Venture Capitalists to Help Universities Profit from Innovation

Damon Darlin of the New York Times discusses some efforts to help universities extract greater value from their intellectual property. Namely, a venture fund (Osage Ventures) has entered the scene to help universities increase returns. From the NYT:

But for the most part, universities aren’t particularly adept at extracting the full measure of profit from all those innovations. While university technology transfer offices routinely license the intellectual property developed on campus, the schools themselves often aren’t very nimble at retaining large stakes in the start-ups that exploit that property.

Investing in start-ups is the business of venture capitalists, some of whom have come up with a new formula for profits. It goes roughly like this: Give a few V.C.’s access to the technology deals. Let them raise some capital and invest it shrewdly. The V.C.’s become rich. And if the deals are done correctly, the schools share handsomely in the riches. As an incidental but significant benefit, it’s at least possible that venture capitalists, working with universities, could help create manufacturing jobs in the United States.

BTW, there is a strand of this article that is heavily focused on jobs and argues that consumer oriented tech firms with huge valuations (such as Fbook and Zynga) don’t employee nearly as many people as traditional manufacturing firms such as Ford and Sara Lee. The Osage fund is explaining that its firms will eventually lead to manufacturing jobs

What interesting is that this line of argument, supporting investing in manufacturing oriented firms, is that it counts 1 job as 1 job. Do we want to create more line jobs at Sara Lee packaging and shipping facilities? Do we want engineering jobs such as those at Facebook? (huge pay and social impact differentials between the tw0 types of jobs)

The connection, as pointed out near the end of the article, is that Universities, even private ones, have a public good element to their existence and expectations of them. Creating jobs — economic development — is part of the mandate and Osage is pointing to the potential of their fund to achieving the job goal/expectations.

via New Fund Give Colleges a Greater Stake in Their Innovations –


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