New network fosters start-ups

A new investor network is ready to help campus researchers create the start-up ventures that transfer academic technology to the commercial sector.

Wisconsin Investment Partners, formed in March, provides the type of funding most often ignored by venture capital firms and other institutional investors – money for basic product development research. These investments provide the first-stage funding necessary to take a company from concept to laboratory or office.

In addition to start-up funding, WIP partners, some of whom have set up companies themselves, provide free consulting along the way. Richard Leazer, former managing director of the Wisconsin Alumni Research Foundation, and Terry Sivesind, an active founder and officer of many Wisconsin spinoff companies, serve as WIP managers.

Sivesind says the investor network can help researchers “polish and package” technologies throughout the early research and development stages, and can offer advice on whether the time is ripe for commercialization.

While the company is still “on paper,” the founders can be finalizing a business plan, developing a corporate identity, lining up lawyers and accountants, and finding business collaborators. The researchers can also make licensing arrangements with WARF, apply for Small Business Innovation Research Program and Advanced Technology Program grants, and look for the physical space for their companies. When funding arrives, the researchers should be poised to rent and move into their company space.

For example, in 1995, Jon Wolff, professor of pediatrics and medical genetics and co-founder of Madison-based Mirus Corporation, devised a protocol for delivering naked DNA into liver cells via the intravascular system. At the point where National Institutes of Health funding was no longer appropriate, the technology was transferred to Mirus. The spinoff company was able to attract $3 million of federal funding to Wisconsin in the form of SBIR and ATP grants to initiate the commercialization of the DNA technology.

Spinoff companies usually form using researchers’ own money or cash flow, or they use someone else’s money such as venture capitalists or “angel” investors such as WIP. Biotechnology companies are good candidates for SBIR grants and may attract outside private money. Engineering companies don’t usually have enough pizazz to attract investor money: Even though they typically create a product very fast compared to a biotechnology company, the growth rate is not high enough to warrant the interest of venture investors.

To set up free consultations with WIP partners or inquire about funding, contact Richard Leazer, 832-6365, or Terry Sivesind, 238-7674; siv@itis.com.