D2P’s Biondi On Getting UW-Madison More for its ($1.2B) R&D Money

[Corrected 12/17/15, 11:34 a.m. See below.] University of Wisconsin-Madison is one of the top-spending schools when it comes to research, but university administrators think its faculty and students could use a boost to turn their ideas into thriving companies.

That’s the mandate for Discovery to Product (D2P), a new campus initiative that aims to hike up the number of annual licensing agreements (currently about 50) and spinout companies (around five) from university research. Madison-area entrepreneur John Biondi was tapped to lead D2P in March. During his career, Biondi has raised almost $60 million for nine startups in sectors like nanotechnology instruments, biotech, medical devices, and software. (Fun fact: he and his wife also run a local apple farm that produces cider and brandy.) Biondi’s strengths are in “early-stage strategy, business, and revenue models, and maximizing market penetration with minimal investment,” the university said at the time of his appointment.

D2P is funded by $3.2 million from the university and the Wisconsin Alumni Research Foundation (WARF), as well as a two-year, $2.4 million grant from the UW System. In the first year, that grant, dubbed the “Igniter” fund, will allow D2P to provide financial and business support to up to 10 projects with the potential to be licensed or spun into a company between now and June 2015. D2P will also work with approximately 25 other pre-company innovations in the first year that weren’t chosen for Igniter money, Biondi says. [An earlier version of this paragraph incorrectly stated that the source of the Igniter grant was the Wisconsin Economic Development Corp. We regret the error.]

I sat down with Biondi to hear his vision for D2P. The following is an edited transcript.

Xconomy: What is D2P and what is it trying to accomplish?

John Biondi: Simply put, D2P is bringing an accelerator model into the University of Wisconsin-Madison. Our goal is to increase the efficiency with which we here at the university commercialize technology. We’re trying to make that process at the top line, taking in the R&D funding that we bring here—which last year I think was $1.2 billion—taking that money and creating intellectual property out of it and then creating licensing arrangements and companies out of that intellectual property. We’re just trying to help with picking up the pace of that a little bit and trying to make that efficient.

X: But aren’t campus entities like WARF’s Accelerator, the Center for Technology Commercialization (CTC), and the UW Institute for Clinical and Translational Research (ICTR) already doing some of those things? How does D2P fit into the picture, and what specific gaps will it fill?

JB: Each of those programs is funding projects of different types and at different stages: Accelerator is strictly WARF IP; ICTR is biopharma; CTC tends to be already incorporated companies and is the source for [Small Business Innovation Research] help. D2P is broader in that it covers any idea coming from the UW-Madison campus. Although Igniter funds can’t go to already incorporated projects, D2P will provide help and money for pre-incorporated projects and then follow through with them into incorporation and commercialization.

Our goal is to bring these projects out to the edge of the university, where at that point they would either have…already engaged with licensing partners and have a high probability of seeing a licensing agreement consummated, or they are definitely ready for incorporation and funding and indeed they have people they are already talking to that potentially could fund them.

Longer term, we are also looking at trying to put together some equity funding for some of these university projects that might have some university connections. For instance, university alums or foundation money that we could put into an angel fund. That’s just in early conversations right now, but I think that’s hopefully a possibility over time.

That would connect with D2P-graduated projects. It would focus on those and look at those in order to provide them with that first round of equity funding on the other side of incorporation.

X: What will D2P’s process look like?

JB: This funding submittal process [for Igniter funds] will be our intake process. That’ll bring to us the projects that we will deal with.

There will be two pools of those projects. The projects that we fund will come immediately into what I’ll call a fast-track or an accelerated pool. We’ll wrap around those projects the typical types of resources that are wrapped around accelerator model companies, these external accelerators like Gener8tor here in Madison. They’ll be heavily mentored; there will be subject matter experts brought in to help them out.

The funding will be handed down on a milestone basis, so there would be a strict management of milestones and a heavy focus on moving the project along not just scientifically, but commercially. …[A milestone example] might be validation of their value proposition through customer interviews. It might be validation of their growth proposition through customer interviews. A technical milestone might be the next experiment that reduces risk, [ensuring that it is] accomplished and checked off that it was positive.

That’s the accelerated pool. The projects that don’t get funded but make the first cut, so to speak, will be put in another pool. That pool will get similar types of attention, but just not at the same level. We’ll look at team formation in that group. We’ll begin to help that group begin to develop their commercial strategy, their business plan, their business model, their connection to the market, value proposition validation, things like that. Graduation out of that pool will be upon achievement of some significant funding, whether that’s the Igniter…money, or some other money, or a significant grant. That would put them into the accelerator pool, where we can move them through that process. Graduation from the accelerated pool would be upon licensing or incorporation and equity funding on the other side of incorporation.

X: If students and faculty will be vetting their ideas with outside mentors and potential customers before incorporating and/or licensing, should they be concerned about how well-protected their intellectual property will be during this program?

JB: [People from outside the university] will be required to sign confidentiality [agreements] with any project that they mentor. As university employees dealing with university people, we are under confidentiality in that relationship.

I think D2P will be a positive in that regard, in that we can help coach these projects as to what they need to do in order to protect their confidentiality and IP.

X: What are D2P’s metrics?

JB: I think we’ve got two measures of success. One is…how much commercialization do we achieve? The baseline metrics are out of that $1.2 billion in research money that comes into the university here. That creates about 350 invention disclosures to WARF, which then creates about 200 patent applications, which then creates about 50 licensing deals a year, which also creates about three to five spinout companies per year. We would like that 50 licensing deals to be a higher number and the three to five spinout companies to be a higher number. That’s what we’re focused on over time.

X: Do you have a specific target in mind for the number of licensing deals and spinouts?

JB: No, not yet. Clearly we need to develop that and develop what we think our metrics should be based on the quality of what we find here on campus and our ability to move it through [to commercialization]. Longer term, the goal is to make D2P sustainable, i.e. to make this Igniter fund self-sustaining. It would look like either a more permanent arrangement with the state on some level of funding for this, as well as the possibility of some of these alumni funds that we might be able to connect with D2P to fund both the internal process and the equity funding on the outside.

Trending on Xconomy