Orin Herskowitz, from the tech transfer office at Columbia University, recently published an overview the Columbia’s Executive-in-Residence (XIR) program along with data from similar programs at 26 other universities. These programs, also referred to as Entrepreneurs-in-Residence (EIR) programs, help to bring expertise in-house for various purposes but the general theme is to provide input, advice, connections related to the commercialization of technology. Some EIR programs have been derived from similar programs at VC firms where an experienced entrepreneur, who typically has exited a successful venture, works in the firm to help evaluate deals and eventually finds a startup to join, with the backing of the firm. For universities, EIR programs are broader with different expectations and outcomes, spanning the commercialization spectrum. A 2013 survey by AUTM shows the range of EIR tasks across different programs:
As you can see, working with university startups (new or established) is a common activity. The survey also reports on the four critical aspects of an EIR program: compensation, length of engagement, time commitment, and number of concurrent participants:
Like Columbia, UNC has evolved, and continues to evolve, external engagement programs over time to better meet our needs. Our original EIR program was patterned after the VC-type program where we paid EIR’s to consult with faculty and their startups. The hope was the EIR would find an opportunity, engage as part of the management team (CEO, CSO), and spin a company out. The program had several drawbacks: 1) the EIR had no defined period of participation so it made termination a much more difficult conversation than simply not renewing a contract, 2) the domain expertise had to be a good fit with the technology being spun out into a company, a small chance given the diverse areas of life science we are engaged in, 3) many of these opportunities were very early stage which did not require full-time management, and 4) unlike a VC, the university does not have investment capital to put alongside the EIR in spinning the company out.
An alternative approach has been taken to engage external expertise in the spinout process. UNC’s MicroStart program provides compensation to an entrepreneur to build a business case for spinning out a company. The business case, the precursor to a business plan, is the the rationale for starting the venture. It answers a number of key questions:
- What are the key differentiators of the technology?
- What is the product and product features and benefits?
- What is the application, market need?
The purpose of the program is two-fold. First, engaging experts who can make the link between technology attributes and market fit, providing a commercial rationale for the technology. More importantly, it engages an entrepreneur to take a deep dive into the technology. The hopeful outcome is the entrepreneur falls in love with the technology and wants to take the next step in commercializing the technology (e.g. company incorporation, taking the lead role in management, licensing the technology, etc). A few features of the program are worth mentioning:
- Scope. For each project, a clear scope and deliverables are established so both parties know what to expect. The timeframe is not usually prescribed in the agreement but the general understanding is that working on the project part-time, we expect a result in 2-3 months.
- Compensation. The compensation, while not significant, provides a contractual agreement that goes beyond volunteering or the typical EIR’s monthly retainer. This contractual arrangement implies work beyond a cursory review of the technology.
The program has resulted in a number of entrepreneurs who have become more fully engaged with a startup.
Another engagement program, usually the pre-cursor to a MicroStart, is our Technical Advisory Panel (TAP). When we are in the early stages of thinking about spinning a company out of the university, we like to expose the technology to a group of experts. These may be free-lance consultants, technologists, entrepreneurs, or business executives (we rarely bring in investors since their mindset is usually overly critical at this stage of technology development). Given the diverse nature of many of the technologies and their stage of development, the expectations of a TAP are rather loosely defined. The format involves gathering a group of 4-6 people with relevant domain expertise along with the licensing officer for a 1-2 hour meeting. The faculty inventor puts together a set of slides, with some coaching about the level of technical content, and presents to the group. We try to put together a series of questions for the group to discuss after the presentation. These might include things like “Is this the best application for the technology?” or “What other approaches would be competitive to this approach?” or “Are there industrial partners we should be talking with?”. In some cases, the technology is very early and the general consensus is “More date, please”. In other cases, the discussion can go on for hours around how to apply the technology, the best business model, or intellectual property strategy. From the TAP, we may find someone to do a MicroStart.
Having developed these programs and after reviewing the approach at Columbia, there still is room for a more general EIR program, but structured differently than our original approach. Having a cohort of EIRs engaged on an ongoing basis (monthly retainer vs specific projects) could provide a number of advantages: 1) it gives easier access to a group of experts who can span a number of technologies with their expertise, 2) crosstalk and discussion among the EIRs could be beneficial, 3) longer engagement allows the EIR to learn more about how the university does tech transfer and startups and provide suggestions on how to improve the process.