Entrepreneurship at ASU launches 55 companies, attracts $200M in financing
In the last decade, business startups launched by Arizona State University faculty have led to the formation of 55 companies, including 34 currently operating in Arizona, according to Arizona Technology Enterprises (AzTE), the intellectual property management arm of ASU. Additionally, companies and sub-licensees created, based on ASU technologies, have attracted more than $200 million in financing during that time.
In fiscal year 2011, 227 patent applications were filed with AzTE and 30 technology licensing agreements, including exclusive licenses and options, were completed. ASU faculty members were issued 18 patents and launched 10 startup companies. In addition, faculty submitted 170 invention disclosures to AzTE – 88 in the life sciences and 82 in the physical sciences. These inventions will provide the technology inventory for the next generation of new deals or startups.
“For America to be successful, we must have an economy driven by discovery and new technology,” said ASU President Michael M. Crow. “We are taking the knowledge we produce at ASU and catalyzing it into the economy. We are successfully working in ways to reach out to companies, startups, the business community and others, and for a small amount of public investment, we are leveraging very large amounts of activity into stimulating and advancing local economic activity and new economic progress in Arizona.”
AzTE is a wholly-owned subsidiary of the ASU Foundation for A New American University and is contracted by ASU to manage its technology venturing and to work with university inventors and industry to transform scientific progress into products and services.
“These are impressive numbers that are reflective of the great success AzTE and ASU entrepreneurship are having in the marketplace,” said R.F. “Rick” Shangraw Jr., CEO of the ASU Foundation and a member of the AzTE board of directors. “The results indicate, taking into account the size of ASU’s research enterprise, that ASU is one of the best performing universities in the country.”
Shangraw points to the work being done at the ASU SkySong Innovation Center in Scottsdale. The center is designed to grow the economy by launching and accelerating new companies and promoting use-inspired research in collaboration with local communities, state government and business partners. Through university programs, such as the Edson Student Entrepreneurship Initiative and Venture Catalyst, AzTE and ASU support fledgling and drawing-board companies in a variety of ways, including entrepreneurial training and education, intellectual property advice and information, marketing assistance and services, accounting guidance, office space in the SkySong business incubator, research and development assistance in the areas of gap funding, and innovation grants and more.
Just two years ago, Arizona Gov. Jan Brewer awarded ASU a $1 million grant to establish Venture Catalyst at ASU, an entrepreneurial assistance initiative to help faculty, students and companies launch new startups or accelerate existing ventures. The grant has allowed Venture Catalyst to double the number of entrepreneurs ASU can serve, change the focus from large group training to one-on-one mentoring, and help create jobs in Arizona by more quickly bringing university research to market application.
Over the past year, Venture Catalyst has received 157 inquiries from potential startups, including 44 business ideas from ASU students enrolled in entrepreneurship programs at the university. Twenty-one of the inquiries came from international prospects.
“As new technologies are developed through ASU resources and transferred from the laboratory to the marketplace, jobs are created and economic development is enhanced to the benefit of the state and local community,” said Augustine Cheng, AzTE CEO and senior vice president and managing director for the ASU Foundation. “Students and faculty have the opportunity to work with university technologies in pursuit of their entrepreneurial dreams through an extensive suite of business support services provided by ASU Venture Catalyst.”
Venture Catalyst is the next step in ASU’s evolution of assisting high-potential startups to find critical resources needed to succeed. While other universities provide training to secure federal funding for early-stage technology ventures that are considered too high-risk for private support, Venture Catalyst adds to the opportunities by providing research, writing and submission support, and making critical connections to large corporate partners. Between fiscal years 2008–2010, ASU researchers and ASU-linked companies earned more than $7 million in Small Business Innovation Research and Small Business Technology Transfer funding. In the past year alone, Venture Catalyst has worked with 45 university-related startups, 12 national and local companies, and three international companies seeking a U.S. presence through Arizona. During the same time, Venture Catalyst companies have raised more than $1.7 million in capital.
“Academic research is crucial to economic prosperity and human progress,” said Sethuraman "Panch" Panchanathan, senior vice president, ASU Office of Knowledge Enterprise Development (OKED). “But ideas, products and processes created in university labs do not migrate automatically into practical applications. Through AzTE and Venture Catalyst, we are not only accelerating the journey of innovations from laboratory to the field, but also forming partnerships that open opportunities for Arizona locally, regionally and internationally."
Among startups supported by AzTE is Fluidic Energy, an ASU spin-out created to develop nano-scale materials for energy storage, a critical and worldwide economic need. The company, with a significant presence in Scottsdale, Ariz., was launched to commercialize technology developed by Cody Friesen, a professor in ASU’s Ira A. Fulton Schools of Engineering. Fluidic is addressing technological roadblocks to clean, cost-effective and sustainable energy storage with millions of dollars in government and private venture funding since 2006.
Another success powered by AzTE is TÜV Rheinland PTL, a startup company formed in 2008 through a unique joint venture between AzTE and TÜV Rheinland, a multinational service corporation. Located in Tempe, Ariz., TÜV Rheinland PTL has a state-of-the-art, 40,000-square foot facility where clients take advantage of full testing for all photovoltaic system components including modules, inverters, concentrating optics, controllers and tracking devices. With the majority of its employees coming through ASU, the company has become a local economic development success story.
“Our partnership with AzTE and ASU has evolved exactly as we hoped it would’, said Stephan Schmitt, chief international officer of TÜV Rheinland AG and a member of its executive board. “We’ve been able to establish a strong market position by leveraging ASU’s expertise in the field of photovoltaic testing, combined with TÜV Rheinland’s leadership as a provider of technical services worldwide. We look foward to many years of continued success in the AzTE-TÜV Rheinland joint venture.”
Also spun out by AzTE in 2008, Heliae Technology Holdings Inc. and its subsidiaries were founded to develop, innovate and integrate ASU technology solutions that enable society to harness the full value of algae. Heliae’s technology platform and precision-farming process afford its partners a turn-key solution to produce affordable, renewable materials from algae.
“Our relationship with ASU has been instrumental in realizing the successes that we’ve achieved since launch,” said Dan Simon, CEO of Heliae. “Through AzTE, ASU has been a critical partner as the company progressed from start-up to becoming a significant employer in Gilbert (Ariz.) with nearly 80 employees and over $50 million in private capital invested. We are currently actively searching for areas we can expand and deepen our relationship with ASU in pursuit of new strains, applications and/or technologies which improve our ability to drive profitable full scale algae production.”
“The biggest change made in the last few years is to treat the technology transfer operation as a service provider to faculty, not as a revenue generator,” said Shangraw. “It is our job to facilitate the process of getting technology out of our labs and into industry – with the cycle completing when those relationships help us bring industry research funding back into their labs.”
Shangraw also noted the importance of aligning the university's expectations with the unique needs of different industry sectors.
“One size does not fit all in the tech transfer business,” he said. “Different sectors have very different requirements, and we must respect these differences as we build our collaborations.”
Gordon McConnell, assistant vice president of innovation, entrepreneurship and venture acceleration for OKED and Venture Catalyst, has seen interest in entrepreneurship at ASU explode. The enthusiasm, he said, is a testament to ASU’s focus on a distributed model for entrepreneurship that features 12 “mini-centers” housed in disciplines across the university.
“Entrepreneurship is a key component of the New American University that ASU has pioneered,” said McConnell. “Our overall objective is to have a real impact on the local and state economy through job and wealth creation. We do that through our support of entrepreneurs and startup companies.”
Steve Des Georges
Senior Director, Editorial Services
ASU Foundation for A New American University
480-727-0757