University of Illinois – Economic Impact
Entrepreneurship & University Spin-Offs
IEDC 2015 Economic Future Forum
June 8, 2015
University of Illinois Role in Entrepreneurship
Intellectual Property
Our leadership in research and
breakthrough inventions provides leading
intellectual property for new companies.
•
UI now ranks #11 in the World for
Universities Granting U.S. Patents
Student Entrepreneurship
Our students create new startup companies
and provide the critical workforce to fuel
new tech ventures in Illinois.
•
•
•
•
4,500 students annually participate in
entrepreneurships courses/experiences
100 student startup teams in the annual
UIUC Cozad competition
Summer fellowship program to fund startup
teams for 8 weeks
Concept2Venture competition at UIC, 10
years running, 45 teams annually
Entrepreneur Training
We train entrepreneurs: courses,
workshops, networking, and accelerators.
Early Stage Funding
We support early stage funding to
companies through:
•
•
Proof-of-concept funding programs that
helps to reduce the valley of death
between invention and startup formation,
$50-75K awards
Illinois Ventures seed funding and IETF
funds attract outside investors,
investments in 75 IL startups, ranked #1 in
the US for attraction of matching private
capital in gap funding program.
Coach and Consult
We coach entrepreneurs in the region
with our Entrepreneurs-in-Residence
program, free grant writing assistance,
and subsidized professional services.
Incubation
Our incubators in Champaign and Chicago
provide a location and programming to
support new ventures from our campuses
and communities.
1
University of Illinois at Urbana-Champaign
Tech Commercialization Pathway
Pre-startup Support
to Filter for
Commercial
Opportunity
Initial Company
Formation
Initial Funding for
Company to Begin
Team and Product
Development
Proof-of-Concept funding to
achieve technical
milestones, managed
through TTO
I-Start program supports
formation of the company
with professional services
Seed funding from
IllinoisVentures (small
round of $50-$250K to
launch company with
milestones)
Student business and
invention competitions
OTM begins licensing
negotiations for an option
or agreement
Small angel investments
through U-CAN, seed funds,
or corporate partners such
to make initial round of
funding
Entrepreneur-in-Residence
counseling and mentoring
through CIM and alumni
New entrepreneurs
participate in NSF I-Corps
Lean Startup Formation and
Business Model Canvas
Incubation at
EnterpriseWorks for office,
labs, shared equipment,
and support services
Entrepreneur Education:
FastTrac, Enterpreneurship
courses and workshops
Entrepreneur-in-Residence
counseling and SBIR
Technical Assistance
Program
Apply for SBIR and STTR
funding for early funding
Growth of Company
with Employees and
Funding
A Round of Funding from
Illinois Ventures IETF or
other local VC capital
Advantage Illinois matching
funding from the State for
$250K - $1 Million (no
longer available)
SBIR and STTR Phase II
Funding
Industry relationships, sales,
joint development
agreements, and
evaluation/feedback
Ongoing EIR assistance with
growth and mentoring
programs to build networks,
strategy, investor
introductions
Proof-of-Concept Funding
“de-risks” technologies, making them more attractive to investors
$500,000 I-POC Launched
$195,000 awarded Spring 2014
•
•
•
•
•
Kaustubh Bhalerao: soybean cyst nematode testing
Stephen Boppart: visualizing middle ear disease
Martin Burke: developing anti-fungal compounds
Andrew Singer: high speed underwater communication
Heinrich Taube: music education
5 projects
5 start-ups!
IllinoisVENTURES, L.L.C
Seed and early stage, research-based, investment
IllinoisVENTURES
IETF I Size
IETF II Size
Total Current Assets
$13 million
$27 million
$25 million
$63 million
Plus companies have
attracted more than
$600 million in outside
capital = 13:1 leverage
Stage
Seed & early-stage venture capital
Focus
Research-derived investment
Start companies around licensed IP, technical founders
Establish initial cap-structure, strategy, teams
Industries
Geography
Portfolio Investment
Parameters
IT, physical and life sciences, clean tech
Inter-domain “seams”
#1 regionally
IL and the Midwest
#19 nationally
<$1M initial investment, $2M-$4M total investment
Over $45 million invested in 75 companies
IV Portfolio has attracted over $600 million from
other sources
The UI Board of Trustees
created IllinoisVENTURES in
2002 to catalyze the creation
and development of researchderived companies
Technology Entrepreneurship Center
•
•
•
•
•
•
•
•
•
Created in 2000: Located in College of Engineering
Open to all of campus
4,500 students participate annually
SocialFuse matches student teams
Cozad New Venture Competition: 100 startups+ annually
Patent Clinic (with Law School)
Charm School
Invention to Venture
Entrepreneurship-related courses
6/15/2015
5
EnterpriseWorks Incubator
EnterpriseWorks (EW) is a 43,000 sq ft startup business incubator in the Research Park for early
stage tech firms. It is operated by the University of Illinois to launch successful startups.
Founders: Over half of our
current client companies
were founded by UIUC
faculty members. 93% of
our clients have founders
affiliated with the
university.
9%
7%
17%
65%
Faculty
UI Staff
UI Student
UI Alumni
External
2%
EnterpriseWorks Company Industry Sectors
20
Biotechnology
15
Clean Technology
10
Information Technology
Materials/Nanotech
5
Business/Consulting
0
Number of Current Firms
6
$823 Million in equity-based capital raised
by EnterpriseWorks incubated companies
Entrepreneurs-in-Residence
Number of EIR Consultations by Year:
Year
Number of EIR Consultations
2010
2011
2012
123
173
270 (86 distinct
2013
2014
companies/individuals)
436 (169 distinct
companies/individuals)
483 (280 distinct
companies/individuals)
Pre-Incubation Pipeline
• NSF I-Corps Lean Startup Training
51 teams since 2013
• I-Start professional services funding
42 startups selected, raised $16 million
• Cozad new venture competition for
student startups, 110 teams annually
• Tech transfer office (OTM) has 200
disclosures annually, key partner
Research Park SBIR/STTR Awards 2003-2014
Agency
DOD
EPA
NSF
HHS
NASA
DOE
ED
USDA
DOC
DHS
No. of Awards
91
7
54
25
17
12
3
5
3
2
219
Award Amount
$25,143,517.00
$929,653.00
$13,565,521.00
$11,716,518.00
$3,641,032.00
$3,853,904.75
$1,249,976.39
$1,850,000.00
$628,409.00
$344,477.00
$62,923,008.14
7
Location of Companies Post-Incubation
• Retention of companies in the state and local area is one of
our toughest challenges
– Biggest challenge: Lack of experienced startup management team
executives (previous venture capital experience/exits)
– Growth space at an affordable rate, lack of turnover of existing labs
• Proposed a new I-Grow support program following graduation
EnterpriseWorks Incubator
Graduating Company Location
UIUC Research Park
Champaign County (other location)
State of Illinois (other county)
Out of State
Out of USA
UIUC Research Park
5%
23%
27%
13%
32%
5%
23%
32%
Champaign County
(other location)
State of Illinois (other
county)
13%
27%
Out of State
Out of USA
8
Venture Capital Distribution
High-Tech Challengers to Silicon Valley
Richard Florida, Jul 02, 2013
Richard Florida is Co-founder and Editor at Large of
CityLab.com and Senior Editor at The Atlantic.
Brookings Institute in 2015, March 6, 2015
New names crack the top 20: Boulder; Ann Arbor,
Mich.; Champaign-Urbana, Ill
SBIR/STTR Midwest Distribution
Amount of SBIR/STTR Awards
2010-2014 by Zip Code
Each zip code with an SBIR/STTR award has a
dot—the dot gets larger as the award
amount for that zip code gets larger, and the
color gets darker as the award amount
increases.
Free SBIR/STTR consulting through
EnterpriseWorks.
Extended to other incubators in
Illinois, including: IIT UTP,
UofC CIE, SIU-C, SIU-E
EnterpriseWorks companies
received 21% of all IL awards in
2014 (in one building)
SBIR/STTR Awards at EnterpriseWorks
$72,553,365
Total SBIR/STTR grant funds awarded to EnterpriseWorks companies
$68,919,535
Total SBIR/STTR grant funds awarded to companies in UIRP
$53,576,337
Total SBIR/STTR grant funds won while companies were incubated
Designer-in-Residence
Dr. Deana McDonagh, Chair of the Industrial Design Program in the School of Art +
Design as a Designer-in-Residence.
She, along with her students, assist University of Illinois inventors and entrepreneurs to
incorporate product design in their technology development to help improve user
experiences and performance of products to meet customer needs.
12
Student Shared Services Program
• EnterpriseWorks student service team program
to help entrepreneurs in the Research Park with
project needs.
• Projects examples include: Market research,
presentation development, business plan
assistance, beginning a website presence, logo
development, public relations assistance, user
interface design, and lab setup service.
• All free for incubator clients.
• There were 45 Shared Services projects in FY14
completed by 15 student interns: 18 websites, 13
logos, 11 marketing projects, 2 business reviews.
13
Lean Startup Training: NSF I-CORPS
Stand in front
of Class and
describe
Business
Model
Update
business
model
Validate
hypothesis
with
industry
University of Illinois is one of
15 US sites in NSF I-Corps
50 teams, launched in 2013
Receive critical feedback
from teaching team and
peers
Education
from
teaching
team
Graduate students and faculty form teams before
6/15/2015
launching
a company. Teams have raised $6 million.
14
I-Start Program Objectives & Parameters
•
•
•
•
•
The I-Start program helps support and launch new companies from the University
of Illinois with professional services.
The goal is a low-cost program that nudges promising researchers through new
company formation.
Participation includes a commitment from them to launch a company locally in our
university incubator.
Award Levels
No equity is taken in the companies.
7 companies
90%
It is a matching award program that
Funding
provides 50-90% of startup professional
75%
service costs in the first year of a business.
–
•
Funding
Support local business both for the startup
and professional providers
50%
Funding
Startups are accepted on a competitive
basis on a rolling basis.
8
companies
30 companies
15
I-Start Program Services
EnterpriseWorks negotiated service packages with qualified providers that focus on tech startups and will provide the
components of the program to all accepted I-Start clients within the rates authorized in the program.
I-Start Entrepreneur Services
Service Types
Scope of
Services
Legal Services
•
•
•
•
•
Cost for
Service
Package
Initial Company
Formation, bylaws,
application for FEIN
(filing fees paid by
entrepreneur)
Stockholder
agreements and
certificates
Stock option plan
Employment
Agreement
Non disclosure
agreements
$2,200
Business Planning
•
•
•
•
•
Write Business
Plan with inventor
input
Market Research
Financial
Projections
Recommendation
on sources of
capital
Assistance with
hiring and
incorporation
decisions
$7,200
SBIR Assistance
•
•
•
•
•
•
•
Finding
solicitation and
agency fit
SBIR process
guidance
Draft budget
Writing
assistance
Help with letters
of support
Project
Management
Registrations
and Submission
$2,500
Financial and
Payroll Services
•
Payroll admin
•
Quarterly
Financial
Statements
•
Assistance
with
Quickbooks
setup for the
business
$3,000
Student Shared
Services Center
•
Market research
•
Presentation
assistance
•
Initial template
website
•
Logo assistance
•
Social media,
adwords
•
IT/Computer
system setup
(up to 100 hours of
student work)
in-kind contribution
of $1,400
Optional additional services: prototyping, immigration assistance, regulatory planning,
crowdfunding campaign, branding
16
I-Start Entrepreneur Profiles
45 companies have participated in the
program since beginning in October of 2011
18
Diverse Technology Fields
• 18 software/hardware companies, 11
biotech firms, 10
materials/nanotechnology companies, 5
cleantech firms, and 1 consulting firm.
Startups 16 UI Departments
• College of Engineering: Computer Science,
ECE, Physics, Nuclear, Mechanical,
Materials, Biological
• Agriculture, IGB, Math, Education, Vet
Med, UI Extension, Chemistry,
Microbiology, Music
24 Faculty/staff founded startups, 9 student
founded, 12 with both faculty and student
11
10
5
1
Education FAA
2%
2%
Medicine
2%
ACES
14%
LAS
12%
Engineering
68%
17
I-Start Entrepreneur Results
• 69% of I-Start clients became tenants or affiliates of
EnterpriseWorks with operations in Champaign. One has
incubator space in Rantoul.
• 30 startups have received additional outside funding
• I-Start firms have raised over $66 million in outside capital
since 2011
• 30 SBIR/STTR Awards
• Startups with Venture Capital/ Angel Funding: 17
• Accelerator program funding and competitions: 8
• 8 NSF I-Corps teams
• Funding from community sources: 6
• 2 successful Kickstarter crowdfunding campaigns
Total leverage on investment= 235:1
18