May 2004, Issue 2

Tufts Technology Startups

Every startup company has a unique story about how it came to be. One may have had an element of serendipity in its origins, while another may have come from a researcher's dogged persistence. However they come about, Tufts startups pass through similar steps. The first two are the same for all new technologies, whether they go on to support a startup company or not.

Step 1: Creating something new — such as an invention, technical data, or a copyrightable work - and realizing that you've made a discovery.

Step 2: Filing an Invention Disclosure Form with the Office for Technology Licensing and Industry Collaboration (OTL&IC). This legal document states the facts of the discovery, such as who the inventors may be, when the invention occurred, whether the research that led to the invention was supported by the federal government or by third parties, if and when the invention was reduced to practice, and any parties to whom it was disclosed. The OTL&IC works with inventors to protect (through patenting or other means), market, and commercialize discoveries.

Although most new technologies are licensed to established companies, some are broad enough to warrant starting a new company. Startups spring from a platform technology, one from which other new products can be launched. A technology for launching a startup must have a large potential market and be attractive to research funders. It must also provide more than an incremental advantage over existing technology. Sometimes the inventor realizes the potential of the discovery and asks the OTL&IC for advice on how to go about starting a company. Sometimes the OTL&IC will bring up the possibility of a startup to the inventor at the time the invention disclosure form is filed. In either case, the OTL&IC will work with the inventor to get the company off the ground. Since 1997, Tufts has launched ten startups.

Step 3: Identifying a market for the technology, formulating a business strategy, and determining how to implement the strategy. Understanding markets and market sizes requires research on industry reports and the financial statements of existing companies. At this point, the scientist entrepreneur often seeks the advice of a business professional.

Step 4: Raising seed money and obtaining an option or license to the technology from Tufts. Although Tufts does not fund startups directly, the OTL&IC can help by putting the scientist entrepreneur in touch with potential investors (seed-stage (angel) investors, for example, or venture capitalists). The OTL&IC can also assist startup companies in securing federal research grants and small business grants and loans. A startup will need to negotiate a license with Tufts because Tufts owns the rights to inventions discovered by University personnel. Before Tufts will option or license it a technology, the startup also needs to demonstrate its viability by having a sound business plan and success at raising funds.

For a sense of the passage from invention to startup, see the stories of three companies recently founded on Tufts technologies - Tissue Regeneration, Inc. (TRI), Evolved Nanomaterial Sciences (ENS), and CogniScent.

 

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