October 18-20 | Tucson, AZ

The Research Institution GAP Fund and Accelerator Program Summit

Framing the Expectations of Tech and Start-up Gap Funding

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October 18-20, 2023 / Tucson, AZ
The annual summit for research institution gap fund and accelerator programs, including proof of concept programs, startup accelerators, and university venture funds

The Story

From my experience, the framing of expectations to sponsoring leadership and stakeholders is the single most important action in the successful launch and sustainability of any tech or start-up gap funding program. This is especially important if any source of the funds is derived from public dollars.

We have seen the following story transpire too many times. A passionate, local member(ship) spends an amazing amount effort and will on building a public-private consortium of like-minded individuals to establish an early-stage capital fund for promising technology and start-ups. The group lobbies local and state legislatures to support this “economic development” initiative on the platform of business growth/attraction and job creation. The group secures funding for a few rounds and makes initial investments. At or around year two, the fund is put under the speculation spotlight by pols and pundits (as illustrated in this recent article) and must validate its existence (Raise your hand if you have lived this).

Here, early-stage tech and start-up gap funds face the first real challenge—reconciling the perceived expectations of public stakeholders with the hidden ones. You see, any normal person (read: those not intimately involved in early-stage innovation) will associate capital investment with financial returns, and grossly underestimate the timeline to impact of most funded projects. There will be a natural balancing act between patience and belief in the cause, and the reality of political seasons and news cycIes. If not armed with support, things will end bad, and it’s our fault.

The good news is that I believe that we can help mitigate against the downside of this reality through active communication of impact at the onset and throughout the fund life. It’s our job to effectively communicate how these tech and start-up gap funds are different, and how their role in innovation cannot be diminished to ROI. Gap funding is more a public good than a traditional financial investment and should be measured the same way.

Through our Mind the Gap initiative, we have constructed a model below that we encourage you to use with your stakeholders to communicate realistic expectations for impact. This impact timeline is backed by an analysis of these funds and is described in greater detail here. For instance, in our recent report we found that in the near-term these funds can be incredibly powerful in attracting third-party capital, like angel and VCs, to regions, specifically up to $9:4:11:148 of attracted capital per $1 of gap funding in government, corporate, angel, and venture follow-on, respectively.

F29.General Expectation Timeline for Impact


Moving forward, we will continue to fill www.gapfunding.org with stories of funding successes. We will push forward in our efforts to provide fund program best practices and activity reports. We will continue to demonstrate the impact of these funds by sharing global indicators with the community. This is all available to you today—for free.

And if you need more tailored information for your fund, we publish (and are in the process of updating) a report that takes a closer look at these funds, and can even do more focused work through our fund services.

Let’s not shoot ourselves in the foot before we step out the door, especially as federal moves like the TRANSFER ACT begin to take shape. If we work together we can bring factual expectations to those that care the most, and continue to develop this legitimate and much needed form of innovation funding.

-Jacob Johnson
Founder, innovosource

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