The McCrory administration put together an all-star list of leaders in venture funding, technology and university R&D to form its “Moving Forward on the Innovation Triangle” plan. And the proposal outlined by Gov. Pat McCrory on Friday shows considerable promise, obviously reflecting the talent on the panel.
However, The Skinny suspects the plan would gather support more quickly if “Triangle” was changed to “North Carolina.”
The plan outlined Friday has statewide impact and appeal. Plenty of businesses and university professors outside RTP – “the rise of the rest” in N.C. includes plenty of potential stars in Wilmington, Charlotte, the Triad, Asheville, Greenville, Fayetteville and elsewhere – can benefit from this proposal.
Crowdfunding legislation has been stymied by in-fighting at the General Assembly. Whether this plan will get a better reception remains to be seen.
Here are the key points as described by WRAL’s Mark Binker:
- Investing $120 million in new venture capital companies. To get state funding, the companies would need to raise at least $2 of private capital for every $1 of state money invested. Those companies would then invest in innovations developed in North Carolina.
- Creating a $10 million per year program to help start-up companies make the transition from concept to a marketable product.
- Eliminating the state’s capital gains tax rate for “innovation-related companies.”
- Taking steps to lure North Carolina natives involved in innovation home to the state.
- Creating a crowd funding program as a way of generating more capital for start-up companies.
The money the tax change and the Triangle focus will generate the headlines – and the opposition (more “corporate handouts,” critics will cry; too much attention on Triangle, others will say).
But what strikes The Skinny is the emphasis on tech transfer which has state-wide potential. And this is reflected in the very structure of the panel. So let’s focus on this part of the plan. We’ll talk about the venture side in detail in a future column.
- Turning R&D to business development
As widely respected as our universities are and despite the continued growth of the Triangle as a tech hot spot, more can be done.
One of the big factors limiting technology growth in the Triangle (and elsewhere, we concede) is the problem of getting technology discovered and developed at universities transitioned to the private sector. Numerous RTP firms have turned university research into success as clearly demonstrated by one of the panel’s members: Dr. Joe DeSimone. His nanoparticle research is proving revolutionary from medicine to dry cleaning to 3D printing.
But there are other inventors and professors out there who either can’t find funding or lack the business acumen to create a startup.
There is funding requested (up to $10 million) and the expansion of an existing grant program that matches awards won from federal agencies and other sources.
Here’s the idea:
Developing and Positioning Pre-Commercial Innovations for the Market
1. University Innovation Commercialization Council
- Defines best practices for innovation commercialization at NC universities, promotes inter-university cooperation and standardization where possible, and catalyzes transformation in culture to encourage technology commercialization
- No new funding needed
- Expenses minimal and absorbed by participants
2. University Innovation Commercialization Grant Program
- Provides funding and process for technology proof of concept, validation, commercialization, translation, etc., for technologies developed by NC universities and research not-for-profits
- $10MM annually, phased in over four years
- Expanded state appropriations
3. Small Business Innovation Commercialization Grant Program
- Re-names the existing “One NC Small Business Program” the “Small Business Innovation Research Matching Grant Program” and appropriates sufficient funding to support eligible applicants at 100 percent of statutory maximum
- Recurring $5MM annually, ongoing as needed.
- Currently $2.5MM; was $5MM in FY 2007
- Expanded state appropriation
Given the people on the panel, these ideas have most likely been vetted inside and out, top to bottom. Here are some of the members:
- Clay Thorp (Co-Chair), General Partner, Hatteras Venture Partners
- John Cambier, Founding Managing Partner, IDEA Fund Partners
- Joseph DeSimone, Chancellor’s Eminent Professor of Chemistry, UNC-Chapel Hill
- Igor Jablokov, Entrepreneur in Residence, Blackstone Entrepreneurs Network
- Karen LeVert, CEO and Co-Founder, Southeast TechInventures, Inc. (tech transfer focus)
- Terri Lomax, Vice Chancellor for Research, Innovation & Econ. Dev., NC State University (She’s moving to RTI International)
- Laura A. Schoppe, President, Fuentek (Tech transfer focus)
- Mitch Mumma, General Partner, Intersouth Partners
- Steve Nelson. Co-Founder, EiPi Systems (former venture capitalist)
- Eric Toone, Vice Provost & Director, Innovation & Entrepreneurship, Duke University
- Carlos Parajon, Co-Founder, Harbor Island Equity Partners
That’s an impressive group. DeSimone and Jablokov are successful entrepreneurs. LeVert and Schoppe make their living finding ways to evolve R&D into business. Lomxa has a strong record of achievement at NCSU. Thorp, Cambier and Mumma know VC inside-out.
If this plan can unravel the Gordian Knot that is tech transfer, the Triangle and the entire state will continue to grow as a hub of innovation.