Banff Venture Forum

Last week, I had a chance to attend the Banff Venture Forum in Banff, Alberta.  This conference gives young technology companies the opportunity to present to early-stage investors.  The conference was well attended by Angel investor groups, university commercialization groups, as well as venture capital firms.  I also sat on a panel presentation which discussed commercialization strategies for innovations coming out of university labs.  Many feel that there is not enough early-stage private funding in the market to support the commercialization of university research.  Very often, universities spend significant provincial and federal government grants on years worth of research to develop new technologies.  This research is funded based on its academic merit as determined by the University and government professionals.    As this research "graduates" from the university lab and begins its search for outside investment, it far too frequently fails to gain private investor support.  Some investors complain that the innovations are too niche focused, while others argue that they see little market value or customer demand for the proposed solutions.  Regardless of the issue, the fact remains that universities are struggling with the commercialization process.

Rather than starting more government programs or funding more reports to assess this issue, perhaps we need a radical new way to jump start this commercialization process.  My suggestion would be to have universities partner with private investors much earlier in their process to determine which research to fund.  Venture investors have a strong understanding about industry dynamics and market needs.  They also have the ability to support emerging technologies with their venture dollars.  Why not partner these investors with the university groups to priortize university research focus?  Wouldn't it be better to understand which research is most relevant to market needs and which innovations will best be able to get external financing support? Perhaps government research dollars could be spent answering the investor's questions and concerns regarding commercialization viability? It seems to me that this would be a much more market-focused approach to funding technology research.  This way, Investors would also get a first chance to fund new and exciting innovations. By involving more partners and priortitizing their research dollars, perhaps universities can help build greater momentum for their innovations.        

Comments

[John Arnott]

Salim,
I realize that this is not timely but it might be useful.
I have designed over 150 products, have started 7 companies, and was resident at the excelerator at UofT for a few years. I also had a relationship with Computer Science for many years.

As I am sure you are aware, universities have very different attitudes toward the commercialisation of science & technology. UofT is very possessive, Waterloo, Stanford, MIT, very encouraging.

It is argued by the academic communities that research should not be conducted with a view toward commercialisation; that research should be oriented toward 'platform' technologies and others focus on applications.

This is balanced by the fact that 90% of new technologies are commercialised in applications that were never imagined by the inventor.

Additionally, only 6% of new companies use a new technology, another 6% use some technology. Fully 88% of new businesses use no new technology.
Canada starts 140,000 new businesses a year, and closes 130,000 for a net 10,000 so 1200 will utilize new technology. (OECD & STATS CAN) Of these only 10% will last 5 years employing an average of 16 people or about 2000.

A significant question should be whether all our investments in Research are worth it. Or, in my opinion, how can we affect the success rate to improve the returns on investments. I have also advocated the loosening of funds for Development. The science and engineering communities have a vested interest in containing R&D investments for themselves and yet 88% of new co's don't use it.
Surely if many start-ups had access to funds comparable to NRC & IRAP, not linked to technology, they might be able to employ better strategic planning, market research, design, etc.

I believe that if many young ambitious start-ups had access to better business processes, the success rate would skyrocket.

John.