con?dentiality and
limited public disclosure.
But despite these diametrically opposed outlooks, there exists a clear align-
ment of common interest: namely, the commercialization of new and useful
technologies. Their motivations may be entirely different – the university sees
an opportunity for teaching, conducting research, service to society and econom-
ic development; the company hopes for pro?t and product R&D – yet there it is,
nevertheless: a huge mutual interest.
And in that commonality lies an enormous opportunity.
We are capitalizing on this opportunity at Case through direct funding, con-
sortia and other innovative approaches, such as government matching fund pro-
grams to leverage investment dollars.
CONFLICTING VALUES, COMMON INTEREST
UNIVERSITY INDUSTRY
Knowledge for
Knowledge’s Sake
Academic Freedom
Open Disclosure
Management of
Knowledge for Pro?t
Con?dentiality
Limited Public Disclosure
Fig. 3: Con?icting values, common interest
Teaching
Service
Commercialization
of New and Useful
Technologies
Pro?ts
Product R&D
Research
Economic
Development
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Allow me to tell you a little bit about my school, of which I am very proud.
Case Western Reserve University is located, as I mentioned, in Cleveland,
Ohio, on the shores of Lake Erie, the smallest of the ?ve “Great Lakes” in the
“Great Lakes Region” of the United States and Canada. The region immediately
surrounding Cleveland is known as Northeast Ohio or NEO.
Our campus is situated at Cleveland’s University Circle, a picturesque, 500-
acre, park-like area that is home to more than 40 cultural, medical, educational,
religious and social service institutions.
University Circle, I might add, is adjacent to the Cleveland neighborhood
known as Little Italy. Many descendants of the city’s ?rst Italian immigrants still
live there, and it is home to a number of popular restaurants, bakeries and shops.
Case is the only independent, research-oriented university in a large region
bounded by Pittsburgh, Pa. and Rochester, N.Y. on the east, Nashville, Tenn. on
the south, and Chicago, Ill. on the west.
Cleveland, OH
New York City, NY
Washington, DC
CLEVELAND, OHIO USA
Fig. 4: Cleveland, Ohio USA
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university, entrepreneurship
Under dynamic new leadership, Case Western Reserve University has re-de?ned
its mission – to Improve, Imagine, Enrich and In?uence – and its role as a 21
st
century research institution.
Known informally as CWRU, or simply “Case”, it is one of our nation’s lead-
ing research institutions.
Its roots stretch back to Ohio’s wilderness days with the founding, in 1826, of
Western Reserve College. Its present form was shaped by the unique merger in
1964 of Western Reserve University and the Case Institute of Technology.
Case is distinguished by its strengths in education, research, service and ex-
periential learning, and offers nationally recognized programs in the Arts and
Sciences, Dental Medicine, Engineering, Law, Management, Medicine, Nursing,
and Social Sciences.
CASE WESTERN RESERVE UNIVERSITY (CWRU)
Improve, Imagine, Enrich, In?uence
– Among the nation’s leading research institutions
– Founded in 1826
– School of Medicine and Biomedical Engineering
programs are the primary technology transfer
pipelines
Fig. 5 Case Western Reserve University (CWRU)
58
In the fall of 2008, the University had an enrollment of 4,356 undergraduates
and 5,458 graduate and professional students, representing all 50 states and 87
countries. It has approximately 2,600 full-time faculty and 110,000 alumni.
Last year, Case awarded 793 undergraduate degrees, 951 master’s degrees, and
718 doctorates, for a total of 2,462.
The school’s primary research areas are Medicine, Engineering, and Biomedical
Engineering.
With over $407 million in total research funding in 2008, it is listed as one of
the Top 25 medical schools in the United States. Its funding sources include the
National Institutes of Health, the National Science Foundation, state and local
government, and support from industry.
CWRU – A LEADING RESEARCH INSTITUTION
The University
– Approximately 10,000 Students
– 2,600 Full-Time Faculty
– 110,000 Alumni
Primary Research Areas
– Medicine
– Engineering
– Biomedical Engineering
Research Funding
– $407 Million (all sources, 2008)
– Top 25 Medical School (U.S. News & World Report)
– Funding Sources
– National Institutes of Health
– National Science Foundation
– State and local government
– Industry support
Fig. 6: CWRU – A leading research institution
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university, entrepreneurship
When I arrived at Case, the Technology Transfer Of?ce was in pretty bad shape.
The program was disorganized, suffered from a lack of resources and resolve, and
was, in general, producing very poor results. But gradually, through diligence and
hard work, we began to see some successes by focusing on capital and talent.
Technology Transfer was re-organized around several basic principles, includ-
ing tighter, more centralized control, improved customer service, a business-
savvy staff, and the authority to move quickly on deals.
A key to the turnaround was our involvement in something called the Early
Stage Capital Task Force, made up of a group of people in Northeast Ohio who
were trying to precisely de?ne the venture capital situation.
It took us three years to understand the issue in all its complexities, but we
eventually identi?ed the stages of funding and tracked amounts of funding to
Northeast Ohio.
The result was called The Greater Cleveland Venture Capital Report. This
document has become the roadmap to building the venture capital industry in
our region.
CWRU TECHNOLOGY TRANSFER
Starting Point
– Disorganized
– Lack of Resources and Resolve
– Poor Results
Principles
– Centralized Function
– Customer Service
– Business-Savvy Staff
– Authority to Move Deals Quickly
Early Efforts
– Edison Biotechnology Center
– Enterprise Development Inc.
Keys
– Early Stage Capital Task Force
– Entrepreneurship Task Force
– GCVC Report
– JumpStart and BioEnterprise
– Support incentives for VC investors
– Recruitment of top talent to region
– innovative policies
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Fig. 7: CWRU Technology Transfer
??????????????????????????????????????????????
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Two of the innovations springing from this effort are called JumpStart and
BioEnterprise, both of which I will describe in detail later.
The report identi?ed what we needed to do to address the lack of available
capital and talent. Speci?cally, it paved the way for collaboration, cooperation
and partnership among research institutions, foundations, angels, venture capi-
talists and the state.
Even more importantly, it was designed to reduce risk and increase deal ?ow
in order to attract more venture and capital to the region.
Nationally Ranked Of?ce
– Ranks in Top 10 for start ups, licensing, revenue, disclosures
received, and cumulative licenses
– Ranks #1 in the State of Ohio
– Team of professionals focused on speci?c schools
and academic departments
CWRU TECHNOLOGY TRANSFER – TODAY
Fig. 8: CWRU Technology Transfer – Today
Here is where we stand today.
Case’s Technology Transfer Of?ce, from its dismal numbers in 2001, is now
ranked Number One in Ohio, and in the Top 10 nationally, for start-ups, licens-
ing, revenue, disclosures received, and cumulative licenses. Our team of profes-
sionals is focused on speci?c schools and academic departments.
Last year alone, Case’s spinouts attracted more than $100M in venture capital.
From a regional perspective, over the last three years Northeast Ohio has at-
tracted more than $500M in venture capital, and is well on its way to its goal of
$1.2B over the next ?ve years.
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university, entrepreneurship
Let’s return to the formula I mentioned at the beginning. Any successful high-
tech economic development strategy must address three factors – people, tech-
nology and capital – and academia, government, and industry have a role to play
in all of them.
The university’s core mission must be to build centers of excellence that will
attract top researchers, scholars and students, who will in turn develop the new
technologies that can generate the necessary capital to make technical transfer
possible.
People. Technology. Capital.
To allow this to happen as quickly as possible, government and academia
must develop programs that accelerate the process of turning research concepts
into practical products and services.
And that, of course, brings industry into the picture, creating the companies
that will produce the jobs and spur the economic development of the market-
place of the future.
INNOVATION FORMULA
FEEDING THE INDUSTRIES OF TOMORROW
Academia Government Industry
PEOPLE
TECHNOLOGY
CAPITAL
Fig. 9: Innovation Formula
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Our spinoffs have not only been developed from research at Case, but also as a re-
sult of our expanded, leveraged ties in the region. We call this our “Innovation
Network”, and it has given us great ?exibility in acquiring funding for start-ups.
An important part of this network is Case Technology Ventures, a pre-seed
venture capital fund managed by our Tech Transfer Of?ce that promotes promis-
ing start-up opportunities.
The network also includes two world-class hospitals that neighbor the uni-
versity – University Hospitals Case Medical Center and the Cleveland Clinic
Foundation. This strong medical presence is a central point of commercializa-
tion for the region.
Two other organizations round out our Innovation Network, and I’d like to
tell you a little about each of them.
INNOVATION NETWORK: EXPANDED TIES TO THE REGION
Case Western
Reserve
University
JumpStart
BioEnterprise
The Cleveland
Clinic
University
Hospitals
Fig. 10: Innovation Network: Expanded Ties to the Region
Working together
to accelerate
technology commercialization
and new company creation
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university, entrepreneurship
BioEnterprise is a business accelerator created to help emerging medical device,
biotechnology and health care service ?rms attract venture capital, as well as at-
tract bioscience companies to the region. It is a joint initiative by Case and the
area’s leading hospitals and health care institutions, and it is funded by the State
of Ohio and local foundations.
BioEnterprise has helped attract $585 million in capital to medically oriented
companies in Northeast Ohio over the last four years. Total capital investment in
such ?rms over that period was $860M, so you can see what an important role
BioEnterprise plays. And according to a recent BioEnterprise analysis, Ohio has
become the leading state between the East and West coasts – and one of the top 5
in the nation – for hosting health care venture capital ?rms.
BioEnterprise
11
JumpStart
12
Fig. 12: JumpStart
Fig. 11: BioEnterprise
Welcome to BioEnterprise
Overview
BioEnterprise is a business formation, recruitment, and acceleration
initiative designed to grow health care companies and commercialize
bioscience technologies. Based in Cleveland, BioEnterprise’s founders and
partners are Cleveland Clinic, University Hospitals, Case Western Reserve
University, Summa Health System and BioInnovation Institute in Akron.
The initiative comprises the collective activities of BioEnterprise and its
partners’ commercialization of?ces: the Case Of?ce of Technology Transfer,
Cleveland Clinic Innovations, University Hospitals Case Medical Center -
Center for Clinical Research and Summa Enterprise Group.
Companies include emerging medical device, biotechnology, and health
care services ?rms. Each year, the BioEnterprise groups choose a select
number of companies on which to focus. The resources and networks of the
BioEnterprise partners are directed to help those companies achieve greater
levels of business success.
JumpStart funds high-growth
businesses and ideas, works
with their founders to develop the
businesses into venture-ready entities
and simultaneously celebrates
Northeast Ohio’s early-stage company
successes.
READ MORE
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JumpStart, Inc. is a venture capital development organization created in North-
east Ohio to accelerate the progress of high-growth, early-stage businesses.
JumpStart is a relatively new addition to the Innovation Network, but this seed-
funding entity is already one of the most active investors in the United States. It
is, in fact, ranked in the Top 10 by Entrepreneur Magazine.
JumpStart is owned by CWRU and NorTech, which is the local high-tech
chamber of commerce, and is funded by the State of Ohio and local foundations.
JumpStart has invested in several of Case’s spinout companies.
Government also must play a role in research commercialization, and I’d like
to speak to you about several state programs in Ohio that contribute to our tech-
nology transfer success.
– Research Commercialization Program (RCP)
– Grants advance major research initiatives to impact Ohio's economic development and
provide long-term improvements in the State's technology base
– Now a 10-year, $1.6B initiative to:
– Build world-class research capacity
– Support early stage capital formation and the development of new products
– Finance advanced manufacturing technologies to help existing industries become
more productive
OHIO THIRD FRONTIER PROJECT
The Research Commercialization Program, or RCP, is part of Ohio Third Frontier,
a voter-approved initiative to increase investment in research and technology.
The RCP was enacted by legislation in 2003.
The purpose of the program is to award grants to advance major research ini-
tiatives that have the potential to increase economic development and provide
long-term improvements to the state’s technology base.
Originally supported by funds received by the state as part of a settlement in
lawsuits against the tobacco industry, the RCP has grown to become a 10-year,
$1.6B initiative to build a world-class research capacity in the State of Ohio. The
RCP supports early-stage capital formation and the development of new prod-
ucts, as well as ?nancing advanced manufacturing technologies to increase the
productivity of existing companies.
The list of RCP and other Third Frontier success stories is a rapidly growing
one. Some of these include:
Fig. 13: Ohio Third Frontier Project
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university, entrepreneurship
– The Center for Stem Cell and Regenerative Medicine.
– Genetics of Gastrointestinal Cancers.
– Ohio Neurostimulation and Neuromodulation Partnership.
– Targeted Nanoparticles for Imaging and Therapeutics.
– The Case Center for Surface Engineering.
OHIO THIRD FRONTIER PROJECT (CONT.)
FOCUS AREA
– Biomedical
– Advanced/alternative energy
– Instruments-Controls-Electronics (ICE)
– Advanced materials
– Advanced propulsion
FUNDING
– $23M Engineering & Physical Science
– $23M Biomedical
– Award size: $2M- $5M
The Third Frontier Program aims to take Ohio’s technological strengths and
maximize their economic development potential. The focus areas zero in on the
things Ohio does best – biomedicine, alternative energy, Instruments-Controls-
Electronics, advanced materials and advanced propulsion. Nearly $50M has been
set aside to fund research projects, with average awards of $2 to $5M.
Projects are collaborations among Ohio higher education institutions, non-
pro?t research organizations, and Ohio companies. To receive an award, the plan
must demonstrate collaboration among the partners, as well as commercializa-
tion potential. In addition, the partners must put up funds to match the state
award. It is very important that a signi?cant portion of the money be spent in
Ohio, and the inclusion of a solid corporate partner is considered crucial.
Fig. 14: Ohio Third Frontier Project (Cont.)
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The Ohio Capital Fund
15
Another program established by the state is the Ohio Capital Fund, a fund of
funds professionally managed and designed to promote private investment in
Ohio companies in the seed or early stage of business development.
The Ohio Capital Fund currently has about $150M of commitments from pri-
vate resources for investment in quali?ed venture capital funds, and these VC
funds commit to investing at least half of the Ohio Capital Fund monies in Ohio-
based enterprises.
By actively making commitments to venture capital funds, the Ohio Capital Fund
is acting as a catalyst to promote venture capital investments in promising Ohio companies.
TECHNOLOGY TRANSFER AND COMMERCIALIZATION
CWRU-FUNDED START-UPS
Cardiovascular
Medical Devices
Fig. 16: Technology Transfer and Commercialization
Fig. 15: The Ohio Capital Fund
The Ohio Capital Fund, a fund of funds, was established by the State of Ohio to help increase
private investment in Ohio companies in the seed or early stage of business development. To
date, the Ohio Capital Fund has obtained $150 million of commitments from private resources
for investment in quali?ed venture capital funds. These venture capital funds commit to invest
at least half of the Ohio Capital Fund monies in Ohio-based companies, corporations and
individuals. The Ohio Capital Fund is actively making commitments to venture capital funds
and through these commitments, the Ohio Capital Fund acts as a catalyst to promote venture
capital investment in promising Ohio companies.
The Ohio Capital Fund
What is The Ohio Capital Fund?
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university, entrepreneurship
These are some of the start-ups that have emerged at Case. I’ll talk about a few of
them in a moment, but ?rst, I wanted to say a few words about university-based
startups in general.
No one could question the impact universities have on the development of
many of our most successful, forward-thinking companies. Hewlett-Packard,
Cirrus Logic, Genentech, Google and Lycos are just some of the world-renowned
companies born as a result of technological inventions by faculty, students and
staff at American universities.
And these are only the most high-pro?le examples. There are many, many more
university spin-offs enjoying success, with new ones being created all the time.
University spin-offs share a number of common factors. Typically, they are
high-performing companies, and they are much more likely to go public than
the average new ?rm.
According to one estimate, the percentage of American university spin-offs
that have gone public exceeds 8%, a ?gure 114 times the average for a new com-
pany in the United States.
Spin-offs are also much more likely to receive funds from venture capitalists
and business angels than the average start-up.
In addition, university spin-offs are less likely than the average start-up to
fail. Of 6,300 start-up companies founded since 1980 in the United States, over
60% remain operational today, which is considerably higher than the average
survival rate for new companies in the U.S.
Finally, university spin-offs are more pro?table, on average, than the typical
high-technology start-up. So by almost any measure, the value of spin-offs is un-
questionable.
CARDIOINSIGHT, INC.
Dimension 1
– Space
– Equipment
– Legalities
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
Fig. 17: CardioInsight, Inc.
??????????????????????????????????????????????
68
To give you an example of what we’ve been doing at Case, I’d like to tell you about
one of our spin-offs, CardioInsight Technologies, Inc.
The technology behind the company was more than 20 years in the making.
It involves the use of a vest with more than 200 electrodes, embedded along with
a proprietary software algorithm to precisely measure the surface potential of the
heart. It is a quantum leap over current technology – the EKG – and displaces more
invasive technology involving a catheter-based probe and CAT or MRI scanning.
In short, it is considerably less invasive, much less costly, and more precise
than any other existing technology.
Although it is a biomedical application, the principal intellectual property is
the software that interprets the data from the vest’s electrodes in real time.
This and the following slides provide a timeline for the steps that led to the
commercialization of this trailblazing technology and the creation of CardioIn-
sight. As you can see, the initial steps occurred in 1994, which we call Dimension
1, involved what could be described as the basics: ?nding of?ce and lab space,
acquiring the necessary equipment and taking the required legal steps, such as
incorporation and retention of legal counsel.
CARDIOINSIGHT, INC.
Dimension 1
– Space
– Equipment
– Legalities
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
Dimension 2
– Business Plan
– Revenue Plan
– Locate Providers
– Make Investment
Fig. 18: CardioInsight, Inc.
??????????????????????????????????????????????
69
university, entrepreneurship
The original researcher in the development of the new technology left Case to go
to Washington University, but two of his students were very enthusiastic about
the technology and wanted to form a company to commercialize it.
So they turned to us, and Case agreed to provide seed capital and help formu-
late a plan.
As it turned out, neither of the founder researchers was appropriate to lead a
start-up company, so case found an “interim CEO” and project manager around
which to form the company.
This team led the company through the Dimension 2 steps in its develop-
ment. A business plan, including a revenue plan, was drafted and re-drafted.
CARDIOINSIGHT, INC.
Dimension 1
– Space
– Equipment
– Legalities
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
Dimension 2
– Business Plan
– Revenue Plan
– Locate Providers
– Make Investment
Dimension 3
– Find Capital
– Coach Leaders
– Recruit a Players
– Help Form Board
Fig. 19: CardioInsight, Inc.
Venture capital was acquired from several sources, including JumpStart and Case
Technology Ventures. Company leaders are receiving coaching from experts at
BioEnterprise and our own Technology Transfer Of?ce, and top researchers and
doctors are being retained as advisors and consultants. A board is also being
formed, on which the Technology Transfer Of?ce has a seat.
In addition to providing start-up capital, Case helped to ?nd ?rst round ?nanc-
ing from other sources, speci?cally, the previously mentioned JumpStart and
Draper Triangle Ventures. Each party invested $250,000, for a total of $750,000
to launch the company.
??????????????????????????????????????????????
70
These funds allowed for the development of an experimental prototype and
the testing of the device on humans.
CARDIOINSI GHT, INC.
Dimension 1
– Space
– Equipment
– Legalities
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
Dimension 2
– Business Plan
– Revenue Plan
– Locate Providers
– Make Investment
Dimension 3
– Find Capital
– Coach Leaders
– Recruit a Players
– Help Form Board
Today
The success of the clinical prototype has
helped the company to attract a $5M “A”
round ?nancing.
Fig. 20: CardioInsight, Inc.
Today, CardioInsight stands on the verge of great success. Tests conducted with
the clinical prototype proved so successful that the company attracted a $5M “A”
round ?nancing. It is currently raising the round of $5M, with $4M of venture
capital committed to date.
This seed funding allows for chronic animal studies to take place, the ?rst hu-
man trials, expansion of IP protections, and a raise of Series A investment.
For Case Technology Ventures, a $5M pre-seed fund at Case Western Reserve
University, CardioInsight is our prototype of a successful university spinoff.
??????????????????????????????????????????????
71
university, entrepreneurship
CardioInsight, Inc.
ECG
I
•Electrical activity on
the heart’s surface
•Electrical activity on
the heart’s surface •Heart
•Geometry
Prototype 224
Lead Vest
CT Scan
NON INVASIVE
HIGHLY SPECIFIC
COST EFFECTIVE
HIGHLY SENSITIVE
21
CARDIOINSI GHT, INC.
Prototype 224
Lead Vest
The ?edgling company is still evolving, but it is well on its way to establishing
itself in the cardiovascular diagnosis market. CardioInsight is an outstanding
example of a technology originating in university research and gaining com-
mercial success.
Fig. 21: CardioInsight, Inc.
NEUROS MEDICAL, INC.
Dimension 1
– Space
– Equipment
– Legalities
1990 1992 1994
1996 1998 2000 2002 2004
2006
2008
Dimension 2
– Business Plan
– Revenue Plan
– Locate Providers
– Make Investment
Dimension 3
– Find Capital
– Coach Leaders
– Recruit a Players
– Help Form Board
Today
The success of the clinical prototype has
helped the company to attract a $5M “A”
round ?nancing.
Fig. 22: Neuros Medical, Inc.
CT Scan
Electrical activity on
the heart’s surface
Heart Geometry
??????????????????????????????????????????????
72
Another emerging business that began in our school’s research labs is Neuros
Medical, Inc., which is attempting to commercialize neurostimulation technology
developed by two researchers at the Case Department of Biomedical Engineering.
This technology, known as “Nerve Block,” delivers high-frequency stimula-
tion to sensory nerves in the peripheral nervous system to block chronic pain.
Because it operates at a much higher frequency than conventional neurostimula-
tion devices, the Nerve Block technology is able to block pain completely, as op-
posed to simply masking it.
The company will target it toward patients with chronic pain, especially those
with residual limb pain, a common occurrence after amputation. The technology
also has potential applications for cancer pain, diabetic neuropathy, cerebral palsy,
multiple sclerosis, and stroke.
Case has acquired a patent for this unique high-frequency application and
has an additional two patents pending. Case put up seed money, BioEnterprise
helped with the business, and an organization called North Coast Angels com-
mitted to $500,000 to $600,000 in capital.
All this happened amazingly quickly. The company went from inception to
launch in less than a year, and successful clinical tests helped the company to at-
tract a round ?nancing of $5M.
Neuros Medical is well on its way to becoming the latest of our successes at
Case. It, as well as CardioInsight and the other spin-offs we’ve been involved with
at Case, demonstrate what can happen when you bring those three essential in-
gredients together: People, Technology and Capital.
NEUROS MEDICAL, INC.
Fig. 23: Neuros Medical, Inc.
73
university, entrepreneurship
As you can see from this overview, those three keys apply to us and apply to you.
I know I’ve taken every bit of my allotted time so I’ll close here, but I look for-
ward to taking any questions you might have.
I want to thank you once again for inviting me to speak with you today about
the efforts we are making at Case Western in the area of research commercializa-
tion. I am especially grateful to have had the opportunity to visit your beautiful
city and country. Back home, I enjoy going to Little Italy. Believe me, I like Big
Italy even better.
On the screen is our website and the mailing address of the Technology Trans-
fer Of?ce at Case Western University. Please contact us if you would like to learn
more about our programs.
Again, thank you for your attention.
CONTACT US
TECHNOLOGY TRANSFER AT CASE
To learn more, please visit our web site:http://techtransfer.case.edu
Technology Transfer Of?ce
Case Western Reserve University
10900 Euclid Avenue, Sears Building, 6th Floor
Cleveland, OH 44106-7219
Fig. 24
doc_265241544.pdf
University, Entrepreneurship And Technology Transfer Agencies As Systems For The Competitiveness Of The Territory
51
university, entrepreneurship
University, Entrepreneurship
and Technology Transfer
Agencies as Systems for
the Competitiveness of
the Territory
mark coticchia
Vice President for Research an Technology Management
Abstract
La “Case Western Reserve University” (Cleveland Ohio), partner dell’Area Science Park di
Trieste, rappresenta un modello di successo sia nella riorganizzazione del trasferimento
tecnologico all’esterno della realtà accademica, sia nell’interazione con le imprese.
Alla luce del suo crescente successo, concretizzatosi nell’affermazione sul mercato di pro-
mettenti spin-off universitarie quali ad esempio CardioInsight, la CWRU ha deciso di condi-
videre la sua esperienza nel settore con l’Area di Trieste, rendendola partecipe della formula
per una strategia vincente che ha reso possibile la commercializzazione della ricerca.
La formula del successo è il trinomio “people-technology-capital”, ossia “risorse uma-
ne-tecnologia-capitale”.
L’obiettivo dell’Università era costruire un centro d’eccellenza che attraesse “menti illu-
stri e capitali”, in grado di contribuire non solo allo sviluppo tecnologico in settori di pub-
blica utilità come quello medico-sanitario, ma anche di favorire lo sviluppo della regione
attraverso la commercializzazione del prodotto tecnologico nato in contesto accademico.
Per fare ciò è stato necessario il contributo di aziende private, incubatrici di capitale
(Jumpstart e BioEnterprise), Stato e Governo.
Uno dei maggiori problemi iniziali è stato prendere coscienza del fatto che ?siologica-
mente vi erano visuali opposte tra università e industria: la prima, infatti, vede la ricerca
come naturale conseguenza della teorizzazione scienti?ca, la seconda invece la percepisce
52
come fonte di pro?tto. Per le università è fondamentale la libertà intellettuale, di ricerca
e la pubblicità dei suoi risultati, mentre le aziende danno più rilievo alla con?denzialità
della ricerca e a una apertura limitata al pubblico.
Una volta appurate le divergenze, la Case University ha puntato a valorizzare quelli
che potevano essere i punti di consonanza fra università e imprenditorialità: produrre
tecnologia innovativa, utile e commercializzabile.
CWRU è riuscita così a valorizzare e collegare sinergicamente le ?nalità accademiche
con quelle imprenditoriali, facendo leva sulle rispettive ambizioni – prestigio e ricerca da
un lato, concorrenzialità e pro?tto dall’altro.
Il risultato del modello Case è il seguente: le università hanno l’opportunità di fare
ricerca ?nanziata, fornire servizi alla comunità, insegnare e collaborare con ospedali e
cliniche fornendo tecnologie innovative, mentre le aziende hanno la possibilità di trarre
pro?tto dalla ricerca e possono commercializzarne i frutti.
Per fare ciò, la CWRU si avvale delle risorse umane più dotate nel settore della ri-
cerca, attingendo sia all’Università stessa che all’esterno. Le industrie giocano un ruolo
fondamentale in questo quadro poiché rendono possibile la commercializzazione delle
tecnologie sviluppate in ambito universitario attraverso ?nanziamenti che si vanno ad
aggiungere ai fondi statali e governativi. Rintracciare il capitale è stato frutto di una com-
plessa operazione di mappatura del territorio del Nord-est Ohio risultata nella stesura del
rapporto “Greater Cleveland venture capital report”, nel quale sono stati de?niti i livelli di
?nanziamento e rintracciati i fondi circolanti nel Nord-Est della regione.
Al ?ne di effettuare concretamente il Technology Transfer – o Trasferimento delle tecnolo-
gie – è stato necessario sopperire a un assetto disorganizzato della gestione di ricerca e tec-
nologia, nonché alla mancanza di risorse e di risultati rilevata nella gestione precedente
al 1994 del patrimonio tecnologico-intellettuale universitario.
La riorganizzazione è avvenuta sulla base di
– centralizzazione delle attività;
– customer service;
– staff competente e specializzato nella gestione economico-?nanziaria;
– libertà gestionale nelle transazioni economiche e libertà contrattuale.
Adesso la Case University è al primo posto nello Stato dell’Ohio per commercializzazione
tecnologica e rientra nella top ten delle start-up degli Stati Uniti, secondo Entrepreneur
Magazine.
Una valida esempli?cazione dei risultati ottenuti dalla collaborazione tra università e
industrie è senza dubbio la “veste” a elettrodi della CardioInsight: una tecnologia innovati-
va che consente il monitoraggio delle attività cardiache di super?cie senza essere invasiva.
53
university, entrepreneurship
I am honored to have the opportunity to take part in this exciting conference,
and I feel privileged indeed to be included on such an esteemed panel.
I also want to thank AREA for not only hosting my participation in this con-
ference but more importantly for their continued collaboration with my insti-
tution, and partnership with the city of Cleveland, and the State of Ohio. Our
budding relationship will add signi?cant value to your regional research and en-
terprise system, as well as ours in the United States.
First, since my perspectives, like yours, are shaped by my professional experi-
ence, let me tell you a bit about myself. My current position is Vice President of
Research at Case Western Reserve University in Cleveland, Ohio. Case is a major
academic research institution where we conduct over $400M in research an-
nually. We have a $1.6B endowment, $800M operating budget and my division
manages several thousand transactions per year.
I am an engineer by training and have worked in industry, government, and
academia. I have also held various engineering, marketing, and business devel-
opment positions in those sectors. In addition, I have been an entrepreneur and
an early stage venture capitalist. I believe all of these experiences have broadened
the perspective I bring to this subject.
Before we begin, let me note also that I recognize the system we work under
in the United States is different than the one here in Italy. It is truly my hope that
you ?nd some ideas and tools that you can borrow from what I am about to share
with you. I encourage you to look for the similarities, not the differences.
The universal truth we all share – as true in Italy as in the United States and
everywhere else in this wildly competitive modern world – is that there is a sim-
ple, three-ingredient formula you have to follow if you want to build a forward-
looking, 21
st
Century economy. Here’s the formula:
People. Technology. Capital.
That’s it. I told you it was simple. All you need are: People, including world-class
talent, educators and students; Technology, to drive our skill-based industries;
and Capital, in the form of venture capital, institutional dollars, and private
investment.
Bringing all three elements together and maximizing their effectiveness is
the hard part, however. That’s what we are trying to do at Case. I’m very proud of
our success in re-energizing the commercialization effectiveness of our research
enterprise, and I’d to share some of our experiences with you.
I also want to highlight some of the strides we have made recreating and
strengthening the Technology Transfer Of?ce since I joined the university in 2001.
54
The very term “research commercialization” suggests that what we are talking
about here is not strictly an academic endeavor. Industry plays a critical role in
making technology transfer happen, so it must be a major part of the equation.
In America, industrial-sponsored research is still relatively small compared
to federal and state funding, but it is a rapidly growing source, accounting for
5-15% of total academic research dollars, about $50B a year.
In bringing the worlds of academia and industry together, we must recognize
that the cultures of companies and universities have pronounced differences.
The two have con?icting motivations even where commonality of interests ex-
ists, as this slide demonstrates. Universities are drawn to translational research
for reasons of institutional prestige, which I’ve labeled “Ego and Envy.” Compa-
nies are motivated by a desire to make a pro?t and beat their competition, which
I’ve summed up as “Fear and Greed.” Similarly, their conceptions of time are very
different, with industry generally displaying a much greater sense of urgency
than the more leisurely-paced academic world.
TWO WORLDS COME TOGETHER
UNIVERSITY INDUSTRY
Fig. 2: Two worlds come together
Ego & Envy
Time = Semester
Translational
Research
Business
Development
Fear & Greed
Time = Money
55
university, entrepreneurship
And it is not just culture that separates industry and academia – their missions,
goals and objectives are very different as well, as you can see in this slide.
For the university, the pursuit of knowledge is its own reward. For the com-
pany, knowledge is an asset to be managed for pro?t. The university prizes ac-
ademic freedom and open disclosure. The company values con?dentiality and
limited public disclosure.
But despite these diametrically opposed outlooks, there exists a clear align-
ment of common interest: namely, the commercialization of new and useful
technologies. Their motivations may be entirely different – the university sees
an opportunity for teaching, conducting research, service to society and econom-
ic development; the company hopes for pro?t and product R&D – yet there it is,
nevertheless: a huge mutual interest.
And in that commonality lies an enormous opportunity.
We are capitalizing on this opportunity at Case through direct funding, con-
sortia and other innovative approaches, such as government matching fund pro-
grams to leverage investment dollars.
CONFLICTING VALUES, COMMON INTEREST
UNIVERSITY INDUSTRY
Knowledge for
Knowledge’s Sake
Academic Freedom
Open Disclosure
Management of
Knowledge for Pro?t
Con?dentiality
Limited Public Disclosure
Fig. 3: Con?icting values, common interest
Teaching
Service
Commercialization
of New and Useful
Technologies
Pro?ts
Product R&D
Research
Economic
Development
56
Allow me to tell you a little bit about my school, of which I am very proud.
Case Western Reserve University is located, as I mentioned, in Cleveland,
Ohio, on the shores of Lake Erie, the smallest of the ?ve “Great Lakes” in the
“Great Lakes Region” of the United States and Canada. The region immediately
surrounding Cleveland is known as Northeast Ohio or NEO.
Our campus is situated at Cleveland’s University Circle, a picturesque, 500-
acre, park-like area that is home to more than 40 cultural, medical, educational,
religious and social service institutions.
University Circle, I might add, is adjacent to the Cleveland neighborhood
known as Little Italy. Many descendants of the city’s ?rst Italian immigrants still
live there, and it is home to a number of popular restaurants, bakeries and shops.
Case is the only independent, research-oriented university in a large region
bounded by Pittsburgh, Pa. and Rochester, N.Y. on the east, Nashville, Tenn. on
the south, and Chicago, Ill. on the west.
Cleveland, OH
New York City, NY
Washington, DC
CLEVELAND, OHIO USA
Fig. 4: Cleveland, Ohio USA
57
university, entrepreneurship
Under dynamic new leadership, Case Western Reserve University has re-de?ned
its mission – to Improve, Imagine, Enrich and In?uence – and its role as a 21
st
century research institution.
Known informally as CWRU, or simply “Case”, it is one of our nation’s lead-
ing research institutions.
Its roots stretch back to Ohio’s wilderness days with the founding, in 1826, of
Western Reserve College. Its present form was shaped by the unique merger in
1964 of Western Reserve University and the Case Institute of Technology.
Case is distinguished by its strengths in education, research, service and ex-
periential learning, and offers nationally recognized programs in the Arts and
Sciences, Dental Medicine, Engineering, Law, Management, Medicine, Nursing,
and Social Sciences.
CASE WESTERN RESERVE UNIVERSITY (CWRU)
Improve, Imagine, Enrich, In?uence
– Among the nation’s leading research institutions
– Founded in 1826
– School of Medicine and Biomedical Engineering
programs are the primary technology transfer
pipelines
Fig. 5 Case Western Reserve University (CWRU)
58
In the fall of 2008, the University had an enrollment of 4,356 undergraduates
and 5,458 graduate and professional students, representing all 50 states and 87
countries. It has approximately 2,600 full-time faculty and 110,000 alumni.
Last year, Case awarded 793 undergraduate degrees, 951 master’s degrees, and
718 doctorates, for a total of 2,462.
The school’s primary research areas are Medicine, Engineering, and Biomedical
Engineering.
With over $407 million in total research funding in 2008, it is listed as one of
the Top 25 medical schools in the United States. Its funding sources include the
National Institutes of Health, the National Science Foundation, state and local
government, and support from industry.
CWRU – A LEADING RESEARCH INSTITUTION
The University
– Approximately 10,000 Students
– 2,600 Full-Time Faculty
– 110,000 Alumni
Primary Research Areas
– Medicine
– Engineering
– Biomedical Engineering
Research Funding
– $407 Million (all sources, 2008)
– Top 25 Medical School (U.S. News & World Report)
– Funding Sources
– National Institutes of Health
– National Science Foundation
– State and local government
– Industry support
Fig. 6: CWRU – A leading research institution
59
university, entrepreneurship
When I arrived at Case, the Technology Transfer Of?ce was in pretty bad shape.
The program was disorganized, suffered from a lack of resources and resolve, and
was, in general, producing very poor results. But gradually, through diligence and
hard work, we began to see some successes by focusing on capital and talent.
Technology Transfer was re-organized around several basic principles, includ-
ing tighter, more centralized control, improved customer service, a business-
savvy staff, and the authority to move quickly on deals.
A key to the turnaround was our involvement in something called the Early
Stage Capital Task Force, made up of a group of people in Northeast Ohio who
were trying to precisely de?ne the venture capital situation.
It took us three years to understand the issue in all its complexities, but we
eventually identi?ed the stages of funding and tracked amounts of funding to
Northeast Ohio.
The result was called The Greater Cleveland Venture Capital Report. This
document has become the roadmap to building the venture capital industry in
our region.
CWRU TECHNOLOGY TRANSFER
Starting Point
– Disorganized
– Lack of Resources and Resolve
– Poor Results
Principles
– Centralized Function
– Customer Service
– Business-Savvy Staff
– Authority to Move Deals Quickly
Early Efforts
– Edison Biotechnology Center
– Enterprise Development Inc.
Keys
– Early Stage Capital Task Force
– Entrepreneurship Task Force
– GCVC Report
– JumpStart and BioEnterprise
– Support incentives for VC investors
– Recruitment of top talent to region
– innovative policies
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Fig. 7: CWRU Technology Transfer
??????????????????????????????????????????????
60
Two of the innovations springing from this effort are called JumpStart and
BioEnterprise, both of which I will describe in detail later.
The report identi?ed what we needed to do to address the lack of available
capital and talent. Speci?cally, it paved the way for collaboration, cooperation
and partnership among research institutions, foundations, angels, venture capi-
talists and the state.
Even more importantly, it was designed to reduce risk and increase deal ?ow
in order to attract more venture and capital to the region.
Nationally Ranked Of?ce
– Ranks in Top 10 for start ups, licensing, revenue, disclosures
received, and cumulative licenses
– Ranks #1 in the State of Ohio
– Team of professionals focused on speci?c schools
and academic departments
CWRU TECHNOLOGY TRANSFER – TODAY
Fig. 8: CWRU Technology Transfer – Today
Here is where we stand today.
Case’s Technology Transfer Of?ce, from its dismal numbers in 2001, is now
ranked Number One in Ohio, and in the Top 10 nationally, for start-ups, licens-
ing, revenue, disclosures received, and cumulative licenses. Our team of profes-
sionals is focused on speci?c schools and academic departments.
Last year alone, Case’s spinouts attracted more than $100M in venture capital.
From a regional perspective, over the last three years Northeast Ohio has at-
tracted more than $500M in venture capital, and is well on its way to its goal of
$1.2B over the next ?ve years.
61
university, entrepreneurship
Let’s return to the formula I mentioned at the beginning. Any successful high-
tech economic development strategy must address three factors – people, tech-
nology and capital – and academia, government, and industry have a role to play
in all of them.
The university’s core mission must be to build centers of excellence that will
attract top researchers, scholars and students, who will in turn develop the new
technologies that can generate the necessary capital to make technical transfer
possible.
People. Technology. Capital.
To allow this to happen as quickly as possible, government and academia
must develop programs that accelerate the process of turning research concepts
into practical products and services.
And that, of course, brings industry into the picture, creating the companies
that will produce the jobs and spur the economic development of the market-
place of the future.
INNOVATION FORMULA
FEEDING THE INDUSTRIES OF TOMORROW
Academia Government Industry
PEOPLE
TECHNOLOGY
CAPITAL
Fig. 9: Innovation Formula
62
Our spinoffs have not only been developed from research at Case, but also as a re-
sult of our expanded, leveraged ties in the region. We call this our “Innovation
Network”, and it has given us great ?exibility in acquiring funding for start-ups.
An important part of this network is Case Technology Ventures, a pre-seed
venture capital fund managed by our Tech Transfer Of?ce that promotes promis-
ing start-up opportunities.
The network also includes two world-class hospitals that neighbor the uni-
versity – University Hospitals Case Medical Center and the Cleveland Clinic
Foundation. This strong medical presence is a central point of commercializa-
tion for the region.
Two other organizations round out our Innovation Network, and I’d like to
tell you a little about each of them.
INNOVATION NETWORK: EXPANDED TIES TO THE REGION
Case Western
Reserve
University
JumpStart
BioEnterprise
The Cleveland
Clinic
University
Hospitals
Fig. 10: Innovation Network: Expanded Ties to the Region
Working together
to accelerate
technology commercialization
and new company creation
63
university, entrepreneurship
BioEnterprise is a business accelerator created to help emerging medical device,
biotechnology and health care service ?rms attract venture capital, as well as at-
tract bioscience companies to the region. It is a joint initiative by Case and the
area’s leading hospitals and health care institutions, and it is funded by the State
of Ohio and local foundations.
BioEnterprise has helped attract $585 million in capital to medically oriented
companies in Northeast Ohio over the last four years. Total capital investment in
such ?rms over that period was $860M, so you can see what an important role
BioEnterprise plays. And according to a recent BioEnterprise analysis, Ohio has
become the leading state between the East and West coasts – and one of the top 5
in the nation – for hosting health care venture capital ?rms.
BioEnterprise
11
JumpStart
12
Fig. 12: JumpStart
Fig. 11: BioEnterprise
Welcome to BioEnterprise
Overview
BioEnterprise is a business formation, recruitment, and acceleration
initiative designed to grow health care companies and commercialize
bioscience technologies. Based in Cleveland, BioEnterprise’s founders and
partners are Cleveland Clinic, University Hospitals, Case Western Reserve
University, Summa Health System and BioInnovation Institute in Akron.
The initiative comprises the collective activities of BioEnterprise and its
partners’ commercialization of?ces: the Case Of?ce of Technology Transfer,
Cleveland Clinic Innovations, University Hospitals Case Medical Center -
Center for Clinical Research and Summa Enterprise Group.
Companies include emerging medical device, biotechnology, and health
care services ?rms. Each year, the BioEnterprise groups choose a select
number of companies on which to focus. The resources and networks of the
BioEnterprise partners are directed to help those companies achieve greater
levels of business success.
JumpStart funds high-growth
businesses and ideas, works
with their founders to develop the
businesses into venture-ready entities
and simultaneously celebrates
Northeast Ohio’s early-stage company
successes.
READ MORE
64
JumpStart, Inc. is a venture capital development organization created in North-
east Ohio to accelerate the progress of high-growth, early-stage businesses.
JumpStart is a relatively new addition to the Innovation Network, but this seed-
funding entity is already one of the most active investors in the United States. It
is, in fact, ranked in the Top 10 by Entrepreneur Magazine.
JumpStart is owned by CWRU and NorTech, which is the local high-tech
chamber of commerce, and is funded by the State of Ohio and local foundations.
JumpStart has invested in several of Case’s spinout companies.
Government also must play a role in research commercialization, and I’d like
to speak to you about several state programs in Ohio that contribute to our tech-
nology transfer success.
– Research Commercialization Program (RCP)
– Grants advance major research initiatives to impact Ohio's economic development and
provide long-term improvements in the State's technology base
– Now a 10-year, $1.6B initiative to:
– Build world-class research capacity
– Support early stage capital formation and the development of new products
– Finance advanced manufacturing technologies to help existing industries become
more productive
OHIO THIRD FRONTIER PROJECT
The Research Commercialization Program, or RCP, is part of Ohio Third Frontier,
a voter-approved initiative to increase investment in research and technology.
The RCP was enacted by legislation in 2003.
The purpose of the program is to award grants to advance major research ini-
tiatives that have the potential to increase economic development and provide
long-term improvements to the state’s technology base.
Originally supported by funds received by the state as part of a settlement in
lawsuits against the tobacco industry, the RCP has grown to become a 10-year,
$1.6B initiative to build a world-class research capacity in the State of Ohio. The
RCP supports early-stage capital formation and the development of new prod-
ucts, as well as ?nancing advanced manufacturing technologies to increase the
productivity of existing companies.
The list of RCP and other Third Frontier success stories is a rapidly growing
one. Some of these include:
Fig. 13: Ohio Third Frontier Project
65
university, entrepreneurship
– The Center for Stem Cell and Regenerative Medicine.
– Genetics of Gastrointestinal Cancers.
– Ohio Neurostimulation and Neuromodulation Partnership.
– Targeted Nanoparticles for Imaging and Therapeutics.
– The Case Center for Surface Engineering.
OHIO THIRD FRONTIER PROJECT (CONT.)
FOCUS AREA
– Biomedical
– Advanced/alternative energy
– Instruments-Controls-Electronics (ICE)
– Advanced materials
– Advanced propulsion
FUNDING
– $23M Engineering & Physical Science
– $23M Biomedical
– Award size: $2M- $5M
The Third Frontier Program aims to take Ohio’s technological strengths and
maximize their economic development potential. The focus areas zero in on the
things Ohio does best – biomedicine, alternative energy, Instruments-Controls-
Electronics, advanced materials and advanced propulsion. Nearly $50M has been
set aside to fund research projects, with average awards of $2 to $5M.
Projects are collaborations among Ohio higher education institutions, non-
pro?t research organizations, and Ohio companies. To receive an award, the plan
must demonstrate collaboration among the partners, as well as commercializa-
tion potential. In addition, the partners must put up funds to match the state
award. It is very important that a signi?cant portion of the money be spent in
Ohio, and the inclusion of a solid corporate partner is considered crucial.
Fig. 14: Ohio Third Frontier Project (Cont.)
66
The Ohio Capital Fund
15
Another program established by the state is the Ohio Capital Fund, a fund of
funds professionally managed and designed to promote private investment in
Ohio companies in the seed or early stage of business development.
The Ohio Capital Fund currently has about $150M of commitments from pri-
vate resources for investment in quali?ed venture capital funds, and these VC
funds commit to investing at least half of the Ohio Capital Fund monies in Ohio-
based enterprises.
By actively making commitments to venture capital funds, the Ohio Capital Fund
is acting as a catalyst to promote venture capital investments in promising Ohio companies.
TECHNOLOGY TRANSFER AND COMMERCIALIZATION
CWRU-FUNDED START-UPS
Cardiovascular
Medical Devices
Fig. 16: Technology Transfer and Commercialization
Fig. 15: The Ohio Capital Fund
The Ohio Capital Fund, a fund of funds, was established by the State of Ohio to help increase
private investment in Ohio companies in the seed or early stage of business development. To
date, the Ohio Capital Fund has obtained $150 million of commitments from private resources
for investment in quali?ed venture capital funds. These venture capital funds commit to invest
at least half of the Ohio Capital Fund monies in Ohio-based companies, corporations and
individuals. The Ohio Capital Fund is actively making commitments to venture capital funds
and through these commitments, the Ohio Capital Fund acts as a catalyst to promote venture
capital investment in promising Ohio companies.
The Ohio Capital Fund
What is The Ohio Capital Fund?
67
university, entrepreneurship
These are some of the start-ups that have emerged at Case. I’ll talk about a few of
them in a moment, but ?rst, I wanted to say a few words about university-based
startups in general.
No one could question the impact universities have on the development of
many of our most successful, forward-thinking companies. Hewlett-Packard,
Cirrus Logic, Genentech, Google and Lycos are just some of the world-renowned
companies born as a result of technological inventions by faculty, students and
staff at American universities.
And these are only the most high-pro?le examples. There are many, many more
university spin-offs enjoying success, with new ones being created all the time.
University spin-offs share a number of common factors. Typically, they are
high-performing companies, and they are much more likely to go public than
the average new ?rm.
According to one estimate, the percentage of American university spin-offs
that have gone public exceeds 8%, a ?gure 114 times the average for a new com-
pany in the United States.
Spin-offs are also much more likely to receive funds from venture capitalists
and business angels than the average start-up.
In addition, university spin-offs are less likely than the average start-up to
fail. Of 6,300 start-up companies founded since 1980 in the United States, over
60% remain operational today, which is considerably higher than the average
survival rate for new companies in the U.S.
Finally, university spin-offs are more pro?table, on average, than the typical
high-technology start-up. So by almost any measure, the value of spin-offs is un-
questionable.
CARDIOINSIGHT, INC.
Dimension 1
– Space
– Equipment
– Legalities
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
Fig. 17: CardioInsight, Inc.
??????????????????????????????????????????????
68
To give you an example of what we’ve been doing at Case, I’d like to tell you about
one of our spin-offs, CardioInsight Technologies, Inc.
The technology behind the company was more than 20 years in the making.
It involves the use of a vest with more than 200 electrodes, embedded along with
a proprietary software algorithm to precisely measure the surface potential of the
heart. It is a quantum leap over current technology – the EKG – and displaces more
invasive technology involving a catheter-based probe and CAT or MRI scanning.
In short, it is considerably less invasive, much less costly, and more precise
than any other existing technology.
Although it is a biomedical application, the principal intellectual property is
the software that interprets the data from the vest’s electrodes in real time.
This and the following slides provide a timeline for the steps that led to the
commercialization of this trailblazing technology and the creation of CardioIn-
sight. As you can see, the initial steps occurred in 1994, which we call Dimension
1, involved what could be described as the basics: ?nding of?ce and lab space,
acquiring the necessary equipment and taking the required legal steps, such as
incorporation and retention of legal counsel.
CARDIOINSIGHT, INC.
Dimension 1
– Space
– Equipment
– Legalities
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
Dimension 2
– Business Plan
– Revenue Plan
– Locate Providers
– Make Investment
Fig. 18: CardioInsight, Inc.
??????????????????????????????????????????????
69
university, entrepreneurship
The original researcher in the development of the new technology left Case to go
to Washington University, but two of his students were very enthusiastic about
the technology and wanted to form a company to commercialize it.
So they turned to us, and Case agreed to provide seed capital and help formu-
late a plan.
As it turned out, neither of the founder researchers was appropriate to lead a
start-up company, so case found an “interim CEO” and project manager around
which to form the company.
This team led the company through the Dimension 2 steps in its develop-
ment. A business plan, including a revenue plan, was drafted and re-drafted.
CARDIOINSIGHT, INC.
Dimension 1
– Space
– Equipment
– Legalities
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
Dimension 2
– Business Plan
– Revenue Plan
– Locate Providers
– Make Investment
Dimension 3
– Find Capital
– Coach Leaders
– Recruit a Players
– Help Form Board
Fig. 19: CardioInsight, Inc.
Venture capital was acquired from several sources, including JumpStart and Case
Technology Ventures. Company leaders are receiving coaching from experts at
BioEnterprise and our own Technology Transfer Of?ce, and top researchers and
doctors are being retained as advisors and consultants. A board is also being
formed, on which the Technology Transfer Of?ce has a seat.
In addition to providing start-up capital, Case helped to ?nd ?rst round ?nanc-
ing from other sources, speci?cally, the previously mentioned JumpStart and
Draper Triangle Ventures. Each party invested $250,000, for a total of $750,000
to launch the company.
??????????????????????????????????????????????
70
These funds allowed for the development of an experimental prototype and
the testing of the device on humans.
CARDIOINSI GHT, INC.
Dimension 1
– Space
– Equipment
– Legalities
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
Dimension 2
– Business Plan
– Revenue Plan
– Locate Providers
– Make Investment
Dimension 3
– Find Capital
– Coach Leaders
– Recruit a Players
– Help Form Board
Today
The success of the clinical prototype has
helped the company to attract a $5M “A”
round ?nancing.
Fig. 20: CardioInsight, Inc.
Today, CardioInsight stands on the verge of great success. Tests conducted with
the clinical prototype proved so successful that the company attracted a $5M “A”
round ?nancing. It is currently raising the round of $5M, with $4M of venture
capital committed to date.
This seed funding allows for chronic animal studies to take place, the ?rst hu-
man trials, expansion of IP protections, and a raise of Series A investment.
For Case Technology Ventures, a $5M pre-seed fund at Case Western Reserve
University, CardioInsight is our prototype of a successful university spinoff.
??????????????????????????????????????????????
71
university, entrepreneurship
CardioInsight, Inc.
ECG
I
•Electrical activity on
the heart’s surface
•Electrical activity on
the heart’s surface •Heart
•Geometry
Prototype 224
Lead Vest
CT Scan
NON INVASIVE
HIGHLY SPECIFIC
COST EFFECTIVE
HIGHLY SENSITIVE
21
CARDIOINSI GHT, INC.
Prototype 224
Lead Vest
The ?edgling company is still evolving, but it is well on its way to establishing
itself in the cardiovascular diagnosis market. CardioInsight is an outstanding
example of a technology originating in university research and gaining com-
mercial success.
Fig. 21: CardioInsight, Inc.
NEUROS MEDICAL, INC.
Dimension 1
– Space
– Equipment
– Legalities
1990 1992 1994
1996 1998 2000 2002 2004
2006
2008
Dimension 2
– Business Plan
– Revenue Plan
– Locate Providers
– Make Investment
Dimension 3
– Find Capital
– Coach Leaders
– Recruit a Players
– Help Form Board
Today
The success of the clinical prototype has
helped the company to attract a $5M “A”
round ?nancing.
Fig. 22: Neuros Medical, Inc.
CT Scan
Electrical activity on
the heart’s surface
Heart Geometry
??????????????????????????????????????????????
72
Another emerging business that began in our school’s research labs is Neuros
Medical, Inc., which is attempting to commercialize neurostimulation technology
developed by two researchers at the Case Department of Biomedical Engineering.
This technology, known as “Nerve Block,” delivers high-frequency stimula-
tion to sensory nerves in the peripheral nervous system to block chronic pain.
Because it operates at a much higher frequency than conventional neurostimula-
tion devices, the Nerve Block technology is able to block pain completely, as op-
posed to simply masking it.
The company will target it toward patients with chronic pain, especially those
with residual limb pain, a common occurrence after amputation. The technology
also has potential applications for cancer pain, diabetic neuropathy, cerebral palsy,
multiple sclerosis, and stroke.
Case has acquired a patent for this unique high-frequency application and
has an additional two patents pending. Case put up seed money, BioEnterprise
helped with the business, and an organization called North Coast Angels com-
mitted to $500,000 to $600,000 in capital.
All this happened amazingly quickly. The company went from inception to
launch in less than a year, and successful clinical tests helped the company to at-
tract a round ?nancing of $5M.
Neuros Medical is well on its way to becoming the latest of our successes at
Case. It, as well as CardioInsight and the other spin-offs we’ve been involved with
at Case, demonstrate what can happen when you bring those three essential in-
gredients together: People, Technology and Capital.
NEUROS MEDICAL, INC.
Fig. 23: Neuros Medical, Inc.
73
university, entrepreneurship
As you can see from this overview, those three keys apply to us and apply to you.
I know I’ve taken every bit of my allotted time so I’ll close here, but I look for-
ward to taking any questions you might have.
I want to thank you once again for inviting me to speak with you today about
the efforts we are making at Case Western in the area of research commercializa-
tion. I am especially grateful to have had the opportunity to visit your beautiful
city and country. Back home, I enjoy going to Little Italy. Believe me, I like Big
Italy even better.
On the screen is our website and the mailing address of the Technology Trans-
fer Of?ce at Case Western University. Please contact us if you would like to learn
more about our programs.
Again, thank you for your attention.
CONTACT US
TECHNOLOGY TRANSFER AT CASE
To learn more, please visit our web site:http://techtransfer.case.edu
Technology Transfer Of?ce
Case Western Reserve University
10900 Euclid Avenue, Sears Building, 6th Floor
Cleveland, OH 44106-7219
Fig. 24
doc_265241544.pdf