Gap Article: University Gap Funding: Mind the Gap
University Gap Funding: Mind the Gap
Effortlessly eyes on the economy, policymakers are quick to invoke the buzzwords during the day, like �innovation�, �economic development�, and �job creation�, to explain the beneficial impact of commercializing early stage technology, often from research universities. Recently though, it would appear that special interests, without any workable solutions, are grabbing headlines and helping craft policy depending on the suggestion that research universities are performing little to guide this chance.
When you have accepted this info as fact, you would understandably think it has neglected its duty, has failed, and is also will need a revolutionary fix; however, with minimal investigation, you will find that universities have lead inside the continuing development of tactics and programs that address critical barriers to early stage commercialization, often in advance of other private and public entities.
The type of example, is their development of gap funding programs to cope with the funding shortage that exists for early-stage technologies and start-ups.
So what exactly is gap funding? How does gap funding correspond with other designs of innovation capital? And what is the impact of gap funding (why wouldn't you care)?
What's Gap Funding (A much better Definition)?
The �gap� in gap funding refers to an enormous shortage in capital and also other commercialization support to transition early-stage technology for the marketplace. To address this need, many research universities either directly manage or partner with government agencies, early on investors, or corporations to make translational research, proof concept, and pre/seed-stage gap funds that assist in evaluating, de-risking, or commercializing technologies and start-ups.
Defining this �gap� too broadly (e.g. �Valley of Death� or �between investigation and also the market�) oversimplifies the complexities with the situation and clouds the road to resolution. Frankly, it can be reasons why this kind of funding is less covered in mainstream press, much less understood through the public. To alleviate this tension, I propose and may demonstrate a much more actionable, segmented system depending on fund observations.
Translational Research gap funds enter after traditional sources of investment in research cease, and secure the promising projects that want additional applied development. The greatest goal is to find we now have to a point where it could be assessed for commercial potential, or aligned with the priorities of your external partner prepared to develop the technology further
Proof of Concept
Proof of Concept (POC) gap funds evaluate commercial potential, demonstrate the need for the technology, and generally de-risk it (or thought of risk) for commercial partners or investors. By developing the commercial groundwork, including prototypes, IP/competitive landscaping, and application evaluation, these funds try and identify and secure a option to commercialization (license to existing company or spin-out). POC gap funds also behave as a procedure filter by identifying weakness within the technology for further development, or by deciding not to pursue the technology which saves often larger resource requirements later in the operation (a common recommendation in most awesome development literature). From my research, this is the most widely-utilized, and necessary gap fund type
This emerging gap fund type assists in earlier formational steps of the latest company creation - often just before it learning to be a legal entity. Business Formation funds is visible like a start-up-focused extension of proof concept funding (post route-to-market decision) that develops the company use of we now have through general market trends, product development, business development, management, space, and equipment
As scalability and growth become major objectives, some investigation universities are coming up with, spun out, or partnered with seed funds and accelerators, both public (government) and (corporations, investors), to fill a void at the begining of stage capital. The principle goal of Business Growth funds is to scale a beautiful business that can cause jobs, produces a risk-worthy return on your investment, and attracts capital by leveraging other external investors
To conclude, adopting this segmented way of gap funding produces a model that's actionable, relatable, and customizable because it:
Aligns with popular technology developing the site processes
Allows for anyone approach that is in line with the specific resource needs and existing culture from the funding institution
Creates a system that's identifiable by stakeholders of early-stage innovation (private and non-private), and gives them a way to identify their role as being a partner in the operation
How can gap funding connect with other designs of innovation capital?
The normal model of early on technology and start-up funding - prevalent running a business books and policy reports - depicts government-funded research magically transitioning to application by way of a license to a existing company or start-up. The start-ups are then supported in their early development by government grants for women, bootstrapping, via angel or investment capital investment since they work at profit, growth and liquidity.
This view is neat and places and emphasis on more common varieties of early stage capital; however, additionally it is misleading and shifts the main focus downstream. It ignores a major part of the realities of early on technology development-especially those which are realized by those associated with commercializing university research (longer to-market timelines, resource intensive).
In this view, gap funding as well as other emerging and disruptive sources of early stage capital are often overlooked and under resourced because they're literally not even inside the picture; therefore, I produce an updated version from the early on funding landscape-one that positions gap funding and also includes the actual status of other forms of traditional, emerging, and disruptive options for initial phase capital and support
Each of these reasons for early stage capital are essential to transitioning university and other early-stage technology towards the marketplace; but, there are many inherent conflicts that inhibit their ability to provide reliable and well-positioned assistance during the early stages of technology and start-up development. Some weaknesses include:
Aversion or inability to fund translational research, proof concept, and other first stages of start-up development
Structured to generate larger investments in fewer deals
Focus on investment sectors that will not address technology with longer development timelines, resource intensity, and IP/regulatory hurdles
Motivations (incentives towards near term returns) and constraints which could limit their ability to accept potential risk of initial phase innovation
A great strategy to address this capital shortage is to the) attract retreating forms of initial phase capital and commercial partners into the �gap�, or b) invest right into models that be more effective positioned to invest in the �gap�. The most effective technique is to support a solution, like gap funding, that accomplishes both.
Research universities and partners have created gap funding as a capital and innovation support mechanism that is ideally positioned to deal with the critical aspects of transitioning university technology and start-ups, while also attracting additional capital and third-party interest.
As it might not yet hold the prestige of other designs of early stage capital, gap funding is appearing to be a disruptive approach that is better aligned with and it has the power to support technology and start-up boost earlier stages through:
Focus on translational research, proof concept, and start-up development
Targeted smaller grants and investments per project, which allow to technology or start-up to be more adaptive to development �pivots�
Directed to advance university projects, often in lots of technology areas with varying to-market requirements
Positioned in a nexus of faculty, students, and business networks
Mission-driven to innovate, educate, and job create