In its third year, IURTC?s Spin Up program hitting its stride
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INDIANAPOLIS -- Scrawled in capital letters atop a whiteboard in Joe Trebley’s office is a phrase that describes the Indiana University Research and Technology Corp.’s Spin Up program three years after it began launching entrepreneurial dreams in July 2011: “LESS BUT BETTER.”
The story behind it is a two-parter. The first involves a mid-2012 strategy shift after a first-year learning curve. The second transpired this summer -- around the time of Spin Up’s third anniversary -- when five of its companies landed Phase I Small Business Technology Transfer grants from the National Institutes of Health in rapid succession.
That vaulted Spin Up past a milestone of $2 million raised for its budding businesses. The surge accounted for more than 75 percent of the funds Spin Up had raised to that point.
But that is just the start of what Spin Up aims for next.
“Initially we took all comers,” said Trebley, who directs the Spin Up program.
“Now we’re reaping the fruits of our labor. The cool thing is that now, after landing these smaller Phase I grants, each company gets to go after $750,000 to $1.5 million Phase II grants. If we get just one or two of those Phase II awards, that’s more than double what Spin Up has raised to date. So each of these ventures are snowballing into more and more opportunity.”
Run by the IURTC, Spin Up is a nonprofit business accelerator focused on tech-driven industries -- specifically biotechnology, engineering, health care information technology, life sciences and medical devices. Spin Up has many objectives, but its main mission is to bring promising technologies to market by helping IU researchers start their own companies.
So far, 24 Spin Up companies have been founded. Of those, seven have generated nearly $2.34 million in federal grants, matching grants, national awards and venture competition prize money, with more than 25 percent of those funds going back to IU directly. Such awards allow these companies to explore potential solutions to some of medicine’s most difficult challenges:
- Anagin (2013), founded by Dr. Anantha Shekhar and Yvonne Lai to develop a treatment for post-traumatic stress disorder that avoids harmful side effects, $767,706.
- Emphymab Biotech (2011), directed by Brian Johnstone, Dr. Irina Petrache and Matthias Clauss to treat emphysema and chronic obstructive pulmonary disease, $436,473.
- YC Bioelectric (2012), founded by Hiroki Yokota and Stanley Yung-Ping Chien to develop a faster, more accurate and less costly way to perform the Western blot lab technique, which is used to detect and analyze protein samples, $357,787.
- Arrhythmotech (2012), co-founded by Dr. Peng-Sheng Chen and Shein-Fong Lin to develop a non-invasive technology to monitor both sympathetic nerve activity and electrocardiogram signals, $262,634.
- Refer2Input (2013), founded by Ken Yoshida to monitor bioelectric signals from various areas of the body in a single, universal unit, $260,581.
- EmotEd LLC (2012), founded by Dawn Neumann to develop a therapeutic video game to treat emotional deficits stemming from traumatic brain injury, $244,575.
- Sophia Therapeutics (2011), co-founded by Rajesh Khanna to treat neuropathic pain, $10,000.
Additionally, Spin Up has created 30 new entrepreneurs among university faculty -- a total that includes seven women.
“I’m particularly proud of that fact, as our real objective is giving people who were not doing this before the opportunity to do it now,” Trebley said. “That’s how you really create cultural traction.
“We want as many hungry people as possible and we look for two things. One is talented people. The second is whether the researcher is trying to solve a real problem. And we have some of the world’s most talented people on the planet here at IU who are trying to solve some of the world’s most complex problems.”
How Spin Up spun up
Like the aspiring entrepreneurs they work with, Trebley and Spin Up associate Polina Feldman both hold doctoral degrees.
Trebley earned his from Purdue University in 2006, specializing in bioorganic and medicinal chemistry. Before joining IURTC to launch Spin Up in 2011, he worked as a technology manager and senior project manager for the Purdue Research Foundation. He also served as a principle for In-Vivo Ventures, a venture capital firm, and as vice president of research and development at Kylin Therapeutics, a biotech company focused on RNA nanoparticle technology.
“I was more interested in the intersection of business and science than the research side of medicinal chemistry or molecular pharmacology,” Trebley said. “So I looked to partner with people who could teach me the business side of things, how venture capital works and things of that nature.”
Feldman, who earned her doctorate in neuroscience from IU in 2013, was introduced to the Spin Up program through a two-month technology transfer course at IURTC. Through a variety of expanding tasks, her role at IURTC evolved from intern to part-time to full-time work.
Her duties include managing programs, raising funds, submitting grant proposals, writing commercialization plans, managing companies that are funded and putting together executive summaries for investors. An aspiring entrepreneur herself, Feldman is pursuing an MBA in finance and entrepreneurship at IU.
“Coming from research, I wanted to know how technologies get transferred from an idea or a research project to something that’s commercially viable,” she said. “The whole aspect of commercializing a therapy is just as important as the discovery. That side of it, working with both researchers and service providers, is something I enjoy and having a Ph.D allows you to have conversations with both sides.”
Trebley views his role as more of a coordinator who pairs Spin Up entrepreneurs with the proper services and contacts to help mature and expand their business so it eventually becomes self-sustaining.
“I’m an adviser and cheerleader,” he said. “And I try to walk a fine line between setting expectations and providing needed encouragement. There will be some who fail, but that’s OK. We see plenty of success as well.”
Spin Up is modeled after a similar program called UPstart at the University of Pennsylvania’s Penn Center for Innovation. Both make it as easy as possible for researchers to launch a company by having the program provide support for the early administrative functions, Trebley said.
While faculty members focus on the research that drives their business, Spin Up works with mostly local service firms that provide everything a news business might need, including insurance, payroll and grant consulting, Trebley said.
“We call it the ‘easier’ button. Not the ‘easy’ button like you used to see in those TV commercials, but ‘easier,’” Trebley said. “What we do as a group is produce a ready-made business. Think of it as a shovel-ready plan.”
To fuel the plan, seed funding is raised through avenues that include federal grants, the IURTC-administered Innovate Indiana Fund, angel investors, crowdfunding, business competitions and support from such organizations as Elevate Ventures and BioCrossroads.
Two of Spin Up’s first companies, Emphymab Biotech and Sophia Therapeutics, exemplified such activity.
Along with its Phase I NIH grant -- and with help from Spin Up’s staff -- Emphymab founder Dr. Irina Petrache won a $200,000 Harrington Innovator-Scholar Award for 2014 from Cleveland’s Harrington Discovery Institute, a $10,000 pre-venture award from BioCrossroads in 2013 and a $60,000 grand prize at the 2013 Innovation Showcase. In 2012, Sophia Therapeutics won the BioCrossroads’ pre-venture competition as well.
BioCrossroads is a public-private collaboration that supports new life-science businesses in Indiana, while the Innovation Showcase is the state’s largest annual expo for fundable startups. Elevate Ventures is a nonprofit organization that provides state dollars to promising, early stage entrepreneurs who have received funding through small business grants.
“So far, most of our funding has come from NIH, competitions like these and Elevate Ventures,” Trebley said. “Now we’re looking to expand to sources such as the National Science Foundation, Department of Defense and Department of Agriculture. These agencies validate the work, not just for us but for follow-on talent. They see this being deemed worthy by their peers.”
Throughout the process, Spin Up founders are introduced to entrepreneurs, as well as IU alumni and other parties who support IU technology. The program also trains Spin Up Fellows -- newly minted Ph.Ds and postdoctoral researchers who are paired with a Spin Up company.
Within these companies, Spin Up Fellows are paired with more experienced managers, who serve as mentors.
“We’re looking for a ‘last founder,’’’ Trebley said. “A last founder is someone with executive experience with a track record for raising capital and managing early-stage companies. We want someone who can take what a Spin Up company has done so far and push it to the next level.”
Once Spin Up companies achieve sufficient funding, they can take up residence at incubator space that includes office and dedicated wet lab space. At present, Spin Up has five companies using incubator space that adjoins IURTC’s downtown Indianapolis location.
Changing a culture
One recent example of Spin Up’s handiwork is the role it played in pairing EmotEd with Broad Ripple-based DeveloperTown to develop a working model of a therapeutic video game to treat disorders that stem from alexithymia, or difficulties in recognizing emotion.
The partnership was made possible when EmotEd, with Spin Up’s help, won a $194,575 Phase I Small Business Technology Transfer award from the NIH in June. That helped fund a “wireframe” version of EmotEd’s Emotion Builder platform to show potential investors.
As a rehabilitation research scientist, EmotEd founder Dawn Neumann describes her software development skills as “pretty limited.” When it came to starting a business, the words “intimidating” and “overwhelming” came to mind -- until Neumann met with IURTC technology managers about her idea three years ago.
“I never fathomed that I would own a company,” she said. “But as my business partners, the Spin Up program takes care of all the formalities of being a business, from its inception as an LLC to developing a business model and commercialization plan.
“They handle accounting, seek investors, make the right networking connections and gain exposure to the right people. Without the help of Joe and Polina -- and the IURTC -- I wouldn’t be a business owner and none of this would be possible.”
Neumann represents one of the two faculty groups who have predominantly participated in Spin Up so far, Trebley said. She is among young faculty members -- many of them assistant professors -- who are eager to try new ideas. Then there are senior faculty, such as Anagin co-founder Dr. Anantha Shekhar, who have reached nearly every milestone their field can offer and want to walk a different path.
Capitalism offers its own allure as well. Yet for both groups, economic motivations are a “distant second” for professors merely hoping to get their work in the hands of people who can benefit from it directly, Trebley said.
“The faculty entrepreneurs we work with are not satisfied with publishing their work. They want to see it take the step out of the lab,” he said. “Given the importance of the problems they are working on, we feel that we have a serious duty to help them fully realize their work.”
A greater message that Spin Up sends is that potential investors need not trek to Ivy League institutions or traditional intellectual hot spots such as Boston or San Francisco to find “the next big thing.”
It can be found just a short drive away -- within Indiana’s borders -- as Spin Up continues to seek IU researchers’ most marketable ideas and give them the necessary tools to succeed.
“We’re digging in and finding entrepreneurs where no one has found them before,” Trebley said. “Treatments for lung cancer and pancreatic cancer, growing inner ear organs in a petri dish, clean energy from new agriculture products -- these are the types of things we have in the hopper. All of this is happening right here in Indiana, right in our own backyard.”