September 16, 2009

Section: Business, Page 5B

Funding sought for college startup firms

Cornell University President David Skorton, left, and the University of Rochester President Joel Seligman get ready for Tuesday's meeting over support for university-based business startups. (WILL YURMAN staff photographer)

Upstate university and business leaders Tuesday urged a state task force to help bridge the "valley of death" — the seed-funding wasteland that lies between higher-education research and profitable commercialization.

Speakers at a public hearing Tuesday at the University of Rochester Medical Center emphasized that New York lacks adequate private venture capital and public financing to get startup companies arising from university research into the competitive marketplace. The state ranks 25th nationwide in the amount of public dollars dedicated to startup capital and seed funding.

Some at the hearing supported the creation of a regional state-financed fund to help close the gap, get startups on their way and, through enhanced public involvement, spur more private capital investment.

"The transition to a knowledge-based economy is fundamental for New York," said University of Rochester president Joel Seligman. "Partnerships and joint efforts are pivotal in the clinical and applied sciences."

"We've already lost many great ideas coming out of the university that couldn't find the startup funds," said UR vice president Peter Robinson.

Theresa Mazzullo, CEO of Excell Partners, Inc., which helps university startups make the transfer to commercial life, told the gathering about six college-spinoff companies that left the state because government support was inadequate.

The public hearing, which was followed by a closed-door session for some of the school, corporate and government officials involved, was one of two such meetings scheduled by the task force on the university-business nexus.

The commission was formed by Gov. David Paterson this year and is headed by Cornell University president David Skorton. The second hearing will be at the City College of New York on Oct. 9. The task force's report is due on Dec. 15.

The commission will report to the governor on ways to improve and accelerate the development of university-born ideas in energy, biomedicine and other technologies, and to come up with ways to do so "without requiring significant financial investment in recognition of the state's limited capacity at the current time."

Despite that cautionary note, speakers Tuesday representing the State University of New York system, Monroe Community College, Clarkson University, Rensselaer Polytechnic University and such private partners as Excell Partners and High Tech Rochester repeated the theme that New York has a treasure trove of research brilliance ready to be forged into commercial products.

Robinson, in his presentation, recommended the creation of an annualized state fund for seed funding, with $7 million set aside for western New York.

Robert Simpson, CEO of the Metropolitan Development Association of Syracuse and Central New York, said the state's focus is essential but not definitive.

"We need a national innovation policy," Simpson said. "Currently, as a nation, we spend only $2.7 billion in investment in these new businesses." He proposed tax credits for individuals and corporations that invest in new technologies.

Skorton said the task force is at the midpoint of its review but that he favors a public-private funding approach. "In California, 47 percent of the funding for university research and development comes out of national private capital," Skorton said. "In New York, the number is 4 percent. We're not accessing our share of venture capital."

Robinson said the ascension of former Greater Rochester Enterprise head Dennis Mullen to lead the Empire State Development Corp. could help ease the funding path through the perilous valley. "Now is the time to invest in innovation," Mazzullo said. "Now is the time to take bold steps."

Linda Sanford of IBM and others listen at a meeting on how to aid companies arising from university research. (WILL YURMAN staff photographer)

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