Universities could invest in own startups

Hector DeLuca

Hector DeLuca, the venerable and prolific leader of the biochemistry field at the University of Wisconsin – Madison, likes the idea of university foundations putting a small slice of their alternative investments into startup businesses on their own campuses.

DeLuca, who has 150 patents and three startups centered around Vitamin D and A advancements in his track record, won a technology innovation award from the MIT Club of Wisconsin last week and then traced the long history of turning intellectual property (IP) of professors into commercial ventures.

Universities have come a long way from their roots when commercialization was considered unethical. “Professors have an obligation to get their findings back to the public,” he said.

He commented that there is a current gap in funding pharmaceutical deals. “Venture capitalists expect returns in ten years, but drug companies need longer” to get through the federal approvals. “There is a great need for investors who are willing to support these longer term deals.”

He added that the Food and Drug Administration could take steps to speed up the approval process. Some of the test requirements for new drugs are “meaningless,” he said.

The Wisconsin Alumni Research Foundation (WARF), the technology transfer organization for UW–Madison, has signaled a willingness to invest in startups. But other foundations at other campuses have yet to follow suit. They will invest in bonds and stocks in emerging countries. Why not a sliver of early stage money into IP on their own campuses?

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  • Keith Schmitz

    That’s a damned good idea John.

    • Anonymous

      Mike, I haven’t talked to anyone yet who didn’t think such investments didn’t make sense. UW Madison Foundation has about $2 billion in assets and WARF is close to that. So a small slice would go a long way. Marquette and the Medical College of Wisconsin each have foundation assets north of $400 million. UWM Foundation is about $100 million.

      Further, if some of the startups become big winners, the successful entrepreneurs will undoubtedly become big donors to their colleges after they cash out. It would constitute a virtuous circle.