PROOF OF CONCEPT
PRACTICE STATEMENT
TECH LAUNCH ARIZONA
JUNE 2013
Contact
Sherry Hoskinson, Director
Commercialization Networks & Operations
(520) 626-2451
[email protected]
I. PURPOSE OF THIS PRACTICE STATEMENT
The University of Arizona is changing its approach to technology commercialization and related
activities with the intention of increasing the potential social and economic outcomes of its extensive
research enterprise. Tech Launch Arizona (TLA) was initiated in September 2012 to deliver on the University’s new vision for technology commercialization. In this role, TLA has developed a comprehensive roadmap,
including the identification of processes, procedures, and resource reallocations that can better enable commercialization of University intellectual property (IP).
This procedure document focuses on one important component of technology commercialization at the
UA: The TLA Proof of Concept Program. The purpose of the Proof of Concept program (also known as POC
or “gap funding”) is to provide funding to address technological and commercial hurdles of promising inventions, and move those inventions closer to commercialization. This document provides a description of
purpose of the TLA POC Program and the program’s associated procedures.
II. NATURE OF THE PROBLEM
Novel university developed technologies are inherently very early stage; often too early stage for
external investment, yet beyond funding eligibility for general lab research. As such, investigators find themselves in a gap between the current state of technology development and commercialization requirements.
Due to this gap, investigators must often must set aside the promising technology and shift their research
focus to fundable topics. As a result potentially high-impact technologies that are too nascent for external
funding are left undeveloped. This problem is heightened by reductions in government-funded research and
increased competition for research dollars in general. In today’s environment, many funders – governmental
and private – attach commercial relevance to funded research.
III. UA PREVIOUS APPROACH
As a comprehensive university with a robust research enterprise, the UA has experienced highly successful research activity. Until recently the UA did not need to focus on, or dedicate significant resources
toward, the start-up potential of technology inventions to enhance its research base, to attract and retain
top research talent, or to win major grants and awards. While in some cases, institutes and colleges may have
directed or raised funds on an ad hoc basis, in today’s resource constrained environment, there have not
been any formal or informal proof-of-concept or other dedicated gap funding programs. The primary University focus in this area has been to facilitate SBIR/STTR partnerships that, if funded, would dedicate funds
to this gap. Separate from this, UA faculty have often made personal investments in their technology or have
been required to seek this type of prototype development money privately.
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IV. ALTERNATIVE AND PROGRESSIVE PRACTICES
It is increasingly important for universities to respond to changing conditions with a culture of innovation. Universities are partnering with funders or developing gap-funding programs as an extension of tech
commercialization efforts. On a broader scale, Proof of Concept programs have been operating for over a
decade, attracting research universities, national laboratories, state and government programs and corporate
technology and acquisition units. These programs commonly fund translational research that needs early
stage funding to further assess commercialization potential and develop the technology for commercialization. Fund recipients, whether selected through a competitive or discretionary system, are generally based
on scientific merit and market potential. POC awards are generally in the tens of thousands of dollars per
project, with funds used for development of the technology as well as a commercialization strategy. These
programs combine talent and capital to progress innovation. The combination of institutionally organized
capital and talent is evidence of new culture – driven by significant social and economic changes. POC processes also help universities to better understand their technology portfolios and replicate roadmap-type
strategic planning.
POC is among the most widely utilized university gap fund type. Common goals of POC programs are:
evaluate commercial potential; demonstrate value of technology; address perception of risk; and filter by
identifying weakness in technology (opt out of development). Key outcomes of these programs include (data
provided by Innovosource):
High commercialization rates: over 75% of funded projects, on average;
Attraction of early stage capital;
Business formation and job creation;
Building a community of innovation;
Organizational returns: licensing proceeds returned to the universities through royalties and equity
sales;
Maximize resource and downstream savings by vetting and identifying techs with limited or no
commercial potential;
Building “frameworks” of the opportunities that are attractive to investment priorities;
Evaluation of technology;
Demonstration of technology value;
Address risk perceived by potential licensees or investors;
V. TECH LAUNCH ARIZONA BEST PRACTICE
TLA prioritizes the Proof of Concept program as a means to move promising technologies to the market and
thus better serve faculty and our community. TLA POC awards may be made on a competitive or discretionary basis. In the case of a competitive call for proposals, such as was done in the fall of 2012, clear and
accessible criteria will be published.
TLA provides POC awards to faculty working through the primary case manager and other TLA personnel. Frequently, external domain expert input will be sought to inform a POC decision. TLA will organize this
domain expertise in partnership with the investigator. Given the discretionary nature, POC funds can be
available when the time is right for the technology.
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Preliminary criteria
1. Primary investigator is a full time UA researcher (faculty or project investigator).
2. Invention disclosure has been filed with TLA.
3. Technology is not licensed or optioned.
4. If the technology is jointly owned, there is an agreement in place with UA designated as lead.
5. POC funding is the best qualified funding source (as opposed to funding sources intended for basic
research, bridge funding or general lab support).
POC assessment criteria
1. Technology Opportunity: The market opportunity for the technology is clear and well defined.
2. Research plan: The research plan is well defined and contains a series of discrete and logical milestones
that will allow the investigator to achieve the overall project goal and advance the invention toward a
marketable project. The commercial and technical problem(s) being addressed are clear and appropriately considered in the design of the proposed activity. The activity described in the proposal answers
critical questions about the commercial viability of the invention. The activity described in the proposal
reduces technical and/or market risk. Activity described in the proposal can be completed in the funding
period.
3. Project team: The proposal includes an appropriate team, including UA personnel and any outside collaborators necessary to fulfill the project goals.
4. Intellectual property: Prior art in the IP space and how the project IP will cover the envisioned end product are clear. Ownership of invention by UA/ABOR is understood and described.
5. Market assessment: Therea reasonable understanding and description of the market where the envisioned product will compete, including the specific unmet need the technology addresses. This is
accompanied by an articulation of competitive advantages of the envisioned end product over current
competing solutions. The proposed activity must be clearly tied to identified market drivers.
6. Project impact: There isevidence of a commercial significance and compelling description of the impact
of the POC funding on the proposed project and the necessary steps to continue commercial advancement of the technology following POC completion.
7. Expense plan: Expenses are realistic to the scope of work and the proposed timeline.
POC award management
When a POC award is made, the reporting schedule is developed based on the research and expense plans
and is agreed upon by the investigator and TLA. Funds will be placed in a UA FRS account for use by the
investigator with additional approval by TLA business manager. Funds must be expended within the fiscal
year agreed or alternate plan needs to be submitted and agreed on by TLA at least 60 days prior to the initial project term end. If funds are not expended and an alternate plan is not in place, funds will be recalled by
TLA and reallocated.
Post award assessment and ongoing technology development
Following the conclusion of the POC work, a 60-90 minute project presentation will be scheduled by TLA.
The purpose of this presentation is to expose the technology to informed and interested people; generate
discussion; generate interest; and make connections. The presentation will be attended by domain experts,
investors, TLA personnel, and team members associated with the technology. TLA will continue to work
with the investigator and team members to advance the technology to license or start up.
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