Opportunities and Challenges in Technology Transfer and Start Up Creation in a Research University Rick McCullough Vice President for Research

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1 Opportunities and Challenges in Technology Transfer and Start Up Creation in a Research University Rick McCullough Vice President for Research Founder, CSO, Board Member Plextronics and Founder, CEO, President and Board Member Liquid X Printed Metals November, 2011

2 Enrollment Carnegie Mellon University 5,951 Undergraduates 5,420 Graduate Students.and growing Faculty 1368 Faculty, including Tenure Track, Research and Lecturer Track Operating Budget $900M Endowment $1.1B

3 Snapshot of Carnegie Mellon Seven colleges: Computer Science, Engineering, Science, Humanities and Social Sciences, Fine Arts, Public Policy and Business. Highly ranked undergraduate institution (#22), ug business #9, ug engineering #7. Top ranked graduate programs, e.g. computer science (#1), engineering (#6), arts (#7), drama (#1), business (#15), and public affairs (#10). Less strong in science and humanities ( #30 40). Interdisciplinary, problem solving, and global campuses in Qatar and Silicon Valley and programs in Portugal, and Asia.

4 Transitioning to an Environmentally Sustainable Society Transforming Science and Society by Advancing Information, Computation, and Communication Foundational Research, Artistic Creation, & Creative Inquiry Improving Human Health and the Quality of Life Understanding Social and Human Behavior Understanding and Engaging Global Societies, Economies and Cultures Research Strategic Plan 4

5 The CMU Environment Culture of Innovation Focus on entrepreneurship across campus Blending/ elimination of traditional academic silos in favor of the creation of disruptive new fields of study Strategic building of areas where we can compete: robotics materials chemistry social and decision sciences brain and cognition science computational biology, finance, and thinking machine learning energy systems

6 Bottom Line Impact Fifteen Nobel Laureates, five Oscar winners, 10 Emmy winners, five Tony winners. 20 university based start ups per year creating over new jobs per year. Over $2B in capital attracted to the region. Over 200 Carnegie Mellon related companies employing 9,000 in the region 10 major community initiatives per year 85,000 community outreach hours. $10M/year in licensing income to the university Companies attracted to Pittsburgh include Google, Apple, Intel, Disney, Rand, and Caterpillar.

7 Top University Research Helps to Build a New Economy

8 Research Support Has Doubled in 10 Years $ $ $ $ $ $ $ $ $

9 The New Economy Pyramid as per Professor Don Smith, Carnegie Mellon University 1. Skilled Labor scientists, engineers, experienced entrepreneurial management 2. Technology R&D University R&D, Corporate R&D 3. Specialized Infrastructure Clusters, Labs, Tech Parks space 4. Risk Capital Pre Commercialization, Pre Seed and Seed Capital 5. Technology transfer University Industry Centers; Fair, fast and transparent tech transfer policies

10 Open Field Entrepreneurs Fund NSF ERC Qolt Foundry Revolving Fund-Carnegie Fund 10

11 Technology Transfer Model Transfer of innovation outside the university Satisfaction of Faculty Support of Innovation/ Entrepreneurship Mission/ Position of university Economic development of region Financial Incentives for Faculty and Departments and the Central Administration

12 Center for Technology Transfer and Enterprise Creation (CTTEC) Facilitate and accelerate the transfer of intellectual assets (in particular, those owned by the university) to the commercial marketplace. Negotiate and execute commercial agreements. Encourage faculty (and student) entrepreneurship and the creation of start-up companies.

13 Don Jones Center for Entrepreneurship Part of Tepper School of Business Provides education and training in: - Writing business plans - Securing financing - Devising winning market strategies for winning start-up firms 10 percent of CMU undergraduates involved in Center programs or classes yearly International Business Plan competition Cross-campus collaborative with other departments for business ideas

14 Project Olympus Based in School of Computer Science, lead by Lenore Blum, SCS Professor run by faculty for faculty and students. Assists student and faculty in exploring commercial potential of research by providing: - Mentoring - Micro grants - Start-up advice - Incubator space - Helps make connections with investors

15 Research, Technology & Commercialization Committee (RTCC) Subcommittee of the university s Board of Trustees Comprised of men and women who understand the technology commercialization process Provide sounding board for new ideas to the VP of Research on proposed policies and market trends Informs Board of Trustees on progress, issues and needs in area of commercialization, research, and technology

16 Team Tartan Connection Enlists investors and business leaders from university s alumni and friends to provide advice and counsel to early stage enterprises Mentors meet with faculty members to help move promising projects forward

17 Entrepreneur in Residence Invite an entrepreneur with experience in relevant business sector to join research team full time Works side-by-side on projects to promote those with great market potential Model has been very successful at the Quality of Life Technology Center

18 Spin Outs

19 Create a Favorable Spin Out Policy 5% Go in Peace An International Model The university receives 5% in equity in a spinout where CMU technology is licensed and then the founder can Go In Peace Equity has an anti dilution feature until a $2M in raise or revenue. Additional 1% for incubation rights/year; 1% for legal assistance, 1% for patent payment deferral, etc.

20 Number of Spin Outs Per Year = Spin-Out without licensed technology = Spin-Out WITH licensed technology

21 Enterprise Creation Research Rank 2007 Start up Rank 2007 Institution Total Research Expenditures ( ) Start ups ( ) Research $/ Start up ( ) Carnegie Mellon Univ. $ 699,712, $ 24,989, California Inst. of Technology $1,262,279, $32,366, Massachusetts Inst. of Technology (MIT) $3,562,600, $53,173, Georgia Inst. of Technology $1,377,743, $52,990, Stanford Univ. $2,078,133, $76,967, Univ. of Pittsburgh $1,824,279, $86,870, Univ. of Pennsylvania $1,971,007, $131,400, Penn State Univ. $1,959,676, $195,967,600

22 Carnegie Mellon: Ranks #1 among peer research universities in the number of startups on a per federal dollar invested basis, we are the most efficient Ranks #1 among U.S. universities without medical schools in the number of start up companies created

23 Licensing

24 National Metrics Only 1 in 4600 licenses a Big Winner 1 in 8 generates more than $100,000 in revenues 50% produce less than $10,000 It is difficult to make money on only licensing intellectual property generated at the university

25 Now $10M

26 Company Attraction

27 Collaborative Innovation Center

28 Collaborative Innovation Center Partnership between Carnegie Mellon, Local Economic Development Organizations, and the State Funded with $8 million in Commonwealth of Pennsylvania Support tax bearing and operated by the private sector. $29 million total cost 127,000 Square Feet on 5 levels 200 car parking garage Opened May 2005

29 Major Attraction of New Companies

30 Attraction Pathways Google Pittsburgh Faculty Member Recruited to Lead Engineering Operation Apple Engineering Pittsburgh Apple Purchase of CMU Start-Up Intel Lab Pittsburgh One of 4 Worldwide Steps Taken to Decentralize Engineering Close Linkages to Machine Learning and Other Research Groups Extensive Graduate Hiring Interaction with CMU Faculty and Start-Ups Jobs Extended Visit to CMU 1980 s Identification of Lead Faculty Member and Team Extensive Graduate Hiring and Faculty Interaction Corporate Commitment to Create Open Model Labs

31 How We Arrived at this Point Shared perception that the new economy changed the game Talent, Technology play central role Universities emerge as anchors for transformation Sharper focus on interdependence between universities and their regions A stronger region aids faculty and student recruitment Local company partners improve the research and education quality New Generation of University and State leaders

32 Thank You