From State of the System Magazine, Fall 2010

Texas Ignition Fund

It’s hard to calculate the number of ways in which university discoveries impact our everyday lives. From cell phones to skyscrapers to flat panel televisions, technologies developed on university campuses have profoundly changed the way we work, live and play. Add to that groundbreaking advancements in medicine, national security, environmental protection, alternative energy and economic development and we start to scratch the surface of just how vital university research and development are to the future of Texas, the nation and the world. But talk to a university researcher or scientist and they’ll tell you the road from research to invention to realized commercial product is paved with difficult milestones.

“Investors are taking fewer risks in today’s economic climate,” says Cathy Swain, assistant vice chancellor for commercial development in the Office of Research and Technology Transfer at The University of Texas System. “This amplifies an existing funding gap between basic research and marketable products.”

Currently, the federal government offers a wide range of funding aimed at bolstering economic competitiveness though the majority of this support is designated to basic research. While corporate entities support a small percentage of university research, private investors mainly invest in later-stage product opportunities with proven concepts and working prototypes. This funding gap — a so-called “valley of death” in terms of financing — makes the journey from marketable invention to commercial product difficult, to say the least.

“The challenge,” says Cathy Swain, “is to bridge the two established funding streams with a proof-of-concept program that ensures new discoveries and life-changing technologies find their place in the market.”

Recognizing the strength of the UT System as a robust research and commercialization engine, the UT System Office of Research and Technology Transfer launched Ignite Texas! to help turn promising inventions developed at UT institutions into realized products that stimulate our economy and help ensure a vibrant future for our state and nation. Comprised of ten major programs, Ignite Texas! supports a wide variety of technology commercialization aspects, from the funding of scientists and inventors to the creation and maintenance of start-up companies.

Designed to enhance collaborative efforts among UT institutions, the initiative took steps to streamline operating policies and procedures at UT institutions and offers an Entrepreneurship Training Series to faculty, staff and students.

In addition, Ignite Texas! established a Systemwide intellectual property technology solution to inventory, manage and market IP developed by UT institutions — a considerable accomplishment given that in 2008 alone, UT institutions reported 716 new invention disclosures, 99 U.S. patents issued, 194 IP licenses and options and the formation of 25 start-up companies.
Texas Ignition Fund

Critical to the success of Ignite Texas! is the $2 million Texas Ignition Fund (TIF), a proof-of-concept program designed specifically to help inventors turn their discoveries into marketable intellectual property. Established in 2007 by the UT System Board of Regents, the TIF provides early stage grants of up to $50,000 for the development and maturation of research discoveries at the 15 UT institutions.

“Global competitiveness has rapidly changed the role higher education institutions play with regard to economic development, says Dr. Keith McDowell, vice chancellor for research and technology transfer at UT System. “The Texas Ignition Fund enables UT institutions to develop promising discoveries into marketable products through prototype development, product testing and analysis of business and market opportunities.”

Most importantly, the TIF promotes innovation, translation and commercialization of new ideas and technologies by helping UT inventors move their discoveries past the “valley of death” and into the world of the living by reducing the risk for potential investors, licensees and entrepreneurs.

From breakthrough applications in emerging markets such as biofuels to revolutionary healthcare innovations to new technologies that provide enhanced energy efficiency, safety and security across a broad spectrum of industries, projects that have received TIF funding are as diverse as the 15 UT institutions. In three rounds of funding, the TIF has awarded grants totaling $1.2 million to 27 projects at UT institutions across the state, including several collaborations among researchers at different institutions.

From Start to Finish

Though diverse, projects that have received TIF funding do have a common thread — they all show extraordinary promise and they are all in the very early stage of development when funding for personnel, equipment, supplies, instrument use fees and business plans are the most crucial.

According to the National Council of Entrepreneurial Tech Transfer (NCET2), [http://www.ncet2.org/] startup organizations that began on a university campus not only account for some of the most innovative companies in the market today, but also some of the more successful. Take Google, Netscape, Sun Microsystems and Cisco for example — today they’re household names around the world, but in the not-so-distant past they were university startups. Statistics show that 68 percent of university startups created between 1980 and 2000 remained in business in 2001, while regular startups experienced a 90 percent failure rate.

Through proof-of-concept programs such as the Texas Ignition Fund, today’s visionaries have the time and resources they need to establish next-generation products that will pique the interest of venture capital investors. In line with the state’s two other economic development efforts — the Emerging Technology Fund and the Texas Enterprise Fund, both established by Governor Rick Perry — the Texas Ignition Fund aims to increase research and technology transfer activities at UT institutions by fostering innovation that will enhance the health and well-being of Texas citizens and ignite new industries that create opportunities for our next-generation.

Over the past five years, the UT System and its institutions have spent more than $20 million to fund proof-of-concept projects to commercialize intellectual property developed at UT campuses. With two more rounds of funding slated for the upcoming year, the Texas Ignition Fund as a key initiative of Ignite Texas! will continue to fuel innovation and progress across Texas by investing in our state’s most critical asset: our people.