Evolving Early-stage Capital: The High Risk/Opportunity Gap

Traditional early-stage capital sources are vital to ultimately transitioning university innovation to the marketplace; however, often exhibit inherent conflicts that inhibit their ability to invest and provide reliable and well-positioned assistance for university technology development and start-up formation. The outcome is a capital gap that forms from the misalignment between the expectations and funding capabilities of outside capital sources and commercialization partners and the needs of research institution technologies and start-ups.

This dearth of early stage development capital must be recognized and addressed as a serious threat to future innovation and associated societal benefits. Left without a solution, many promising technologies and start-ups will be stunted or will struggle to develop on a path of least resistance towards a sub-optimal end.

Moving forward, a good strategy to address this capital gap is either
a) to incent the aforementioned private and public forms of early stage capital into this space, or b) to invest directly into models that are better structured, positioned, and motivated to fund these technologies and start-ups. However, the best strategy is to support a solution that accomplishes both, like university technology and start-up gap funding programs.

Research institutions and partners have created gap funding programs as a capital and innovation support mechanism that is uniquely positioned to address the critical elements of technology development and start-up formation from research institutions, while also attracting additional capital and participation from the technical, investment, and corporate communities.

A realistic look at the early stage capital landscape uncovers a large innovation capital and support gap between the transition of basic research through commercialization — an area that research institutions directly address through different gap fund types. Now in the picture, it becomes clear that research institution-affiliated gap funding programs are uniquely capable from a funding approach, operational positioning, and motivation standpoint to address this challenge.

The Mind the Gap Report 2015, now in its third, expanded iteration, is  an all-in-one program development guide for current and aspiring gap fund managers that investigates 82 active translational research, proof of concept, and seed investment funds at 51 universities and affiliated organizations.

We have put our decade worth of active monitoring of the evolution of these university-affiliated gap funds to save you time and resources, and to support you in pitching new or expanding existing gap funding programs.

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