From: allin
Tech transfer involves the commercialization of inventions and research originating from universities and academic institutions [01:19:00]. This process aims to translate fundamental discoveries into practical applications and businesses.
The Tech Transfer Process
Inventions created by professors or students are typically owned by the educational institution [01:19:18]. To commercialize these inventions, researchers engage with the university’s tech transfer office [01:19:22]. They then seek capital partners, such as venture capitalists, to establish a company around the technology [01:19:24].
Universities typically demand a piece of equity in the new company, often in the mid-single-digit percentages (e.g., 5-7%) [01:19:37]. They may also request royalties, also in the mid-single-digit percentages, depending on the nature of the invention [01:19:41]. For institutions like Stanford, which spin out hundreds of companies annually, these arrangements can generate significant revenue [01:19:51].
Variations and Challenges
The sophistication and approach of tech transfer offices vary significantly among universities [01:21:22].
- Sophisticated Offices Universities like Stanford and MIT have highly sophisticated tech transfer offices with standardized deals and royalty percentages [01:19:02].
- Lack of Experience Some schools, historically less involved in cutting-edge research or extensive tech transfer, may lack dedicated teams, leading to difficulties in commercializing inventions [01:19:56].
- Cronyism Some tech transfer offices maintain deep relationships with specific Venture Capitalists (VCS), giving them preferential access to deals and potentially not running a truly competitive market process [01:20:55].
- Varying Deal Structures Deals can range from giving away intellectual property for minimal returns to demanding excessive royalties, such as 60% [01:21:07].
An example of a challenge encountered was the University of Rochester blocking a spin-out related to superconducting research, despite an investor’s interest in forming a company [01:18:38]. Historically, Google, initially “BackRub,” was developed while Larry Page was a PhD student at Stanford, leading to the university receiving a percentage of the company [01:20:25].
Importance of Fundamental Research and Commercialization
The process of tech transfer highlights the importance of fundamental research, often supported by academic institutions and governments [01:21:37]. This foundational work is crucial when the specific applications of a technology are not yet fully understood [01:21:48].
Industrializing and commercializing these discoveries, however, requires a market-based approach [01:21:55]. By building businesses, finding customers, and generating revenue, these technologies can be scaled and fully funded [01:22:00].
This synergy between fundamental research and market-driven commercialization can lead to “explosive growth moments in technology” [01:24:12]. For instance, advancements in Quantum Computing could potentially accelerate the discovery of superconducting materials, leading to dramatic improvements in energy efficiency and computing power [01:23:53].