D2P Shifts Focus, as Fund for Investing in UW Entrepreneurs Dries Up
[Updated 12/15/17 2:51 p.m. See below.] Since its launch four years ago, a University of Wisconsin-Madison program has been working with students, faculty, and staff at the school to turn their ideas into startup companies.
But now the program, known as Discovery to Product (D2P) has nearly exhausted the $2.4 million “Igniter” fund D2P has used to invest in entrepreneurs in recent years, said interim director Andy Richards. He said there’s some “concern” that fewer people will come to D2P for help advancing their ideas because, at least for now, they won’t be able to get funding from the organization. However, Richards said, D2P will continue to provide entrepreneurs hands-on support, while also focusing on coordinating entrepreneurship-related activities across the university. [This paragraph has been updated to more accurately describe how D2P will work with entrepreneurs in 2018 and future years.]
“The Igniter funds are going away,” but D2P is not, Richards said Tuesday during a presentation at the Wisconsin Institutes for Discovery. D2P will continue to function as a “portal, the starting place for campus entrepreneurs,” he said, and will now seek to do more to “help facilitate the coordination of resources and planning with [those] resources in our community and on campus.”
D2P plans to accomplish this in part through a new coordinating council, which will meet for the first time on Friday, Richards said. Numerous groups at UW-Madison, as well as ones affiliated with the school, will be represented on the council, he said. They include the Wisconsin Alumni Research Foundation (WARF), an independent organization that manages patents and licensing of intellectual property for the university; the UW Foundation; UW-Madison’s Office of Corporate Relations; and its business, engineering, and medical schools.
D2P was created in late 2013, with commitments from UW-Madison and WARF to each provide $1.6 million over a three-year period. Not long after, the school brought on John Biondi to run the program. He left D2P in August, which led to UW-Madison putting Richards in charge of the program on an interim basis.
(The combined $3.2 million from the university and WARF is meant to fund D2P’s operations—things like staff salaries and overhead costs—and not for funding entrepreneurs.)
The program then received $2.4 million from the University of Wisconsin System—a statewide organization which has functions that include awarding gifts and grants to UW campuses—to create the Igniter fund.
D2P staff have used the Igniter money to lead groups of UW-Madison entrepreneurs selected for the program through an intensive five-week regimen aimed at evaluating the potential market for a new product idea, developing prototypes, and other tasks. These ideas, which D2P calls “projects,” are not eligible for Igniter funding if the entrepreneur or team behind them has already formed a business entity to commercialize the product.
Richards said that from 2014 to 2017, D2P has helped entrepreneurs evaluate about 60 projects, 17 of which turned into startups. They include Stem Pharm, Xemex, and Spectrom, which New York-based MakerBot acquired for an undisclosed sum in 2015.
D2P plans to spend what’s left of the Igniter fund by June 2018, when the current fiscal year ends, Richards said.
“We are looking at … continuing to provide the Igniter program, but don’t have resources to actually fund the prototyping and market research at this time,” Richards said. The work the Igniter fund helped support can be key for startups seeking to position themselves to raise venture capital and other forms of outside investment, he added.
In an interview, Richards said he was not sure what D2P’s total operating costs have been over the program’s life span. But he said the total is less than the $3.2 million UW-Madison and WARF committed to launch D2P in 2013.
Richards said being able to secure enough money to finance D2P’s operations in 2018 and future years is something he’s “not really worried about” at the moment. WARF, which recently announced plans to invest $60 million in startups affiliated with UW-Madison by 2025, continues to be a key backer of D2P, Richards said.
UW-Madison is known as a research powerhouse, particularly in the life sciences and engineering. According to the National Science Foundation, the school had the sixth-highest research and development expenditures among U.S. universities in 2016.
Some of the schools that UW-Madison trails in the NSF ranking are investing significantly in startups and new technology development. In 2015, top-ranked Johns Hopkins University said it planned to invest $40 million over five years in innovation … Next Page »