Gap Article: University Gap Funding: Mind the space

University Gap Funding: Mind the visible difference

With all of eyes around the economy, policymakers are quick to invoke the buzzwords during the day, including �innovation�, �economic development�, and �job creation�, to explain the beneficial impact of commercializing early stage technology, often from research universities. Recently though, apparently special interests, without any workable solutions, are grabbing headlines and helping to craft policy depending on the suggestion that research universities do little to guide this opportunity.

In case you have accepted this info as fact, you would understandably think the machine has neglected its duty, has failed, and is will need a revolutionary fix; however, with minimal investigation, you will find that universities have lead in the development of tactics and programs that address critical barriers to early on commercialization, often in advance of other private and non-private entities.

One particular example, could be the development of gap funding programs to handle the main city shortage that are available for early-stage technologies and start-ups.

So what is gap funding? How can gap funding relate with other forms of innovation capital? And is there a impact of gap funding (why would you care)?

What is Gap Funding (An improved Definition)?

The �gap� in gap funding is the term for a massive shortage in capital as well as other commercialization support to transition early-stage technology to the marketplace. To address this need, many research universities either directly manage or partner with gov departments, early on investors, or corporations to make translational research, proof concept, and pre/seed-stage gap funds that will help in evaluating, de-risking, or commercializing technologies and start-ups.

Defining this �gap� too broadly (e.g. �Valley of Death� or �between basic research along with the market�) oversimplifies the complexities in the situation and clouds the direction to resolution. Frankly, it might be reasons why this type of funding is less covered in mainstream press, and much less understood from the average person. To relieve this tension, I propose which enable it to demonstrate a much more actionable, segmented system depending on fund observations.

Translational Research
Translational Research gap funds enter after traditional options for investment in basic research cease, and secure the promising projects which need additional applied development. The supreme goal is to buy the technology to some extent where it could be assessed for commercial potential, or aligned with all the priorities of your external partner happy to develop the technology further

Proof of Concept
Proof of Concept (POC) gap funds evaluate commercial potential, demonstrate value of we've got the technology, and often de-risk it (or thought of risk) for commercial partners or investors. By developing the commercial groundwork, including prototypes, IP/competitive landscaping, and application evaluation, these funds aim to identify and secure a route to commercialization (license to existing company or spin-out). POC gap funds also work as a procedure filter by identifying weakness from the technology for even more development, or by deciding not to pursue the technology which saves often larger resource requirements later along the way (a standard recommendation generally in most new product development literature). From my research, this can be the most widely-utilized, and necessary gap fund type

Start-up Formation
This emerging gap fund type aids in earlier formational steps of latest company creation - often ahead of it transforming into a legal entity. Business Formation funds can be viewed as a start-up-focused extension of proof concept funding (post route-to-market decision) that develops the business use of the technology through general market trends, developing the site, business development, management, space, and equipment

Start-up Growth
As scalability and growth become major objectives, some investigation universities are creating, spun out, or partnered with seed funds and accelerators, both public (government) and (corporations, investors), to fill a void during the early stage capital. The primary purpose of Business Growth funds is usually to scale an attractive business that can cause jobs, generates a risk-worthy return on your investment, and attracts capital by leveraging other external investors

To sum up, adopting this segmented procedure for gap funding generates a model which is actionable, relatable, and customizable for the reason that it:

Aligns with popular technology product development processes
Allows for an individual approach which is using the specific resource needs and existing culture from the funding institution
Creates a system that's identifiable by stakeholders of early-stage innovation (private and public), and supplies them a chance to identify their role as being a partner in the process

What makes gap funding correspond with other styles of innovation capital?

The normal model of initial phase technology and start-up funding - prevalent in operation books and policy reports - depicts government-funded research magically transitioning to application by way of a license with an existing company or start-up. The start-ups are then supported inside their early development by government grants, bootstrapping, and throughout angel or capital raising investment as they focus on profit, growth and liquidity.

This view is as well as places and emphasis on some types of early stage capital; however, it's also misleading and shifts the main focus downstream. It ignores a serious portion of the realities of early stage technology development-especially people that are realized by those involved with commercializing university research (longer to-market timelines, resource intensive).

In this view, gap funding and other emerging and disruptive options for initial phase capital are often overlooked and under resourced because they are literally not from the picture; therefore, I offer an updated version in the initial phase funding landscape-one that positions gap funding and also includes the actual status of other designs of traditional, emerging, and disruptive options for initial phase capital and support

All these sources of initial phase capital are crucial to transitioning university along with other early-stage technology for the marketplace; but, there are a few inherent conflicts that inhibit their capability to supply reliable and well-positioned assistance noisy . stages of technology and start-up development. Many of these weaknesses include:

Aversion or wherewithal to fund translational research, proof concept, along with other beginning of start-up development
Structured to produce larger investments in fewer deals
Focus on investment sectors that may not address technology with longer development timelines, resource intensity, and IP/regulatory hurdles
Motivations (incentives towards near term returns) and constraints that could limit power they have to simply accept the risk of early stage innovation

An excellent strategy to address this capital shortage is to sometimes a) attract retreating varieties of early stage capital and commercial partners into the �gap�, or b) invest straight into mixers be more effective positioned to finance the �gap�. The most effective approach is to compliment an answer, like gap funding, that accomplishes both.

Research universities and partners are creating gap funding being a capital and innovation support mechanism which is ideally positioned to deal with the critical elements of transitioning university technology and start-ups, as well as attracting additional capital and third-party interest.

While it may not yet hold the prestige of other styles of initial phase capital, gap funding is appearing to be a disruptive approach that is certainly better aligned with and contains the power to support technology and start-up boost early stages through:

Focus on translational research, proof of concept, and start-up development
Targeted smaller grants and investments per project, that enable to technology or start-up being more adaptive to development �pivots�
Directed to finance university projects, often in several technology areas with varying to-market requirements
Positioned with a nexus of college, students, and business networks
Mission-driven to innovate, educate, and job create