A Secret Source of IP to Launch Your Startup

Launching a new company is risky and time-consuming. R&D for new products and technologies is difficult and costly, especially for a startup. Most fail within the first five years due to a lack of experience, capital, or a viable product or technology.

But there is a strategy for startups to cut out the risky and costly R&D and focus their resources on going to market. That source is Universities and Research labs, and they are a goldmine of market-ready IP.

One example is an Irish-based startup that licensed a composite bonding technology from a local university. The startup validated the IP and used licensing to get it into the market. It solved a big problem with weak bonding processes. They quickly lined up several big companies in industries such as aerospace, looking for more effective and lightweight bonding solutions for their products.

Other successful University IP startups include Gatorade, Netscape, and the Google search engine.

And your startup can do the same thing.

Universities worldwide develop intellectual properties as part of their undergraduate and graduate programs. They receive billions of dollars in research grants and other IP development projects from the government and private corporations each year. The result is universities around the country are sitting on enormous amounts of intellectual property.

By the way, in addition to Universities, research labs and even big corporations are sitting on billions of dollars of IP.

But Universities (and research labs) don’t commercialize their IP. They develop, patent, and in some cases, prove its commercial viability. And because they don’t commercialize it, most of their IP sits in their “IP vault.”

Universities often specialize in technologies such as engineering, agriculture, or chemicals. It’s not easy to find University IP. Generally, if they have IP available, it’s listed on their website and licensed through their technology transfer (aka licensing) office. Some provide information online. But for most, you’ll have to call them to find out what they have available for licensing. It’s worth researching because they’re a goldmine of IP.

Sometimes, you can license a university IP for no money upfront. Depending on the technology, the royalty rate will probably run five to ten percent on average.

Not only are these universities looking for startups, but they also offer some fantastic resources, including access to human resources in the form of graduate or undergraduate students. And, in some cases, you can even get office space at the University. Many also offer introductions to venture capital companies and local investors.

Why would they do all this? Because it benefits the University. The University is not primarily motivated by money. They are interested in the recognition and prestige of a successfully commercialized IP.

Most University licensing programs focus on startups and small companies. There’s a tremendous amount, so you have to do your homework. Some of the advantages of University IP include giving your startup instant credibility. Plus, you’ll get a lot of interest from funding sources because you’ve got a significant technology or product licensed from a university.

Universities also work with inventors and corporations to develop their intellectual property. If they accept your IP, its development becomes part of a course curriculum. It’s a great resource, especially if you don’t have the funding or workforce to do it yourself. The drawback is that it will take much longer to finish the research and development than doing it yourself because it’s only worked on when the students are in class.

When one of my clients tried getting a license from Columbia University, it didn’t work out because the IP wasn’t commercially viable. However, we did discover another opportunity. My client had developed a software program for the financial industry but didn’t have the money to finish development. She told them about her software and wound up dealing with the University to complete her software development. It will take about two to three years, and she has the right to license it once the University has finished the software development.

If you’re looking for a faster way to launch a startup, Universities and research labs are a secret source of market-ready IP to look into. Depending on the University, you could get the license for little or no money upfront. In many cases, the University will allow you to sub-license the IP as part of your go-to-market strategy. And you may also get resources, such as workspaces, labs, and even access to investor networks, to help your startup succeed in getting the IP into the market.

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