Universities: Your New Best Friend
For resource-hungry entrepreneurs, the explosion of university-based business-development programs comes as sweet relief in tight economic times. From Ann Arbor to Chapel Hill, find out what's out there for you -- and why colleges are in such a giving mood.
Published November 2002
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COMMENT ON THIS ARTICLEKathy Zelenock needed venture capital for her start-up, e-Cognita Technologies Inc., which makes transaction-management software for the mortgage industry. She found it at the University of Michigan.
When Darryl Brown came up with the idea of selling a coating and seasoning mix he created for chicken, pork, and seafood, he needed legal advice on setting up his new company, Tasty Delite International Ltd. He got it from the University of Chicago.
Howard Leventhal was thrilled to learn about a new technology that could help deter illegal copying of digital files. It was an obvious fit for his young company, BitzMart Inc., whose software helps sell video, music, and other media products over the Web. Leventhal licensed the technology from its developer, the University of Miami, and with the help of a company called Utek Corp., he didn't have to spend a dime of start-up capital to do so.
What's going on here? Universities a friend to business? What ever happened to all those tweed-jacket-and-blue-jean-garbed professors who liked nothing more than to thumb their noses at the money-grubbing business set? Sure, business schools have long had a habit of reaching out to companies, but that attitude hasn't necessarily been shared by the rest of academia. The cultural divide between those who like to theorize and those who like to do has always made it hard for college profs to become close collaborators with business execs, and vice versa.
Today that relationship is undergoing a fundamental change, as universities begin to understand just how much they stand to gain from closer ties to the business community, and companies realize just how rich the opportunities can be on college campuses. Among those who stand to gain the most from the glasnost are small entrepreneurial companies. Their work is often at the forefront of new industries and technologies, so it is often the most attractive to a university. And such businesses generally need the most help. "It's become OK for universities to work with the entrepreneurial community and not have that look like they're selling out," says Robert Sullivan, dean of the Kenan-Flagler Business School at the University of North Carolina at Chapel Hill. "They're not ashamed anymore. That's a huge change."
ACADEMIC-LEE: University of Kentucky president Lee T. Todd Jr. has put the school's resources at the disposal of company builders.
The exciting result: the desire to work with business partners has spread from the traditional B-school venue to schools of law, engineering, and medicine, spawning an intriguing array of new programs and resources. New matchmaking services are springing up to help connect private businesses with the right school or faculty member. And there are even new funding opportunities, such as vouchers, to help business executives take full advantage of what colleges have to offer.
"I'm seeing what I like to call the engagement of entrepreneurs with the university and the university acting more like an entrepreneurial enterprise, reaching out," says Ray Smilor, president of Beyster Institute, based in La Jolla, Calif., and a former business-school professor at the University of Texas at Austin. "For entrepreneurs outside the university, I think they're finding the university far more receptive to their coming in."
One way to capture the magnitude of the change is to look at the kind of people who are joining the academic world. Consider Lee T. Todd Jr., who has been president of the University of Kentucky for just over a year. In his previous life, Todd started, ran, and eventually sold two high-tech businesses based in the Bluegrass State: Projectron Inc., a projection cathode-ray tube maker, and software company DataBeam Corp. When he was a company owner, part of his goal was to create good jobs in Kentucky. Now he's trying to do the same thing as president of the state's largest public university, in effect redefining its mission.
As Todd sees it, the university has a responsibility to drive economic development, especially at a time when traditional manufacturing jobs are disappearing or moving overseas. So Todd is taking steps big and small to encourage company building in Kentucky. They include beefing up the university's research capabilities, not just to boost the school's academic stature but to fuel a future generation of high-tech start-ups as well. The university is expanding its existing technology research park and is aiming to help the city of Lexington turn an old Woolworth's building into an incubator. For the first time, the school has put part of its endowment into venture-capital funds, investing $3 million in two regionally oriented funds. With a $2-million alumni gift, the business school is setting up an entrepreneurship center. Todd himself is advising the newly formed campus E-club, composed of would-be entrepreneurs among students and faculty.
