One of the initiatives of this website is to highlight unique programs designed to improve the commercialization of basic research and ideas. Recently, I read an article about AZ Furnace which is a startup accelerator designed to incubate and launch new companies created by licensing technology and intellectual property from Arizona’s premiere research institutions, including Arizona State University, Arizona University and Northern Arizona University. This is the first statewide attempt to push technology transfer through an accelerator model. Teams are invited to apply to the program by submitting a business plan related to a technology available for use, including those in the life science space. Winning teams receive a grant of $50,000, including at least $25,000 in cash and the remainder in services, as well as six months of incubation space. To find out more about the program, I conducted an e-mail interview with Gordon McConnell, who is the Assistant Vice President for Innovation and Entrepreneurship at Arizona State. If you have any questions about the program, he can be reached at gordon.mcconnell [at] asu [dot] com
Start-ups are often expected to be able to clarify their value proposition as part of an “elevator pitch”. What is the elevator pitch for AZ Furnace?
The elevator pitch is simple – let’s take the technologies, copyrights, and intellectual property that universities produce from federal funding (the unencumbered ones), and offer them to the entrepreneur community (inside and outside the university) in a format that makes commercialization simpler than what has been done in the past: from not needing a double PhD in the subject matter to understand the technology (what we call ‘translating the technology into English’), to having a simple site where you can sift through the best in a state, to having an incentive/support to start the new company via seed funding and six months acceleration.
Unlike most accelerators, AZ Furnace does not take a small equity stake in exchange for its contribution. What was the motivation behind this approach?
AZ Furnace doesn’t but the technology transfer office will. The licensing process, as per the law of the land, means the universities will and indeed have to take a small single digit equity share in the startup – no way around it in terms of licensing here, or indeed elsewhere in the US too I believe, but it is single digit. I didn’t want to hit the startup twice by the accelerator also taking equity. The funding is a grant from two state organizations, so we don’t have to offer equity for that. Again, it is about incentivizing folks to look at what they can do with assets that the people of the state technically own, in a sense we are trying to connect two asset classes together – the technological assets from our labs (knowledge) and entrepreneurial teams who can bring it to market (implementers).
For a given technology, are you looking for the in-licensee to a team of experts familiar with that technology?
Indeed some of the teams will be faculty or postdocs and external – we have warned our own folks that they will be unlikely to get through to the winners circle if it is just two doctoral or post-doctoral researchs from a lab, that we and the judges are looking for mixed teams. In some cases the faculty may not want to be involved, outside of the gain they might make via the licensing model mentioned above, though we are hopeful that grad students or docs at the very least from those research labs may be enticed in time to join an external startup that is commercializing their ‘stuff.’
What would be your ideal team applying to AZ Furnace?
Our ideal team would consist of one person from the lab and/or similar tech experience from outside, plus someone from outside with startup experience, perhaps with someone with experience in the corporate world. One example I know of: two US veterans, one Marine and one US army, plus one ASU staff member (not an academic), and external ex-corporate person. Another example is one post-doctoral researcher, one faculty member, and two external ex-corporate folks.
The visitors to this website work in the life sciences space, and according to our analytics, over half are from the United States. For many, California, Massachesutts and North Carolina are considered the major state clusters for life science start-ups in the US. Why should an aspiring entrepreneur consider moving to Arizona?
Arizona offers many benefits. It is a “right-to-work” state, is geographically very close to California, but with 1/3 the cost of doing business. You are able to find good technical talent, can able to buy a house, there are no traffic issues, and there is very good overall weather. Arizona allows access to Mexican market, with three top universities and a bubbling startup ecosystem! Plus, there is funding and support organizations like Arizona Commerce Authority, AZbio, and BioAccel.
Ten years from now, where would you like to see AZ Furnace? What metrics are you using to judge the success of the program?
We would like to see not one, not two, but many Furnaces including replication in other states, and maybe in other countries. We are interested in talking to people outside the state about this, especially the states that are NOT the usual suspects, not a NYC, or Raleigh or Silicon Valley… In terms of metrics, we are looking at the number of technologies, enquiries, attendance at events, applications (hoping for 35-50 for this beta test), new start-ups funded (6-10 for this beta), follow-on fundings, etc. etc.
Again, special thanks to Gordon from AZ Furnace for helping with the interview. Again, for questions, please go to www.azfurnace.org