Before early-stage entrepreneurs at universities can go to market, they must literally "prove the concepts" of their innovations. The work may entail developing a research technology further,
perhaps to a working prototype, and/or studying markets to see if the business
concept will fly.
Proof of Concept Centers are a new model of support at some universities that provide seed funding and expert assistance to help entrepreneurs prepare for the strongest market entry possible. Recognizing that the Centers are an effective method for launching the commercialization of university innovation and to fill the seed-stage funding gap for new technologies, the Kauffman Foundation is facilitating networking among these centers, studying best practices, and establishing metrics for measuring outcomes.
Two examples of Proof of Concept Centers are the William J. von Liebig Center at the
University of California, San Diego, founded in 2001, and the Deshpande Center
at MIT, founded in 2002.
Each center takes proposals from its university, mostly from engineering
research faculty, on a competitive basis. Those selected (by internal and
external commercial experts) are given modest but crucial seed grants (up to
$50,000 at UCSD, $75,000 at MIT) for proof of concept work—which the researchers
can pursue in their own labs and offices without moving into any central, shared
space. For expert assistance, the von Liebig Center has a paid, part-time staff
of experienced advisors, while the Deshpande Center draws from a pool of expert
volunteers, plus graduate-student teams, that help with feasibility studies.
Both centers also offer education programs and conferences, and Deshpande has
larger follow-on grants for ventures of high promise.
Results thus far suggest that the proof of concept center is a good model. By
early 2008, the two centers combined had given out nearly $10 million in grants,
producing twenty-six spinout companies that raised an additional $159 million in
private investment. And the process is useful even when it demonstrates that a
research idea will not be viable. The researcher can move on quickly to other
work, better informed about what could help make the next idea a winner.