The OTC and the Institute of Innovation and Entrepreneurship at UT Dallas (IIE) have combined their efforts to implement a new paradigm under which the University will operate its technology commercialization program, foster an atmosphere of innovation and entrepreneurship, and facilitate the launch of new enterprises.
Through the active collaboration and integrated efforts of OTC and IIE, UT Dallas faculty and students will be given assistance to commercialize select university-derived innovations through the formation of new companies, as appropriate.
Given the University’s strong focus on creating new companies and the need to proactively assist the launch and growth of these new startups, the UT Dallas Venture Development Center (VDC) was launched in 2011. The VDC is a state-of-the-art business incubator that houses startup companies that are based on UT Dallas technology. The 8200 square-foot facility, located adjacent to the UT Dallas campus, provides offices, lab space, central shared facilities and services to approximately 10-15 startup companies. VDC staff and the Advisory Board of experienced entrepreneurs and investors team with OTC staff and the faculty of the IIE to provide mentoring, accounting services, entrepreneurial education, showcase opportunities, and connectivity to investors and professional service providers.
University-based facilitation of startups is further made possible through “virtual” incubation processes assisted by the IIE MBA internship program, faculty mentors and the OTC/IIE Entrepreneurs in Residence program. This pro-active startup facilitation and virtual incubation initiative may include:
- commercial feasibility evaluation and market analysis
- individual mentoring by experienced entrepreneurs
- assistance in creating business plans and investor presentations
- business formation and organization
- investor/industrial outreach and match-making, e.g., North Texas RCIC (access to Emerging Technology Fund)
- connection to potential management resources (through Entrepreneurs in Residence Program)
- connection with external resources such as facilities and advisory assistance, e.g., North Texas Enterprise Center
- assistance with internal design/development resources, e.g., engineering
Considerations and Realities of New Company Formation
What is a UT Dallas startup?
A UT Dallas startup is simply a new business entity or “spinoff” formed to commercialize one or more university-derived inventions or intellectual properties. Formation of a startup business is an alternative commercialization approach to licensing the invention to an established company.
What are the realities of establishing a new business?
Starting a new company requires a substantial commitment and sacrifice of time and resources on the part of the founder(s). The reality is that the vast majority of new ventures fail, even when the technology at the foundation of the company appears to have significant commercial potential. The quality of the science or technology behind a startup is but one factor that may enable the success of the enterprise. The most important factor to the success of any new enterprise is ultimately the experience and capability of the management team and their execution intelligence.
Formation of a startup to commercialize a UT Dallas invention should follow careful and extensive consideration by the inventor(s). Several key factors will influence the success of a new venture, including the following:
- A proprietary (patentable) product or process that is both novel and significantly superior to competing products on the market.
- The cost and timeline to develop the product fully and bring it to market
- The cost to manufacture the product
- The ability of the technology to provide a platform for follow on product opportunities
- A favorable market environment (one that is ready for the product)
- Availability of investment capital from those who may enhance the success
- Complete commitment of the inventor(s) to the commercialization process
- Attracting a management team experienced in business (important to investors, as well)
- Access to facilities
It is essential that the entrepreneur take time to be educated in the entrepreneurial process and be willing to accept mentoring from experienced entrepreneurs. For a more comprehensive list of criteria to consider regarding evaluating a technology for startup potential, please see the Commercial Viability Assessment tool.
Am I, as UT Dallas faculty/staff member, permitted to start a company and remain at the university?
Yes, but you will be required to fulfill all university duties, commitments and responsibilities you have now and your time away from the university must comply with all university policies. Also, your involvement with a new enterprise will require management of the relevant conflict of interest issues, including with respect to graduate students, research and intellectual property ownership. For more information you should speak with the staff of the OTC and consult the conflict of interest policy under Polices and Guidelines.
Can I license from the university a technology that I invented while at UT Dallas for my company?
Yes. However, any invention created by you at UT Dallas would proceed through the licensing process as with any other company.
Will the OTC help me with my company by providing business advice and/or financing?
Prior to making a decision regarding the best approach for commercializing a UT Dallas invention, the OTC would seek input from the inventor to determine the recommended options. Should a startup be both desirable and feasible, OTC is able and willing to actively assist with launching a new business. Additionally, OTC provides resources for those interested in starting new enterprises—see Venture Development Resources.
What do I need to do in order to license a technology from UT Dallas?
Contact OTC to discuss your interest in licensing the invention. OTC, in consultation with the inventor, will weigh the commercialization options to determine if the most favorable commercialization approach is to license your company or an established company. Should UT Dallas agree that a startup be the licensee, then OTC can assist the process.
Can my new company apply for SBIR and STTR grants that will list UT Dallas as a subcontractor?
Yes. However, research funding received into your laboratory from a company in which you own financial interest creates a conflict situation that requires approval and oversight. This oversight would include an unrelated overseer to review both the research and finances of any project in your laboratory, which is supported by your company. To avoid additional conflict, you should not be the UT Dallas principal investigator on any project funded by your company.
Can I temporarily use my research laboratory for my company until the company gets on its feet? Will UT Dallas permit my startup to use UT Dallas
space or equipment?
No. You may be able to support or sponsor research on the technology at the university, as any outside company can sponsor. However, there are requirements for oversight of the research which must be discussed with the Conflict of Interest committee, in order to manage any possible conflict.
Will starting a company influence my ability to get tenure?
This would be the decision of the departmental chair, dean, and provost.
Do I need permission to set up a company?
No. However, if UT Dallas-derived technology needs to be licensed to the new startup, approval and a license from OTC are necessary, along with compliance with all UT Dallas policies including conflict of interest policies.
Can I consult for a company, or hold a board seat or a line management position with a new company?
Yes. However, disclosure of such involvements and compliance with all UT Dallas conflict of interest policies is mandatory. This is also usually permissible without consultation with the conflict of interest committee. It should be noted that some federal agencies mandate disclosure of consultancies for which compensation exceeds a specified threshold. Additionally, pursuant to the UT Dallas policy no more than 20 percent of one’s total professional effort may be directed to outside work during the academic year.
Am I able to receive equity in a new company?
Yes. Holding stock (or stock options) in the startup company is allowed. The investigator may receive stock as partial compensation for his/her role on the board of the company and/or as a founder of that company. The distribution of such equity will be determined by the investigator’s agreement with the startup itself. However, the inventor does not participate in the distribution of any equity received by UT Dallas through license agreements.
How may my students be involved in work for my new company?
Involving students and/or post-docs in UT Dallas research that would benefit the new company is considered a conflict. Involving students and/or post-docs more directly in the company (as employees or consultants) also raises conflict of interest issues. Consultation with the dean and/or the is generally required in order to ensure that the student’s/post-doc’s educational experience is not compromised.