NC State sees a decade of effort pay off in a growth spurt in startups born on campus
Over the past decade, N.C. State University has seen a notable rise in the number of startups formed on its campus — part of an increased focus by the university to support faculty entrepreneurship.
In 2021, some 20 startups were formed at N.C. State. That was the third time in four years that 20 or more startups have been formed on the university’s campus west of downtown Raleigh.
It’s a marked increased since 2012, when only four startups were born.
In fact, since 2015, N.C. State has created more startups on its campus than its Triangle peers, Duke University and UNC-Chapel Hill.
“We’ve grown pretty steadily,” Wade Fulghum, N.C. State’s assistant vice chancellor for research commercialization, said in an interview. “It’s kind of a linear (growth), not a hockey stick, but ... we’re getting about 20 startup companies a year now.”
N.C. State has a long history of startups forming from the ideas and research of its faculty.
Cary’s largest employer, the analytics giant SAS Institute, was founded by Jim Goodnight, then a faculty member at N.C. State. And Wolfspeed, the Durham-based semiconductor company, was based on research done at N.C. State — hence the company’s name, an homage to the university’s mascot.
Those companies “managed to have great success for the university, but they did not necessarily have a lot of university support,” Fulghum said.
But since Fulghum and his colleague Kultaran Chohan joined the Office of Research Commercialization and New Ventures around a decade ago, the university has become more intentional in supporting startups.
“We came up with this idea: How do we craft a program that can support research-based startup companies from beginning to throughout their life?” Fulghum said.
Now, Fulghum said, N.C. State has assistance in place to help researchers file invention disclosures, develop business models and raise money.
“For 10 years, we’ve just been iterating on that,” he said, leading to the founding of startups such as Locus Biosciences, TreeCo and Sentinel Biomedical.
N.C. State still trails Duke and UNC when it comes to netting royalties and equity payments from those startups, but there is hope that the groundwork being laid now could benefit the university in years to come.
Licensing revenue is generated when a technology gets used, similar to royalties on books or music. Equity payments generally come in a lump sum when a company the school has a stake in is sold or goes public.
UNC, for instance, had a record year in 2021 when it came to netting out payments from technology created on its campus, The News & Observer reported. That was mainly due to one startup, the gene-therapy company AskBio, being acquired by Bayer, in a deal worth up to $4 billion. The AskBio sale came 20 years after it was formed inside of UNC’s medical school.
In 2021, UNC brought in $31.4 million in royalty and equity payments, and Duke, whose startups have gone public or been acquired at high rates, brought in $91 million.
N.C. State’s total for 2021 came in at $6 million.
Fulghum puts that gap down to N.C. State’s lack of a medical school. Both Duke and UNC have birthed many life-science companies out of their medical schools that have generated large amounts of revenue. N.C. State has produced some life-science companies, but many of its startups are focused on engineering.
“On the life-science side, if you can get to a phase one clinical trial, then they can get bought out by a bigger company,” Chohan said. “On the physical science side, many times they actually want to see a product and market (fit). They’re looking for revenue.”
Royalties can also be much more complicated in the physical sciences, Chohan added, because the products tend to be made up of many components that can claim a royalty.
“Because of that, if you’re successful in life science, getting 10x returns is generally easier than physical science,” he said.
N.C. State is hopeful that it could have some big winners in its pipeline, like Locus Biosciences, which is using gene-editing to combat drug-resistant bacteria.
But right now the university is focused on forming as many startups as it can.
“We are not trying to make selective bets,” Chohan said. “Our goal is to push as many of these as we can out there and provide them the support structure to make them successful.
“And, hopefully, the more you push out, a lot of them will be successful. A lot of them are also going to fail, but it’s not going to happen until you push them out.”
This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work. Learn more; go to bit.ly/newsinnovate
This story was originally published March 17, 2022 at 8:30 AM.
