What is the Secret Sauce to Convert Academic Ideas to Valued Offerings That Prospective Buyers Crave?

Penn Center for Innovation’s Michael D. Moisel, MS, MBA

Michael D. Poisel, MS, MBA, is responsible for managing Penn Center for Innovation (PCI) Ventures (PCIV), assisting the principal investigators with funding strategies, as well as mentoring developing companies. Prior to UPenn, he made investments in enterprise software and business services for NewSpring Capital, Apax Partners, and GE Capital.

Poisel graduated with honors from Rose-Hulman Institute of Technology. He also earned his MS from The Moore School of Engineering of the University of Pennsylvania and an MBA from The Wharton School of Business of the University of Pennsylvania.

Q: For 2023, it was the second year in a row that Penn reported the highest amount of gross licensing revenue among its institutional peers and affiliated startups raised or received over $1 billion in new investment capital, a new high-water mark at Penn. What is PCI’s secret sauce to convert academic ideas to valued offerings that prospective buyers crave?

Poisel: The secret sauce all begins with the world class research that Penn does daily and which is valued by stakeholders given our ranking of number one for NIH Training Grants and number two for NIH funding.¹ With 2023’s annual research budget of over $2 billion, many creative ideas are generated and it is PCI’s role to help support Penn leaders with commercializing them. Specifically, our mission is to help accelerate the potential benefits of their research for the Penn ecosystem and society in general.

From a high-level perspective, PCI helps to determine the projected commercial value of the proposed idea. Our team of licensing officers perform the necessary due diligence that looks holistically at not only the net present value, but also societal benefits. As for investment timelines, while early paybacks are valued, we do recognize how some investments are long-term in nature, such as 15 to 20 years for new drugs and maybe even longer for new materials.

Then it is about purposeful communication and engagement with our potential partners, including Fortune 500s, PE/VC firms, and government agencies regarding the estimated value creation of the new ideas. Securing their feedback is crucial as it can result in the team pivoting accordingly.

There are milestones such as filing provisional patents, which are relatively inexpensive and easy to prepare. But as time progresses, PCI helps the inventors make the hard decisions about stopping or continuing. For instance, during the national phase when we’re determining the filing of patents in other countries, that step is expensive, so the leadership team needs to be convinced on the commercial viability before proceeding.

Depending on PCI’s chosen strategy for each technology, we will either attempt to license the innovation or create a spinout company, through its subsidiary PCIV, that will more fully develop the discovery before handing it off to a corporate partner. If we choose the spinout path, PCIV has a five-step playbook intended to help catalyze commercial activity and translational impact regardless of the research area from which it was developed.

Leveraging the work of Penn’s subject matter experts, entrepreneurial teams develop a plan for the business, allowing Penn professors to focus on what they do best, world-class research. The PCIV team helps address the multiple commercialization requirements including:

• Company formation
• Team recruitment
• Business development
• Capital acquisition
• Business operations

For example, PCIV matches company projects to entrepreneurs with the experience and capabilities necessary to begin building out the team and infrastructure of the company. For capital acquisition, PCIV provides comprehensive support that founders need to produce high-quality grant applications that are well positioned to secure commercialization awards as well as introductions to a myriad of private investors.

And for business operations, PCIV has developed a library of legal document templates (e.g., operating agreement, management agreement, convertible note, etc.) to reduce early-stage legal expenses. Lastly, PCIV stays involved in the development of the company as a business advisor and often board member until the team can stand on their own. I’ll include a video where you can learn more about these services.

About the Author

Michael Wong is a part-time Lecturer for the Wharton Communication Program at the University of Pennsylvania. As an Emeritus Co-President and board member of the Harvard Business School Healthcare Alumni Association as well as a Contributing Writer for the MIT Sloan Career Development Office, Michael’s ideas have been shared in the Harvard Business Review and MIT Sloan Management Review.

Reference

1. https://research.upenn.edu/research-at-penn/by-the-numbers/