October 18-20 | Tucson, AZ

The Research Institution GAP Fund and Accelerator Program Summit

Gap Funding: A critical component of US innovation system

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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

The most critical issue related to crossing the “valley of death” is the availability (or lack thereof) of resources for promising inventions. Perhaps the most significant resource shortage can be found within the University as a basic research breakthrough is disclosed. The best universities are putting specific gap funds and gap programs in place to move invention to innovation.

Gap funds are institutionally generated, dedicated, and focused on three primary areas of early stage technology development: translational research, proof of concept, and business formation.

Translational research: Federal dollars are supportive up and to the point of application. As invention is applied, researchers often need more funding prior to disclosure. Where SBIR/STTR funds aren’t available or valid, many universities direct up to $200K or more at this later steps of research. The ideal outcome is either a disclosure to the technology transfer office, or an early “kill” on what could be a much more expensive project

Proof of Concept: Most schools that exhibit gap funds, have a proof of concept fund. These funds are often smaller in their grants (on average $50K) but take care of the most important decision making step in the developing inventions life—a decision on the best route to commercialization. Funds are directed at market analysis, prototype development, and technology assessment. The outcome is a decision and a capability to move forward (license, start-up), or to drop the technology. This step can also add value to the bundled technology that can return value to the University

Business Formation: While the first two types of funds are generally grants (few strings attached), Universities actually invest in certain instances when a start-up is the idea commercial vehicle, upwards of $1M. Equity stakes in their own technology can increase the ability of the project to attracted third party leverage, bring returns back to the university, and adequately resource the venture in its most risky and exposed stage

Schools also put gap programs in place which may include:

  • Technology and Business Planning assistance from graduate students (business and technology schools)
  • Mentorships from CEOs in residence
  • Prototyping centers
  • Venture Centers to focus and assist university start-ups
  • Investment Community formation with regular showcases of interesting technology

These gap funds are a response to a fleeting venture capital (and currently angel investment) community. The percentage of venture capital allocated to early stage technology has been decreasing since 2000 (to about 4-5% of the total today). In the “glory days”, when there still remained a “venture” in VC, the funds were small, willing to take a risk, and quick to invest. The outcome was very polarized as those who made it—really made it, and those that didn’t died out. The success bred a model which invests more like an investment bank/hedge fund than traditional venture capital. Now, most of the country (outside of silicon valley and the greater Boston area) is at a disadvantage—which places the US innovation competency at risk.

In 2005, as part of an internal project I surveyed 50 of the top research universities in the United States to investigate their approach to this dilemma. From that research, I exposed 80 different gap funds. My observation was that many of these funds were very early in their life, so outcome metrics were years off. After releasing the report, Mind the Gap (link below), I have heard from over 100 more universities interested in starting and launching their own gap funds.


Please contact me if you are interested in being part of the future survey, and/or interested in gap funds for you institution.

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