Being an entrepreneur isn’t easy. And it’s even more difficult for researchers, who must negotiate a tricky landscape of patents and university licences in order to be able to commercialize their work. To help streamline this process and minimize potentially large legal costs for acquiring university intellectual property, UChicagoTech, the University of Chicago’s Center for Technology Development & Ventures, just launched UCGo!, a new, streamlined startup licensing program. ScienceLife spoke with Cristianne Frazier and Eric Ginsburg, who co-manage UCGo! about their effort to expedite entrepreneurship at the University of Chicago.
ScienceLife: What is UCGo! and why are you launching the program?
Cristianne Frazier: The UCGo! Startup License program is part of a larger innovation initiative at the University of Chicago. We’re interested in making it as easy as possible for startup companies to license intellectual property (IP) from the university so that researchers can start their businesses, attract investors and develop technologies.
Because the license is standardized and it’s a good deal for the startup, researchers don’t have to spend time and money negotiating a license agreement. That will hopefully enable them to invest more in further developing the technology and building a company that will succeed.
Is that the big obstacle for startups right now?
Eric Ginsburg: There are many hurdles, but UCGo! addresses a specific one. UChicagoTech files patents on inventions that come out of the university. If a researcher has a startup company and wants to use the patent, one of the many things they need to do is get a license from the university. We negotiate those licenses. Typically, each one is negotiated separately and it can be an overwhelming process. Small startup companies often have to spend a lot of time and money on legal fees in this process. But UCGo! provides a standard deal with everything spelled out.
This makes it easier to acquire that license?
CF: It shortens the timeframe for researchers to acquire the IP and make the company attractive to investors. Most of the time, until a company has some kind of asset, they’re going to have a hard time pitching their company and raising money. This program just speeds up that process by offering a standardized, optional, non-negotiable license agreement that’s favorable to the startup company. The idea with UCGo! is that the startup can sign the license knowing they’re getting the best deal; that it’s fair and that it’s the same deal for anybody that uses the program.
Is UCGo! more beneficial for the startup than the standard license?
EG: In many cases, yes. In a typical license, we would require that the startup pay all historical costs in the patent family when the license is executed, and also all ongoing costs. With UCGo!, UChicagoTech is covering a portion of the startup’s patent costs until the startup gets its first financing. UCGo! is at the low end of the range for equity terms, and the low end of the range for the royalty rates. We’re deferring patent costs, and there are no milestone payments. We want to allow the company to invest more in its R&D and in developing the technology rather than paying for the license, and we share in the success of the company as the technology is de-risked.
CF: I think that university members who haven’t licensed technology before or who aren’t very familiar with the licensing process would probably benefit the most from this, because it will hopefully make things faster and more straightforward.
Who is eligible to apply for UCGo!?
EG: The program is only available for UChicago researchers. The technology has to be developed here or at the Marine Biological Laboratories, and someone from UChicago has to be a founding member of the startup company. It is available to any member of the university who wants to start a company, including students and post-docs. In most cases, it will involve faculty since they’re the ones leading the research that leads to the IP. If two undergrads in their dorm come up with an app on their own, that’s not going to be university IP unless they’re using research money or working with university researchers. So they wouldn’t need a university license.
There’s an education component to this as well?
CF: Researchers have to qualify to get the license. One of the criterion is that the researchers have to submit an application that contains information typically found in a business plan. That application has to be approved by the UCGo! review committee in order for the startup to receive the UCGo! license. In some cases, researchers may be required to get educational support from the Chicago Innovation Exchange or the Polsky Center for Entrepreneurship and Innovation or other resources to help them develop a business plan. Going through the UCGo! process will automatically put the entrepreneur on our radar.
Do UChicago startups have to go through UCGo!?
EG: No, it’s completely optional. If a company says it’s not for them, we can go through our standard licensing process. They don’t have to take it. But if they want it, and they qualify, here it is. Ready to sign basically.
Will making it easier to license university IP encourage more entrepreneurship across UChicago?
CF: That’s the hope. UCGo! is a new option. We’ll be monitoring whether this increases startup formation on campus. But even if it doesn’t change the number of startups, it will enable the startups already planning on licensing technology to spend more time on business plan and technology development.
At what point should people contact you about their startup?
CF: If a researcher has an idea that they think could have an impact outside the laboratory, they should let UChicagoTech know. The very first step in this process is to call and talk to us about your invention or idea. It’s never too early to reach out to us.