These U of M researchers and alumni are all business.
Whether it’s a rust-resistant stalk of wheat, the crunch of a Honeycrisp apple, or the lifesaving pulse of a battery-operated pacemaker, the University of Minnesota has long been at the forefront of inventions that save lives and change the world.
In an institution that receives over a billion dollars a year in competitively earned research funding, University scholars and alumni constantly push the boundaries of what’s possible. Helping those innovations make the move from classroom to commercial marketplace is the role of the Technology Commercialization office at the University, a unit of the Office of the Vice President for Research.
Known as “technology transfer,” this process helps inventors and entrepreneurs turn breakthroughs into startups, which also generates ongoing royalty payments for the University.
(See various sidebars on this page at right and below to find out more about how innovation benefits not just society, but the U of M, too; how alumni can help assist tech transfer efforts related to the University, and learn more about resources students can access to spur their entrepreneurial endeavors.)
Technology transfer got its start in the United States after the 1980 passage of the federal Bayh-Dole Act. That allowed universities, nonprofit research institutions, and small businesses to own, patent, and commercialize ideas and inventions that were developed using federal funding. (Before the act’s passage, the federal government owned the patents to anything that was invented using federal dollars.)
Since 2006, the U of M’s Technology Commercialization office and its Venture Center have facilitated the creation of more than 200 startups. Nearly 80 percent of those businesses are still active today; 10 companies have either been acquired or gone public since 2017. That’s an impressive track record, especially considering that up to 90 percent of American startups fail. In fact, a 2022 report from Heartland Forward, a nonpartisan think tank that promotes economic development in the 20 states in the geographic center of the U.S., says the U of M ranks first in technology transfer in the region and ranks fifth in technology transfer among all U.S. public universities.
“Our job is to work with the research community to identify what’s able to be commercialized, and then do the intellectual property [work],” says Rick Huebsch, executive director of the Technology Commercialization team. “We help file the patents. Then we do the marketing and business development to get these [inventions] out to the commercial world. ... We create a nest and then we kick them out of the nest when they’re [ready to be] out there on their own.”
In this issue, we look at five breakthrough businesses that owe their start to research at the University, and four more unique companies being propelled by alumni innovators. Click the stories below to read more.
BUILDING BUSINESS IS GOOD BUSINESS FOR UMN
Technology Commercialization is the largest single creator of startup companies in Minnesota. But it doesn’t just support University-related businesses. It also generates revenue for the University: $16.1 million in licensing and patent revenues in 2022 and $17.4 million in 2021.
That revenue gets distributed throughout the University community, including researchers, departments, and faculty. It also funds the office of Technology Commercialization. In FY 2022, investment in U of M startups was nearing $2 billion, up substantially ($650 million) since 2019. “Capitalism comes into play,” says Rick Huebsch, executive director of the University’s Technology Commercialization office, who says a central tenet of their work is that the inventors get a share of the profits. “But there has to be some financial incentive” for the University. And so, the incentive is [the inventors] let the universities elect title, and they allow the University to share the proceeds.”
THE U OF M's TOASTER LAB
Where do the inventors of tomorrow come from? Sometimes from the tinkerers of today.
Located in the basement of Walter Library, the Toaster Innovation Hub is a 6,500-square-foot innovation and maker space available to all U of M students. Set up to support entrepreneurship, it has study spaces, rooms for group meetings, and a makerspace equipped with craft kits, a sewing machine, a 3D printer, a button maker, and virtual reality headsets to enable students to do anything from build a prototype to map out a media strategy. The Toaster also offers resources for students who are interested in launching new products and hosts events and workshops. For more information, check out lib.umn.edu/spaces/toaster.
U of M, DEED partner on $34.5M Minnesota venture capital programs
In November 2022, the University announced a partnership with the state of Minnesota to inject $34.5 million into Minnesota’s early-stage, venture backed businesses. The University-operated programs focus in particular on investments in life sciences, agriculture/food tech, climate tech, advanced manufacturing, software, and technology.
In October 2022, University officials joined Governor Tim Walz and Minnesota Department of Employment and Economic Development (DEED) Commissioner Steve Grove to announce nearly $100 million in new funding to support small businesses through the federal American Rescue Plan Act. (The federal government has approved Minnesota for up to $97 million in small business financing support through the State Small Business Credit Initiative or SSBCI.)
The University partnered with the state to facilitate the programs because state law prohibits state government agencies from making fund-level commitments or direct equity investments, but the University is not bound by those restrictions. Businesses may access this support through the SSBCI Direct Investment and Multi-Fund Venture Capital Programs, which include investment opportunities with fund managers or businesses that are majority-owned by socially and economically disadvantaged individuals.
“This new infusion of capital will help our whole Minnesota startup ecosystem move many new early-stage ideas forward,” said Russ Straate, who leads the University’s Venture Center, part of the U of M’s Technology Commercialization efforts.
For more information, visit mnssbcivc.umn.edu.
ALUMNI: WANT TO HELP?
Alumni can play a role in U of M business formation
Rick Huebsch of the Technology Commercialization Office hopes alumni can play a role in supporting U of M business formation by volunteering with the Venture Center Business Advisory Group. The group is a broad, diverse network of entrepreneurs, business executives, investors, and subject matter experts who help vet new ideas and provide technical expertise to get projects up and running. Meetings are held four to five times a year.
“What drives us is having the impact,” Huebsch says. “Saving lives, curing climate problems, and then secondly, creating jobs."
If you're interested in participating, contact email@example.com with a link to your LinkedIn profile.