Tag Archives: venture capital

gemaker

Sowing the seeds of technology transfer

Originally I trained as a chemist, but recently I’ve been thinking about the commercialisation of research outcomes – our area of expertise at gemaker – in botanical terms. At the risk of sounding like hippie Neil from ‘The Young Ones’, I’ll explain by asking you to consider the timeless wonder of a seed…

The seed represents a new idea, resulting from years of work by researchers in a university or similar institution. Given the right conditions, the seed will grow into an entirely new variety of plant. The innovative ideas of researchers have the potential to improve our lives in myriad ways, so the metaphorical plant could be a new source of food or medicine, or it might produce an exquisite perfume, or superior wood.

Having created a seed with wonderful potential the researcher needs someone like a farmer, to sow the seed and grow it, producing a bumper harvest. In other words, the researcher needs an industry client.

Like a farmer, the industry client has customers to please, and if customers want crisper apples, the farmer won’t waste time and money cultivating redder roses. The wisest researchers engage with industry clients to learn about market problems and demands before commencing R&D, then create seeds to meet needs.

To reach the targeted market, innovations need funding like plants need water – and more than just a drip feed. Without adequate funding for pest control (IP protection), viable mutations (prototyping), taste testing (beta testing) the researcher’s seed will never grow to fruition. It may look like a plant that’s been sitting at the supermarket for weeks losing value as it dries up and dies.

How do customers like them apples?

With funding, innovators can prove their concept: how do customers like them apples? Beta testing delivers feedback to guide product or service refinements before market entry, as well as creating an opportunity to acquire valuable early-adopter testimonials for marketing purposes.

To grow tall, new products and services need the sunlight of strategic marketing to shine on them. In the energising glow of a strong campaign, online and in traditional media, the innovation will thrive. With effective marketing, yields are maximised; without it, even the greatest innovations shrivel and die.

We do our best to help innovators achieve their optimal commercial outcome, whether this is a spin-off from a research organisation, growing sales of the product or service, licensing agreements, or sale of a business. Like anything worthwhile, the commercialisation process takes time. Few innovators achieve ‘overnight’ success, but it’s possible: you can produce strawberries in just two months. If you plant an apple tree, it takes six to ten years to bear fruit.

Like farming, commercialisation is challenging, and we all depend on it being done well. Better research-industry engagement, enhanced professionalism in technology transfer, supportive government policies and improved funding strategies will all help to turn more of our researchers’ discoveries into new Australian industries, achieving a better future for us all. To quote the wisdom of Neil: ‘This self-sufficiency thing really is amazing.’

How does gemaker help?

Gemaker helps researchers to:

• Match their research to commercial applications
• Find industry partners
• Source consistent commercialisation funding
• Identify how to best protect their intellectual property, and
• Sell their wonderful seeds so they can grow to fruition for everyone’s benefit

We keep an eye on the sky (we study global market trends and government policy changes), searching for rainclouds (grants and other sources of funding) that could hydrate seedlings (spin offs and startups). If necessary, we’ll dig an irrigation channel and perform a rain-dance (to attract angel investors or venture capitalists).

– Natalie Chapman

founders

Founders fuelled by STEM

As a full time angel investor and venture capital investor I spend a considerable amount of my time meeting with founders from all walks of life. Ten years back that group would have largely consisted of a few random, risk-taking entrepreneurs and a bunch of computer science grads punching out code. My, how times have changed.

In this current “Innovation Era” it seems the whole world is seeking to get digital and disrupt something. The backgrounds, skills and mindsets in the startup scene are now far more diverse… and what a huge asset that is to the local ecosystem and future of innovation in Australia.

Most comforting to me over the past few years has been the increasing number of founders I’ve encountered from some formal STEM background that’s not just computer science, and how they are putting their ideas to the test. Diversity of thinking, ideas and actions seems to be the DNA of a healthy ecosystem. If we are to create a vibrant, sustainable innovation ecosystem in Australia then we must promote this sort of risk taking through academia and into commercialisation programs.

On a recent tour of Silicon Valley with the current cohort of the muru D accelerator program from Sydney, I had the pleasure of spending time with the founders of astro-educational startup Quberider and underwater inspections company Abyss Solutions.


“It was a pleasure to see these young STEM professionals stand up, pitch and impress some of the world’s most experienced startup investors with their passion and ideas that have true global application.”


Solange Cunin launched Quberider while still studying a Bachelor of Science and Engineering at UNSW, majoring in aerospace, aeronautical and astronautical engineering. Quberider’s director Sebastian Chaoui is undertaking a Bachelor of Engineering and Mechatronics at UTS, majoring in robotics and automation engineering. Abyss Solutions founder Masood Naqshbandi has a Masters in Materials Chemistry and Photonics from the University of Sydney. His highly qualified team hold a number of PhDs and masters degrees between them.

It was a pleasure to see these young STEM founders stand up, pitch and impress some of the world’s most experienced startup investors with their passion and ideas that have true global application. Their diverse skills, intimate knowledge of their subject matter and practical “can-do” attitudes put them in great stead to impress. So did the experiences they shared visiting one of the leading hubs of global startups and innovation.

If we are to create a truly innovative society in Australia that can help make the world a better place, then we need to foster entrepreneurialism among the excellent talent from our leading universities. Support from corporate incubators and accelerators to share business acumen will further accelerate their success. Supportive global capital will surely follow.

Andrew Coppin

Director, Bardama Startup Fund, Affirmative Investments and Timezone Group International

Read next: Attila BrungsVice-Chancellor and President of UTS, sheds light on how we can equip new generations of graduates with the right skills to compete in a changing global market.

People and careers: Meet graduates and postgraduates who’ve paved brilliant, cross-disciplinary careers here, find further success stories here and explore your own career options at postgradfutures.com

Spread the word: Help to grow Australia’s graduate knowhow! Share this piece using the social media buttons below.

Be part of the conversation: Share your ideas on creating and propelling top Australian graduates. We’d love to hear from you!

More Thought Leaders: Click here to go back to the Thought Leadership Series homepage, or start reading the Australian Innovation Thought Leadership Series here.

investing in small business

Investing in small business

Featured image above: Charles W. Wessner is a distinguished scholar and research professor in Global Innovation Policy at Georgetown University, and director of the Technology, Innovation and Entrepreneurship program at the National Academies.

Innovation is recognised as a key to growing and maintaining a country’s competitive position in the global economy. Australian scientists produce top-quality research and punch above their weight in terms of peer-reviewed publications; however, Australia is much less successful in creating innovative products and processes based on research investment. If we want more innovation, university and government policies need to change.

Part of this change requires learning from the successes of other nations. Successful policy changes include increased support for universities and research centres, growing funding for competitively awarded applied research, sustained support for small businesses, and a focus on partnerships among government, industry and universities in bringing research ideas to market.

The USA is the land of free-market capitalism, but it is also an active entrepreneurial state. A highly effective US government initiative, for example, is the Small Business Innovation Research (SBIR) program, which has been in existence for 25 years and was recently renewed by Congress.

Instrumental in this renewal was an assessment by the National Academy of Sciences, which found the SBIR program “sound in concept and effective in operation”.

The program provides highly competitive, phased innovation awards to small businesses and start-ups to develop products that meet agency mission objectives or provide social value. The awards range from US$150,000 to more than US$1 million. The grants are often linked to the procurement process, for example in the case of military acquisition and support. In other fields, such as health and energy, grants provide a means to push good ideas to market.

SBIR has a strong track record. In recent years, it garnered 20–25% of the top 100 R&D awards for the US economy as a whole, and helped agencies like NASA address specific needs such as instruments for exploring Mars. SBIR doesn’t replace venture capital, but rather augments it by de-risking ideas to the point where private investors can step forward. Reflecting its success in the USA, SBIR has been adopted by a number of other countries.

While SBIR is a success, it is not a panacea. Effective innovation policy is multidimensional, and a supportive policy framework that encourages universities to commercialise new products and processes is required. Policies that facilitate start-ups and encourage small to medium-sized businesses are also needed.

Governments need to invest in places where researchers and companies can meet, learn, cooperate and grow. For example, science and technology parks near universities, incubators, accelerator programs, and innovation awards that facilitate collaboration.

Adopting pro-innovation policies does not guarantee instant success – but not adopting them guarantees long-term stagnation.

– Charles W. Wessner

spin-off start-ups

Top 25 insights: spin-off start-ups

Seven leaders of the Top 25 Science Meets Business R&D spin-off companies answer the question: What insights can you share with other R&D spin-off start-ups in Australia?


CATAPULT GROUP INTERNATIONAL LTD

Fill a market need and lead that market; don’t fill a product gap and complicate your market with a technology push.

It doesn’t matter how technical your product or service is, it needs to be easily explained and have a story that resonates for it to be successful in any market, let alone overseas markets.

Shaun_intext

– Shaun Holthouse, Chief Executive Officer


SMARTCAP TECHNOLOGIES PTY LTD

A few words of wisdom.

1. Make sure there is a viable, readily accessible market that is sufficiently large to support a spin-off company.

2. The actual invention is only the trigger to start a company – you are establishing a company that will need to innovate on an ongoing basis if it wants to be successful. Make sure that innovation capability and desire exists and thrives in the spin-off.

3. Identify competent board and management capability to direct the business and generate revenue for the company. Most often the management capability is not the same people who carried out the research, but sometimes it can be. Without the right people running the show, the spin-off will not be successful. 

4. Make sure you have sufficient funding available to get the company through to a viable revenue stream, and ideally flexible funding arrangements. Unexpected things will happen and you need capability to accommodate those changes.

– Kevin Greenwood, Chief Operating Officer


PHARMAXIS LTD

“Most start-ups are focused on development plans that contain binary events and marginal financing. This makes them vulnerable to unforeseen delays and additional development steps that require additional funding.

I believe that we should be looking to generate portfolios of innovation under experienced management teams that give our projects the best chance of success – and adequate funding to reach proof of concept in whatever market we are targeting – but at the same time help to spread risk.

venture capital

– Gary J Phillips, Chief Executive Officer


ACRUX DDS PTY LTD

“Ensuring a strong board, CEO, and a quality management team will be critical to success. The availability of funds for programs is an often-discussed barrier to rapid progress. Underfunded companies and poorly thought-out product concepts or technologies are more likely to fail early.

Michael Kotsanis_intext

– Michael Kotsanis, Chief Executive Officer


SPINIFEX PHARAMCEUTICALS PTY LTD

“1. For biotechnology R&D spin-off start-ups in Australia, major hurdles are the dearth of seed capital as well as access to large follow-on venture funds that are needed to build successful biotechnology companies.

2. There is a mismatch between the 10-year life span of a venture capital fund in Australia and the 15+ years needed to translate research findings into a novel drug or biologic product for improving human health. 

3. Hence, these systemic issues are major impediments to building successful biotechnology companies in Australia and these issues need to be addressed.”

– Professor Maree Smith, Executive Director of the Centre for Integrated Preclinical Drug Development and Head of the Pain Research Group at The University of Queensland


ADMEDUS

Start-up companies may consider moving overseas, especially if the Government stops or reduces the R&D tax rebates and doesn’t establish some innovation stimulus packages.

venture capital

– Dr Julian Chick, Chief Operating Officer


REDFLOW

Nothing ever goes 100% smoothly – perseverance is a prerequisite.

Stuart Smith_intext

– Stuart Smith, Chief Executive Officer

Click here to see the full list of Top 25 Science Meets Business R&D spin-off companies, or for further insights from the Top 25 leaders, read their interviews on attracting venture capital, learning from overseas marketsgetting past the valley of death and overcoming major start-up challenges.

valley of death

Top 25 insights: valley of death

There are two potential ‘valleys of death’ for R&D spin-off companies. One is in translating their research concepts into prototype products. The other is in maturing from prototype to full commercialisation.

Here, leaders of the Top 25 Science Meets Business R&D spin-off companies answer the question: Which valley of death was most difficult for your company, and what was key to getting over the hurdle?


ADMEDUS

Taking the prototype through to full commercialisation was probably more difficult for us due to the complexities involved.

This included high-tech scale-up manufacturing, which we do at our bio-manufacturing facility in Malaga. Today, we have the ability to expand production as necessary, as well as refine and develop our processes in-house to accommodate new products and product improvements.

There was also a focus on generating sales once CardioCel was commercialised. Just because a product is approved doesn’t necessarily mean that it will be used straight away by the intended customers.

We’ve focused on educating the market about the benefits of CardioCel, such as its biocompatibility and lack of calcification (hardening) at the site of surgery. We’ve also built a strong global sales and marketing team who work closely with our customers to understand their needs.

As a result, we’ve seen continued quarter-on-quarter growth in CardioCel sales, and the product is now used in over 135 heart centres globally.

venture capital

– Dr Julian Chick, Chief Operating Officer


PHARMAXIS LTD

“For pharmaceuticals the so called ‘second valley of death’ is by far the most significant.

Lack of funding often prevents companies from attempting to cross this valley and causes them to license their technology at an earlier stage and to realise rewards as the licensor takes their innovation to market.

For a small company with limited resources, the key to success here is to understand the commercialisation risks, link the higher-risk projects with partners and try to make that step themselves for markets with lower entry costs and higher clinical need.

If done well, they should end up with a portfolio approach with the risks mitigated but still significant opportunity for value appreciation.”

venture capital

– Gary J Phillips, Chief Executive Officer


SMARTCAP TECHNOLOGIES PTY LTD

SmartCap Technologies had substantial industry support to develop the prototype products, however even with this it was a very challenging process to deliver working prototypes. 

SmartCap was exceedingly fortunate in that CRCMining provided substantially more financial support for SmartCap than originally envisaged, enabling it to finally deploy the prototype products. Those prototypes were sufficiently effective to generate commercial interest from some large mining companies.

So despite having robust plans in place, it always helps to have access to further funding, via investors or other stakeholders with a high level of commitment as well as deep pockets, to overcome unforeseen eventualities.”

– Kevin Greenwood, Chief Operating Officer


CATAPULT GROUP INTERNATIONAL LTD

“The biggest hurdle may be the combination of the two – translating research concepts (i.e. technical information associated with the technology) following commercialisation into an immature market.

Catapult‘s technology is not a consumer product and therefore is very high touch in terms of its service and client support. Due to the perceived complexity of the information obtained from the technology, part of the trick is to simplify the underlying research concepts to new markets that need a low touch product.”

Shaun_intext

– Shaun Holthouse, Chief Executive Officer


iCETANA PTY LTD

“I would argue that you should have a prototype – before any spin-off. That way you can at least prove technical viability of your concept. Ideally you would also have done some level of customer validation.

The next step of full commercialisation is definitely the hardest.

In our case it was a matter of finding early customers that were willing to spend time assessing the product and its benefits – even though it was too early to commit to a purchase and full roll-out. This phase was key to understanding the market and adjusting our path.”

– Gary Pennefather, Chief Executive Officer


ACRUX DDS PTY LTD

“The first phase is the most difficult – a poor prototype will show its deficiencies later in development. A prototype needs to demonstrate a safe and efficacious profile, and that it will meet the need you have defined in the target market.”

Michael Kotsanis_intext

– Michael Kotsanis, Chief Executive Officer


SPINIFEX PHARAMCEUTICALS PTY LTD

“Translating research concepts into clinical proof-of-concept [was the most difficult] due to the dearth of venture capital available in Australia at that time.”

– Professor Maree Smith, Executive Director of the Centre for Integrated Preclinical Drug Development and Head of the Pain Research Group at The University of Queensland


ENGENEIC LTD

“We are in the middle of our valley of death translating our platform into the clinic and we have not yet overcome it. Data is key, but one needs the funds to produce the results! So, we are seeking investors wherever we can find them and buddying up to big pharmaceuticals who have the muscle to progress our technology.”

HimanshuandJennifer_intext

– Dr Jennifer Macdiarmid, pictured above with Dr. Himanshu Brahmbhatt, joint Chief Executive Officers and Directors 


REDFLOW LIMITED

“Both were as difficult – but they had different hurdles. Key for both was having the right staff and people to address each hurdle.”

Stuart Smith_intext

– Stuart Smith, Chief Executive Officer


Click here to see the full list of Top 25 Science Meets Business R&D spin-off companies.

Top 25 insights: venture capital

Top 25 insights: venture capital

All research and development (R&D) spin-offs have significant risk attached to their commercialisation, but some cannot overcome the negative perception of that risk to attract the necessary capital.

Here, nine of the Top 25 Science meets Business R&D spin-off companies explain what it was about their product or business strategy that inspired confidence in their investors that theirs would be a viable business venture. 


ACRUX DDS PTY LTD

“An excellent intellectual property position is a key starting point. This is in addition to having a proven concept or great technology. A quality team to back up project execution is paramount. Understanding and being able to explain where your commercialised projects will fit into a market segment in terms of the need they will meet is also important.”

Michael Kotsanis_intext

– Michael Kotsanis, Chief Executive Officer


SMARTCAP TECHNOLOGIES PTY LTD

SmartCap Technologies is a spinoff from CRCMining. CRCMining carries out industry directed research, which ensured that the research into fatigue management technologies was a high priority for the mining industry at the project’s inception.

In SmartCap’s case, the industry support was sufficiently high that Anglo American, one of the world’s largest mining companies, in conjunction with CRCMining, co-funded the development of the prototype commercial SmartCap products.

This ‘incubation’ of the SmartCap technology by a significant end user was extremely important to advancing from research into prototype products. 

The prototype products performed sufficiently well for SmartCap to be selected by two other large mining companies for large supply contracts for fatigue monitoring technology.

So the support of significant end users, along with the commercial contracts the company had in place at that time, provided potential investors with the confidence to invest in SmartCap Technologies.”

– Kevin Greenwood, Chief Operating Officer


PHARMAXIS LTD

Pharmaxis has been restructured following a regulatory setback for our lead product. Rebuilding investor confidence has been critical to our longer term success. To do this we focused on three things:

1. transparency – explaining the business model and being clear about the risks as well as the opportunity;

2. building in meaningful milestones which marked development steps that significantly reduced risk and provided opportunities to realise value;

3. hitting milestones and delivering realistic objectives.”

venture capital

– Gary J Phillips, Chief Executive Officer


ADMEDUS

“I think there are a number of reasons investors are drawn to our business: Admedus has two technology platforms which diversifies the risk for investors; we have a product on market; and we are generating revenue.

The first of the two platforms is our regenerative tissue platform, where we use our proprietary ADAPT tissue engineering process to turn xenograft tissue into collagen bio-scaffolds for soft tissue repair. The second is our Immunotherapies platform, where we work with renowned scientist Professor Ian Frazer and his team to develop therapeutic vaccines for the treatment and prevention of infectious diseases and cancers.

Our lead regenerative tissue product CardioCel, which is used to repair and reconstruct congenital heart deformities and more complex heart defects, has made the journey from prototype to commercial product and is on the market in the USA, Europe and parts of Asia.

Frazer’s previous success with the human papillomavirus vaccine (HPV) program that lead to the USD$2 billion product, Gardasil, is well-recognised and gives investors further confidence in our immunotherapy work.

As a result, Admedus has a good balance of validated science via approved products and an exciting product pipeline working with successful scientists. This balance, along with our diversified program portfolio, gives investors confidence in our business. “

venture capital

– Dr Julian Chick, Chief Operating Officer


REDFLOW

“1. Marketing Potential

2. Uniqueness of the product

3. Difficult to replicate”

Stuart Smith_intext

– Stuart Smith, Chief Executive Officer


CATAPULT GROUP INTERNATIONAL LTD

Catapult‘s initial funding came from the Australian Institute of Sport (AIS), the birthplace of the project that led to the commercialisation of Catapult, and the Australian government

Because the technology was engineered to take elite athlete monitoring from the laboratory to the field, value was seen in the data immediately as there was no precedent for this type of information. A new product category had been formed and Australian Olympians were now able to train in their performance sweet spot without getting injured because their coaches had objective data to guide their lead up to big events.

So this combination of pioneering a new industry in a popular space (elite sport), with the ability to create immediate value, certainly helped with the initial funding.”

Shaun_intext

– Shaun Holthouse, Chief Executive Officer


SPINIFEX PHARAMCEUTICALS PTY LTD

“Neuropathic pain is a large unmet medical need because the currently available drug treatments either lack efficacy and/or have dose-limiting side-effects.

Due to this, my patent-protected angiotensin II type 2 (AT2) receptor antagonist technology – encompassing a potentially first-in-class novel analgesic for the treatment of often intractable neuropathic pain conditions – attracted initial seed capital investment from the Symbiosis Group, GBS Ventures and Uniseed Pty Ltd. In total $3.25M was raised and in mid-2005 the spin-out company, Spinifex Pharmaceuticals was formed by UniQuest Pty Ltd, the main commercialisation company of The University of Queensland.

The raison d’etre for Spinifex Pharmaceuticals at that time was to develop AT2 receptor antagonists as efficacious, well-tolerated first-in-class novel analgesics for relief of neuropathic pain. 

In 2006, I discovered that AT2 receptor antagonists also alleviated chronic inflammatory pain in a rat model. This was quite unexpected as clinically available drug treatments for neuropathic pain, such as tricyclic antidepressants and newer work-alikes as well as gabapentin and pregabalin, do not alleviate chronic inflammatory pain conditions such as osteoarthritis. Thus the potential for small molecule AT2 receptor antagonists to alleviate chronic inflammatory pain conditions was patent protected by UniQuest Pty Ltd in 2006 and subsequently in-licensed to Spinifex Pharmaceuticals for commercialisation. 

As both neuropathic pain and chronic inflammatory pain are large unmet medical needs, Spinifex Pharmaceuticals was able to raise additional venture capital from the initial investors as well as from Brandon Capital to fund Investigational New Drug (IND)-enabling Good Laboratory Practice (GLP) toxicology and safety pharmacology studies, as well as early phase human clinical trials. “

– Professor Maree Smith, Executive Director of the Centre for Integrated Preclinical Drug Development and Head of the Pain Research Group at The University of Queensland


iCETANA

“A different technique or approach to tackling a large and growing global market opportunity.”

– Gary Pennefather, Chief Executive Officer


ENGENEIC LTD

“Investors understood that the intellectual property would be generated in-house and there was no “stacking” from the beginning.

We were fortunate at the outset to meet two venture capitalists and a number of high net worth individuals who saw the potential upside in our business plan, had already had some success with investing in biotech – e.g. Biota – and did not ask ‘who else is in?’.  

That being said, we had very limited time and money to show proof of concept, and only after that and our first patent, did we convince those investors that we had something viable.”

HimanshuandJennifer_intext

– Dr Jennifer Macdiarmid, pictured above with Dr. Himanshu Brahmbhatt, joint Chief Executive Officers and Directors 


Click here to see the full list of Top 25 Science meets Business R&D spin-off companies.