Paul Freet of the Ga Tech VentureLab speaks to the Goizueta Alumni Entrepreneurs Network
Paul Freet spoke to our group this morning about the Ga Tech VentureLab, and I felt compelled to share it on my blog.
VentureLab was created by Ga Tech to capitalize on IP developed as a result of research at Georgia Tech. It is different from ATDC in that ATDC accepts companies that already have a management team, a product (not a service) and enough funding to pay rent. VentureLab looks for products that are potentially marketable, and tries to connect them with management teams. A VentureLab company COULD graduate into the ADTC program, but not always. Both organizations are aligned with the Enterprise Innovation Institute, which is not to be confused with the Institute for Enterprise Innovation.
Follow the Money:
So, where to start? How about with the Georgia Research Alliance (GRA), whose mission is to attract top research talent to the state schools to grow Georgia’s economy. GRAs university partners are: Clark Atlanta University, Emory University, Georgia Institute of Technology, Georgia State University, Medical College of Georgia and the University of Georgia. GRA has spent over $600M in recruiting efforts over the past 15 years. As the butterfly flaps its wings in one part of the world, so has the results of GRA’s efforts resulted in the creation of thousands of high-skill, high-wage jobs here in Georgia. You can read more about their mission here.
To further this mission, there are commercialization grants that are administered by each school. If there is a promising idea that is approved for commercialization, a team can get $50K to get to the prototype phase (Phase 1). After the Phase 1 milestone has been met, a Phase 2 funding to get to a “Version 1.0” of $100K can be made to companies that are approved to continue, which is actually matched by private resources for a total of $200K. On top of this $250K total of free, non-equity splitting money, a 7-year $250K loan is available after Phase 2 has been met. Some of the catches are, that you can’t use any of these funds to pay for legal expenses (patent apps, partnership agreements, licensing contracts, etc.), and you can’t pay a penny in salaries. However, you can buy lab equipment and use the money for other capital expenditures that move you towards a viable, on-going business venture. In effect, there is about $500K that can become available to promising companies with no equity dilution at all!
Beyond this, there is the GRA Venture Fund, which has received $7M in State funding, and has been matched with a 3:1 to 4:1 ratio of private funds. The AJC has a nice write-up here.
Paul mentioned that the biggest problem he has is finding entrepreneurs to plug into the VentureLab projects. There are plenty of CTOs and Chief Scientists, however, the business of running a business is not exactly exciting to someone who is 100% turned on by their scientific work. Sure, they want to speak at industry events and symposiums, but the idea of building a sales channel, building collateral, etc. keeps them awake in a cold sweat. Fortunately, there are those of us who relish the idea of building a business and building sales channels and creating collateral and signing leases and doing all of that “business management stuff.”
Someone raised the question of why it’s hard to find entrepreneurs. The biggest problem could be the fact that many entrepreneurs are also looking for a paycheck, and many of these companies are 1 to 2 years away from revenue. This is a “nights and weekends” type of opportunity, unless you are independently wealthy and can afford to work without pay.
Paul said that it’s completely possible to get involved with these companies on a part-time basis while you hold a full-time job. If you have the business acumen, they need nurturing and help with a business plan. It doesn’t require 80 hour work weeks. Get involved! Join the VentureLab Fellows Program. This program connects entrepreneurs with projects where they can provide advice to companies while looking for the right cultural fit.
All IP is owned by Ga Tech, who licenses the technology back to the companies. The inventors get 1/3 of the royalty proceeds, and Ga Tech gets the rest. The policy document can be read here. And some additional information can be found at the GTRC Office of Technology Licensing.