President John A. Fry announced July 1 the launch of Drexel Ventures, an innovation fund, incubator and technology transfer within the University. The program will provide support for faculty, students and alumni to create new businesses while fostering economic growth and development in the Greater Philadelphia region.
“How do we take all the talent that we have here in Philadelphia, keep it here and allow it to function within an innovation ecosystem that produces new business, new jobs and creates a virtuous cycle? …We are trying to say to our Drexel students and our Drexel faculty, ‘If you’re someone with an idea that you would like to take to market, we will provide the infrastructure for you to do it,’” Fry said.
All ideas eligible for funding will go through market testing before Drexel Ventures decides whether to accept the idea.
“We’ll be very keenly focused on trying as part of the work that we do to keep these companies here; this is very important to us. Too much talent has fled the Greater Philadelphia region for Boston and San Francisco. It’s heartbreaking,” Fry said.
Drexel Ventures will be a mix of grants and seed investments. In certain cases, Drexel will have an equity stake in companies that emerge out of the accelerator program.
The return on any investments made through Drexel Ventures will be reinvested into the program’s source funds. The University has no financial goals for the program and will measure success by the amount of activity happening within the program.
A program similar to Drexel Ventures was started for the biomedical engineering program in December 2010 with a $10 million grant from the Coulter Foundation. Drexel matched the grant, which brought supporting funds for the program to around $20 million. This became a model for Drexel Ventures.
“What we’re hoping to do is based off the Coulter Foundation model, is to have a significant amount of money in that $10-20 million range identified for both endowment purposes — so we have the program running in perpetuity — but also for seed funds that we can allocate on a year-to-year basis,” Fry said.
The University is in the early stages of identifying what the funding sources will be for Drexel Ventures.
A new CEO and an advisory board of experts from the region will be recruited to manage the funds and projects of Drexel Ventures. The form of governance has not been completely established. Proposals will be made to Drexel trustees in September.
“There are only probably a handful of universities in the country who are beginning to take this full comprehensive look at to how to support innovation within their institution and within the region in which they are based. That’s what Drexel Ventures is all about, taking all of our assets and organizing them in a way that makes the whole greater than the sum of the parts,” Deborah Crawford, Drexel’s senior vice provost of research, said.
Stanford University, Georgia Institute of Technology and Massachusetts Institute of Technology are among the other universities that have programs similar to Drexel Ventures.
“What’s unique about us is the triangle between the school of entrepreneurship, the Innovation Neighborhood and Drexel Ventures. I haven’t seen any institution that is doing those three things. … We think we’re on to something in terms of trying to put together a different type of innovation ecosystem that really encourages not just faculty but students,” Fry said.
Right now a proof-of-concept competition is underway at the University. Over 30 proposals were received and narrowed down to 10 finalists. The ideas are being evaluated by a board of experts and investors who will select approximately five projects in which Drexel Ventures will invest between $50,000 and $100,000. The winners will be announced in mid- to late July.
Drexel Ventures was designed with three main objectives; the first is to increase investment and growth in sponsored research. Drexel currently has a sponsored research portfolio of $115-120 million, but Fry would like that amount to grow and give faculty and students the support to start new businesses. The second goal is to accelerate the commercialization of inventions made at Drexel. The last is to support the creation of new ventures growing out the first two objectives.
“We think there are gaps in our ecosystem, and what we’re trying to do is figure out how do we fill the gaps to the point where people can get to the point of early-stage commercial investors that we see in the region. … We felt that, in light of all the other things that we’re doing, [Drexel Ventures] is the one missing piece of our strategy for innovation here at Drexel,” Fry said. The overall goal for the University is to become an anchor for an innovation ecosystem in Philadelphia.
Drexel Ventures is one of five components to Drexel’s innovation ecosystem, which includes the Charles Close School of Entrepreneurship, the ExCITe Center, the establishment of the Office of Corporate Relations, and the Innovation Neighborhood.
The Close School, opening in the fall, will give students the opportunity to experiment with their entrepreneurial ideas. Entrepreneurship will be offered as a minor, and the Close School will eventually allow students to partner a major in entrepreneurship with another field of study at Drexel.
The ExCITe Center is the intersection between technology and the arts for faculty, students and entrepreneurs to create collaborative projects.
The Office of Corporate Relations will work to develop corporate relationships that can grow into longstanding and comprehensive partnerships with companies in the Philadelphia area pertaining to co-op, research, philanthropy and other endeavors.
“Drexel Ventures becomes the front door to the University, both inward and outward,” Keith Orris, senior vice president for corporate partnerships, said. This gives investors, entrepreneurs and businesses the ability to partner with Drexel for their research needs.
The Innovation Neighborhood consists of 6.5 million square feet from 30th to 34th streets and Chestnut Street to J.F.K. Boulevard. “Most of [this area] would be turned over to this innovation ecosystem on the theory that once these businesses get started, hopefully we are able to locate them nearby, physically in this innovation ecosystem idea,” Fry said.
The ExCITe Center will serve as the main incubator and launching pad for Drexel Ventures. Space at 3101 Market St. has the potential to be used for Drexel Ventures, as part of the College of Engineering will soon expand there.
To learn more about Drexel Ventures, email [email protected]