Record year for spinning off start-ups at UNHBy DAVE SOLOMON
New Hampshire Union Leader
December 22. 2012 9:45PM
An anti-fatigue gel developed by a UNH graduate student didn't win the university's Innovation-to-Market competition last spring, or a competition for venture funding in the fall. But according to Marc Sedam, executive director of the university's Office for Research Partnerships and Commercialization, it won the competition that counts.
"Whether somebody buys your product is the win you want," he said.
Wakup Inc. became UNH's sixth startup company when the university agreed earlier this month to license the technology behind the energy gel, in what has been a record year for efforts to bring university research to the marketplace.
"In the history of UNH, we've done five startup companies prior to this academic year. Our expectation is that we will do three to five in the current academic year," said Sedam, who also directs the university's N.H. Innovation Research Center. "In six months we've done three, and we expect a reasonable likelihood of doing one to two more."
"Commercializing UNH's Intellectual Capital" is the first of the Top 10 initiatives in the university's 20-year strategic plan, released in 2010.
"The university can and should be the primary engine for sustainable economic growth in the state and region," according to the plan. "We will work more closely with private sector entrepreneurs to translate UNH-generated intellectual capital into new ventures and new jobs for the people of New Hampshire."
Sedam said the successes in the past year at the Innovation Research Center are no accident.
"It comes from the top down," he said. "It comes from the president saying we have to focus on commercializing the assets we have."
Bringing research out of the laboratory and into the marketplace not only creates jobs, it generates revenue for the school. License agreements in the past year netted $380,000, Sedam said.
He hopes that some day license agreements will fully fund the Research Center, making it one of only 20 or so in the country that are profitable.
"Over time, you have the possibility to generate significant return," he said, particularly if an idea catches on.
"You have to be lucky. If I could pick the winners, I'd be sitting on a tropical beach somewhere."
An idea with potential
Wakup now has offices in Manchester, a website (http://wakupinc.com) and is building a distribution network. The all-natural stimulant is applied like lipstick to help consumers stay alert when they're feeling drowsy, without side effects, according to the company website.
Jeff Rapson, Wakup's vice president of business development, said he already has agreements with some local convenience stores, including Bunny's Superette on Webster Street in Manchester.
"It's a simple idea with great potential," Sedam said.
The product was developed by UNH student Shaojun Yao for his doctoral dissertation. He entered the university's Innovation-to-Market competition last spring and won the poster contest. He was also a finalist in the Tech-Out competition for venture capital hosted by the N.H. High Technology Council and the Manchester-based abi Innovation Hub in the fall. Although he didn't win either of those competitions, he was encouraged and assisted by UNH in efforts to start Wakup Inc.
Rapson, a Manchester-based business consultant, reached out to Yao after reading an opinion piece in the Union Leader last May, in which freelance writer Fergus Cullen bemoaned the fact that Yao would likely have to leave the country within a year of graduating.
"Thanks to the United States's broken immigration system," he wrote, "Yao may end up taking his taxpayer-subsidized UNH doctorate back to China, open his business and create jobs there, and export his product back to the U.S. with the profits going overseas. He'd rather stay and do it all here."
"We connected through the article and became good friends," Rapson said. "I looked at his technology and thought we could do a lot with this."
WakUp is the second product launch to emerge from UNH research this year. Earlier in the year, staff members in the school's computing and instrumentation center developed technology for secure data erasure on hard drives. "It provides a way to erase hard drives so that they are absolutely erased and secure," Sedam said. "We found a local serial entrepreneur who was looking for the next great idea and it was a good fit."
The licensing agreement for "Obliterase" was signed in July.
The third startup in this academic year is expected in January, with the first licensing for a nonprofit endeavor. OperationHatTrick.org will manufacture and distribute headgear that masks head injuries, with proceeds going to help wounded veterans. "We're licensing the trademark to the organization and the logo that was created, and they are going to go off and start a nonprofit," Sedam said.
He stressed that the university does not sell its technology or intellectual property, but leases it to third parties through a license agreement that allows them to use what remains a UNH asset.
"It's a subtle difference but a difference nonetheless," he said. "We always avoid the use of the term 'sale' because it suggests that the university does not have control over the asset."
The agreement for Wakup is structured so that UNH gets a percentage of sales revenue in the form of royalties as the company grows, Rapson said.
Most of the UNH license agreements over the years have gone to enhance the operations of existing businesses, not to create new ventures. Sedam pointed out that 95 to 98 percent of all licensing by universities across the country is done with existing enterprises. UNH has agreed to 171 such licenses in its history, but so far has only contributed to the creation of six new companies.
The university's focus on real-life applications for its research is reflected in several other initiatives, including an Innovation Catalyst Seminar Series; workshops on small business research and technology transfer grants; and the Green Launching Pad, designed to help local startups bring green solutions to market.
Portsmouth-based Therma-Hexx, the N.H. High Tech Council's Product of the Year, was developed in partnership with the Green Lanching Pad. The company makes products for the construction industry that its owners say will revolutionize the way we heat and cool buildings.
Many competitors at the Product of the Year event in November cited the role of UNH and people like Sedam in helping them develop their new products.
Sedam, a member of the UNH Class of 1993, was hired two years ago, just when the new strategic plan was released. A biochemist, he's been a researcher in the private sector, has run startups, and directed the life sciences division at the University of North Carolina at Chapel Hill.
He was recently named co-chair of a national program designed to help teach universities around the country the best practices in handling university-based startups.
Some of the most successful university business incubators have been around since the 1960s or early 1970s, he said, which makes UNH "relatively late to the game," having launched the Office for Research Partnerships and Commercialization in 2000.
Although the university has some catching up to do, the renewed emphasis on business incubation is yielding impressive results, he said. "We are doing some great stuff, and you are going to see a lot of remarkable things coming out of the university."
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Dave Solomon may be reached at firstname.lastname@example.org.