UNM tech transfer preps first full-fledged spinoff

Like most university technology transfer programs, the goal of the University of
New Mexico’s Science and Technology Corporation (STC) has always been to
garner returns on research performed by students and faculty and to stimulate
economic development.

Andrew Webb NMBW Staff

And since its formation in
1996, the non-profit,
university-owned STC has
issued about 10 licenses to
local startups from UNM’s
large portfolio of technology
— the fruits of $200 million
per year in federal and state
research funding.

But when current CEO
Peter Perna came to the
university two years ago, he
had an idea that he said
could strengthen the STC’s
position as a revenue-earner
for the university: Instead of
just doling out inventions to outside businesses, the STC would start building
businesses from the ground up.

"The only way we’ll see significant return from our licenses is if the businesses
are successful," he says. "I decided we needed a more proactive approach. We
needed to create companies around technologies."

The STC’s first company, for which it built a business plan, recruited a
management team and provided space, is in the final stages of closing a $1.5
million round of seed investment. Concise Logic Inc., which now employs about
26 people, will soon move into larger offices in the Science and Technology Park
on University Boulevard, and will produce software developed by UNM’s
Microelectronics Research Center for the computer chip industry.

"We looked at the technology, decided there
was a business there, and wrote the
business plan," Perna says. "Historically,
technology transfer offices patent stuff and
wait for the phone to ring."

The STC’s method represents a unique take
on university tech transfer, says Joyce
Brinton, director of the Office for Technology
and Trademark Licensing at Harvard
University and former editor of the Journal of
the Association of University Technology
Managers (AUTM).

"There aren’t many universities that actively create or help create the company by
getting financing, creating business plans and getting management," she says,
noting that most tech transfer programs limit their work beyond licensing the
technology. "In most cases, such institutions serve as a facility that links the
companies with venture capital, rather than forming the company themselves."

Brinton says the number of institutions getting involved each year makes
university technology transfer one of the country’s fastest-growing industries. It
has been steadily growing in popularity since the 1980 Bayh-Dole Act gave
universities the right to keep — or sell — the title to inventions made with federal
funds.

Perna says the STC, which operates on a yearly $750,000 budget, has plans for
similar projects in the future.

Key to the program, Perna says, is the recruitment of managers for such
companies.

"I believe that the scarcest resource we have in Albuquerque is not investment
money, consultants or attorneys, but experienced management — folks who can
grow their own companies," he says.

The STC recruited Cincinnati, Ohio, technology consultant and former Dupont
Vice President Cliff Schwieter to head Concise Logic. "They gave me a call and
asked if I wanted to take a look at the company, and I did," Schwieter says. "I
looked at the folks and the project and fell in love. I just said `Hell yeah!’"

Schwieter says the company plans to grow to a staff of 58 by the end of its
second year.

Meanwhile, Perna says the STC is in the process of recruiting two serial
"entrepreneurs in residence," (EIRs) to take the helms of future spinout
companies based on UNM research. The EIRs would receive small stipends and
would have a chance to get acquainted with the local business scene, he says.

Perna hopes the project will make UNM more noticeable to venture capitalists
and their money.

"It is true that New Mexico is largely off the radar screen of VCs outside of the
state," he says, noting, however, that things are beginning to change. "MIT and
Stanford — they’ve been picked over."

Perna says the STC has, so far, generated no revenue for the university, largely
because most of the currently-issued licenses have yet to generate profits for the
licensing companies. He says he doesn’t expect a return from Concise Logic for
up to six years.

"If we do enough of these and some additional licenses in combination, we hope
that within five years the STC will be generating significant revenue to UNM," he
says.

Mike Wallace, founder and chief technology officer at local computer graphics
hardware startup Global Haptics, patented and licensed much of the technology
for the company’s GeOrb device through the STC, avoiding patenting costs that
can start at $10,000. He now licenses the technology back from STC.

"The people that are thinking of these ideas usually don’t know a lot about
intellectual property or have entrepreneurial skills, and the STC can provide all of
these things," he says.

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