In a twist on the University’s usual role of selling its technology to outside companies, ASU plans to raise $5 million to create its own technological companies.

The Impact Accelerator program will use private donations to create and support five companies within ASU. The program will operate under the umbrella of the Biodesign Institute and Arizona Technology Enterprises, ASU’s intellectual property-management team, operated by the ASU Foundation.

Neal Woodbury, the Institute’s deputy director, said the project is currently in the reviewing stage and will choose the five companies as well as a board of directors to lead the project by the end of the year.

Approved by the Arizona Board of Regents on Aug. 6, the project is the brainchild of Alan Nelson, the executive director at the Biodesign Institute, Woodbury said. Nelson could not be reached for comment.

The idea behind the project is to eliminate the risk start-up companies face because they lack money and support, Woodbury said.

“The plan is to incubate the companies within the University,” Woodbury said. “With this method, the companies will be able to take more risks in the beginning without having to put out more money. Hopefully, [the companies] will be able to move faster than they otherwise could.”

ASU’s business plan for the 2010 to 2011 school year describes the project as a “significant deviation” from the University’s usual role of developing, patenting and selling its own technology.

By eliminating the typical risk in a company’s early days, the five companies will be much more attractive to outside investors when it comes time for them to be sold, Woodbury said.

According to the business plan for the Impact Accelerator, the University hopes to garner $10 million from each company when it is sold to or acquired by an outside business.

Woodbury said he hopes the companies will allow ASU to have a positive impact in the community.

“This is a powerful approach to translating these great ideas out into something that is tangible that the community can use in a shorter amount of time than if the company tried to start up on its own,” he said.

Charlie Lewis, the vice president of venture development at Arizona Technology Enterprises, said the project will help these companies avoid what experts call the “Valley of Death.”

“A good company is launched and they have good technology, but in the beginning they’re floundering because they can’t use capital,” Lewis said.

They aren’t able to get past the idea stage of the project, he added.
Lewis said he hopes the companies will also offer opportunities for students to do internships and market research.

Andrew Clark, a history senior and president of Associated Students of ASU West campus (ASASUW), said internships offered by the program would be beneficial for students.

“For a student involved in marketing or business, these internships sound like an awesome opportunity,” Clark said.

But while the project sounds like a worthwhile one, Clark said he wonders if the University might be setting its ambitions too high.

“If they can get it to work, it sounds like a great idea,” he said.
“I think it’s going to be difficult given their high aspirations for selling the companies at $10 million each,” Clark added.

Reach the reporter at allison.gatlin@asu.edu.