Technology Ventures Corporation takes tech transfer to new markets

Technology Ventures Corporation may have to adjust its modus operandi as it seeks to take even more esoteric research to the marketplace.

By:
Andrew Webb
New Mexico Business Weekly

The Lockheed Martin-funded technology transfer organization, based near Sandia’s Albuquerque lab facility, helps small tech businesses develop their business cases to attract investors. With the aid of a $1.5 million congressional appropriation, TVC last month opened new offices at three more national labs — Los Alamos National Laboratory, Lawrence Livermore National Laboratories, in Livermore, Calif., and the Nevada Test Site, which is near Las Vegas.

The two new labs and the test site are just as interested in technology transfer as Sandia, says TVC President and CEO Sherman McCorkle. But the technology is different.

"Sandia is an engineering lab, which arguably is closer to the marketplace," he says. "Both Los Alamos and Lawrence Livermore are theoretical, which, by definition, is further from the market. Their task, if anything, is more difficult."

According to McCorkle, TVC is in discussions with two more labs, as well as research facilities in South America and Europe. The foreign locations are "more closely related to an academic environment than a lab, per se," McCorkle says.

The expansion effectively doubled TVC’s size — the Los Alamos and Livermore facilities will each have a staff of three, and one person currently staffs the Nevada site.

Bay Area institutions

The tech-heavy Bay Area economy, which annually leads the nation in the numbers of patents and venture capital investments, owes much of its success to nearby research facilities, which, besides Lawrence Livermore, include a branch of Sandia National Laboratories, several universities, and a wealth of research foundations, says Bruce Kern, of the area development council Economic Development Alliance for Business.

"You can trace the number of emerging tech sectors related to spinouts from the universities and labs to the Bay Area," he says. "It’s been an integral part of why this region has been a leading community for an array of technologies. When you combine ideas with a community that understands the financial, legal and business elements with the labs, that’s when you’re able to see this amount of innovation."

Coming up with actual figures for tech transfer from the area’s labs is tough, however, says Robert Sakai, technology and trade director for the alliance.

"Lawrence Livermore in the past tried to do that, and they found it was impossible to document it," he says. "They found that the stuff that was going out through tech transfer tended to be more enabling technology."

Enabling technology refers to a process or method used to improve an existing technology — such as a new manufacturing practice. Considerable inventions that have come out of Lawrence Livermore and into the local business arena have been discovered somewhat by accident in the process of weapons and defense research, Sakai says, making it hard to assign a dollar figure to its impact.

Similarly, Los Alamos National Laboratories, while possessing an active business partnering component, has historically been less interested than Sandia in tech transfer, says Kevin Holsapple, executive director of the Los Alamos Commerce and Development Corporation. "They work hard at it, but they have larger priorities," he says.

Holsapple says the development corporation is glad to have another partner for area small businesses. "We’re glad to see more resources brought to bear," he says.

A changing purpose

Established as the Atomic Energy Commission’s sprawling proving ground for nuclear weapons during World War II, the 1,375-square-mile Nevada Test Site has seen its mission change since a 1992 moratorium on nuclear weapons testing. Under the Department of Energy’s direction, the site has more recently been used for chemical spill testing, emergency response training, conventional weapons testing, and waste management and environmental technology studies.

Its largest users are Sandia, Los Alamos and Lawrence Livermore labs, McCorkle says. TVC’s one staffer in the area will be on hand to identify technology with commercial potential from those labs .

"It will give us one more vantage point," he says.

Nancy Bahr, executive director of the Nevada Microenterprise Initiative, which provides support and small loans to startup businesses, says any new entrepreneurial activity in that area, which is near Las Vegas, would probably be welcome because of tourism declines in the wake of the Sept. 11, 2001 attacks.

Much of the state’s technology business takes place on the other side of the state in Reno.

"Venture capital is pretty scarce, and so a lot of people are getting frustrated," she says.

Repeating a model

McCorkle says as it does in Albuquerque, TVC will hold a similar equity capital symposium in California. And, through its offices in the Los Alamos Research Park, the organization hopes to attract businesses from Los Alamos, Española and elsewhere in northern New Mexico to its Albuquerque event.

"We can do things the labs can’t do," he says. "We’re in the business of picking winners and losers — the labs, simply by federal statutes, can’t do that."

But the work in California may be more focused on matching companies with enabling lab technology.

"There [are] many ways a technology can be related to a laboratory other than the lab inventing it," he says. "There’s technology assistance, strategic partnerships — we give preference to all those."

He says the company has developed strong relationships with more than 100 investors nationwide, partially through a part-time TVC employee who has worked with the Livermore branch of Sandia labs for several years. TVC hired its other Livermore employees from the Bay Area, he says.

"We have good relationships now. This will cause growth of those relationships," he says. "At least we’re able to come to the table with a number of solid relationships — when we started TVC in Albuquerque we had zero."

TVC grows

McCorkle says TVC’s budget has grown significantly in the last year. Originally set at $2.2 million annually, he expects it to reach $6 million by 2004. Until this year, Lockheed Martin supplied the entire budget — but its share has shrunk to about 65 percent as the DOE’s interest has grown.

According to TVC, its efforts in New Mexico have resulted in 47 new businesses, 5,000 jobs and $323 million in business funding from venture capital and other sources.

Though McCorkle’s office on University Boulevard SE supervises the branches, each will retain a degree of autonomy to adapt to their local markets, he says.

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Federal Agency Efforts in Transferring and Reporting New Technology

The U.S. General Accounting Office (GAO) recently released a new study, Intellectual Property: Federal Agency Efforts in Transferring and Reporting New Technology (GAO-03-47), which provides an exhaustive review of the technology transfer activities of major government agencies.

In FY 2001, these agencies generated 3,676 new inventions, 1,585 new patents, and $74.5 million in licensing revenue. The Department of Energy leads the field in new inventions, but the National Institutes of Health (NIH) dominates in terms of licensing revenue, generating $6.1 million in funds during FY2001.

Please load the following site for the full report:
http://www.nasvf.org/web/allpress.nsf/93860bfe22f7c2168625694e004f9f1a/6a90bd933ea18eb886256c75005a4e6a/$FILE/Federal%20Tech%20Xfer.2001.pdf