Venture DevelopmentTechnologies developed at UT Southwestern can be commercialized through either licensing or the development of a new company (a start-up). The Venture Development group is charged with developing start-up companies, and this activity benefits the university directly through the ownership of equity and other license derived compensation, and indirectly through the advantages to university researchers and the community and increased university-industry relations. The Venture Development group actively seeks out UT Southwestern technologies suitable for entrepreneurial venture development and participates in the development of new companies based on those technologies. Venture Development projects benefit from the accumulated experience of the staff, who have in aggregate nearly 100 years' experience in business development, research and technology management in pharmaceutical, biomedical and specialty chemical industries. The strategy for UT Southwestern's venture development program is not to measure success by the total numbers of start-ups incorporated. Rather, we are focused on the establishment of quality entities, which have substantial technologies, experienced management and adequate funding to achieve their strategic goals and build value for the equity holders, which includes the university and inventors. In some cases we have combined multiple UT Southwestern technologies into a single strong company, rather than forming multiple small start-ups. The ProcessWhen a new technology is submitted to the Office for Technology Development it is evaluated by the technology analyst who interviews the inventors and then checks for prior art, patents or other publications in various public and private subscription databases. The technology is reviewed by the licensing and venture development OTD staff for commercialization potential, including patent possibilities, likely interested parties for licensing, and potential for placement into a start-up company project. Those technologies that seem to have the special potential to become part of a new commercial entity are selected by Venture Development to become a new venture project and a project leader takes responsibility for it. In the following weeks and months the project leader will investigate the potential market, comparable companies in the space, commercialization investments in similar other technologies, and all other resources that would be needed to establish a start-up based on the core technology. Throughout this process a "value proposition" begins to take shape and at some point a start-up manager is identified. The project leader serves as the start-up manager for the internal development phase and until an outside person is named to head the new entity. Technologies are licensed into the start-ups from the university in exchange for equity in the company. The license equity is shared with the inventors. In addition, the university may receive additional equity as founders’ equity for value added into the start-up through the company formation and business development work. Unlike the license equity, founders’ equity is not shared with inventors but rather is retained by the university as a means of defraying its sunk-in costs related to forming the company. Inventors may, on a case by case basis, receive founders’ equity if their continued participation in the company is required but that equity cannot be greater than the equity received by the university. The start-up process operates with a team, typically led by a member of the Venture Development group working with a member of the Technology Licensing group, the faculty inventors, outside entrepreneurs, advisors from industry, the venture investment community, and others as needed. The Steps
History of success launching start-ups
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