Boston’s New Generation of University Spinoffs
You can’t spend much time in Kendall Square without realizing how critical universities are to the local innovation ecosystem. One way to look at the role they play is to look at the startup companies formed around technology invented in academia. That’s exactly what I’m about to do—and if you want to cut to the chase you can click here—but first, a conundrum:
In the course of helping Bob get this company off the ground, I’ve had to dig up answers to innumerable startup-related questions that previously I wouldn’t even have thought to ask. Does the term sheet include a double or single trigger for acceleration? Where does one send an 83(b) election if one normally files taxes electronically? If the office lease specifies that tenants have to arrange nightly cleaning, does that literally mean somebody has to clean the place every night?
So far I’ve managed to come up with reasonable-seeming answers for each of these queries as they’ve arisen. But this week I ran into one that has me stumped: When is a startup founded? Where along the timeline of kicking around ideas, writing up plans, pitching them, filing patents, hiring consultants, writing new plans to replace the ones shot down in the first pitch meetings, squeezing cash and free labor out of friends and family, hiring lawyers, filing trademarks, reserving domain names, cold calling investors, filing incorporation papers, looking for office space, alpha testing a product, printing stationery, closing a financing deal, dealing with the broken toilet in the new office, and actually putting a product in the hands of customers—where along that timeline do you put the arrow that says “Company Founded?”
Turns out, folks at different companies and in different universities’ tech licensing offices have wildly different answers to that question. And that complicated things tremendously when we asked five schools—MIT, Harvard, Boston University, Tufts, and UMass—to tell us about the new companies founded around their intstitutions’ technology since the beginning of 2006. Typically, I’m finding out, universities peg the founding of a spinoff to the date when the company licensed the school’s patents. Individual companies might use that date, or they might use the date of their incorporation, the date of their initial funding, or some other milestone. (The strange thing about the licensing approach is some companies wind up being incorporated years before they’re “founded.”)
Thinking back, it’s surprisingly hard to pinpoint a single moment when Xconomy went from being an idea/project/pipe dream to being a real company. The closest I can come is May 8, 2007–the day we incorporated in Delaware. And so in whittling down contenders for our list of recent university spinoffs, I limited myself to only those with incorporation or formation dates in 2006 or 2007. That meant I had to drop some really interesting companies (MIT spinoff Tempo Pharmaceuticals, for instance, was incorporated on November 28, 2005), but at least it levels the playing field. And to be clear, this is not meant to be exhaustive; many spinoffs this young are still so stealth that they haven’t yet authorized their parent institutions to talk about them. But even with those limitations, I think the list–found here–provides a nice snapshot of the latest wave of technologies flowing out of university labs and into the marketplace.