Recipe for Start-Ups: Sabbaticals, Tenure Credit for Patents, and a Dash of 'Disorder'

January 19, 2012

Looking to attract investors who will turn faculty and student inventions into companies? Try these three tips:

  • Provide sabbaticals that will let professors work alongside entrepreneurs.
  • Create tenure policies that reward faculty members for patents.
  • Remember to "allow for the disorder of innovation."

Those were among the recommendations at a "Presidents-Investors Summit" here Wednesday that attracted venture capitalists, university presidents, and government officials. Many came because universities face political and economic pressure to smooth the process of commercializing research, and administrators are scrambling to put in place a range of new programs, such as no-fee licensing arrangements and simplified agreements for sponsored research.

But "you have to leave room for some chaos," said David Wells, a partner at Kleiner Perkins Caufield & Byers.

And it wouldn't hurt, said another speaker, if universities were more creative in playing up any ties investors might have to the campus. "They love to go see their kids," so figure out if any students have parents in the field and reach out to them before a parents' weekend, suggested Mark Heesen, president of the National Venture Capital Association. "You all have some of that information, I think," he said with a knowing nod to university leaders in the audience of more than 150.

The suggestions on tenure and sabbaticals are not new, but the practices are not widespread. According to a new survey of more than 50 research universities conducted by the National Council of Entrepreneurial Tech Transfer, only 50 percent of institutions permit sabbaticals for faculty members to pursue commercialization activities, and only 48 percent include patents and commercialization in tenure decisions.

Although the survey sample was small, other findings were also notable: Only 19 percent of respondents said their negotiations for licensing rights to commercialize research take longer than six months; 76 percent said they encourage academic researchers to consult with industry; and fewer than 18 percent said they offer programs to help alumni create start-up companies.

Providing sabbaticals that would make it possible for investors to work with faculty inventors for more than a few hours a week would signal a university's commitment to start-ups, said Mr. Heesen. "A venture capitalist is going to say, 'I don't give a hoot about how many papers you've written,'" he added. "Giving faculty the time to actually work with a venture capitalist is very important."

Mary Sue Coleman, president of the University of Michigan, said her institution and others recognize the need for new approaches to encourage commercialization, particularly "so faculty who are increasingly inclined in that direction "don't feel they're banging their head against the wall." At Michigan—which recently committed $25-million to support faculty start-ups­­—the engineering school already takes patents into account in its tenure decisions, and Ms. Coleman said she would encourage the university's other departments and schools to consider them, too.

At the same time, said Holden Thorp, chancellor of the University of North Carolina at Chapel Hill, universities need to be mindful of the limits of research commercialization and academic start-ups as tools for economic development.

"Universities have to be very careful about overpromising in this area," Mr. Thorp said. Even if they create dozens of companies that employ hundreds of people, "it's not going to make up for all the jobs lost in Detroit," or the textile-industry jobs that have disappeared in recent decades in North Carolina.