Research Administration Operations Update

Tuesday, May 18, 2021 02:00pm, EDT

External Commercialization Funding

Dilutive Capital

Dilutive capital refers to funding that requires the “sale” of a portion of a company, or economic rights to an IP, in exchange for funding.

External Dilutive Funding Sources

Below are several sources of dilutive funding. If you are interested in any of the below. Please contact our Innovation Ventures Team

  • In addition to its non-dilutive Research Grant program, the NJHF has a larger, up to $50,000 Innovation Grants program. This program is designed to help address an important need of researchers in the middle stages of the funding continuum–in between very early research ideas and those ready to form companies. In select cases, NJHF has awarded additional tranches of funding to further develop promising technologies. 

    While this program funds a Researcher’s lab, it entails the signing of an Option Agreement with partner institutions (e.g., Rutgers University). Should NJHF choose to exercise the Option, a startup company is typically formed via its Foundation Venture Capital Group affiliate (more below), with NJHF having an equity stake in the startup. 

  • Foundation Venture Capital Group—an NJHF affiliate—uses impact investing to provide pre-seed and seed funding to health-related start-up companies at affiliated organizations to help them advance toward and through commercialization. With investments are typically up to $500,000 per technology, into a startup, FVCG offers a unique early-stage funding opportunity

  • P1V is a program sponsored by the University City Science Center, and is typically viewed as a follow-on program for successful QED awardees. P1V is an accelerator partnering with academic inventors to launch new startup companies to commercialize their technologies. The program establishes a new company and provides business expertise, funding and strategic guidance. Each project must submit one or more SBIR, STTR or equivalent funding proposals. 

    P1V offers an initial seed investment of up to $25,000, guidance and matching with a business founder, and, should milestones be met, up to $450,000 in two tranches of follow-on investments.  

  • The Rutgers New Ventures team partners with Venture Capital firms, Angel investor groups, and other institutions. 

    • Institutions that sponsor pitch competitions with various prizes (cash or otherwise) include: 

    • Some investors sponsor a “Rutgers Day” where select Researchers or start-ups can pitch their technology in hopes of obtaining grants and/or investments. 

    Please contact the Innovation Ventures team with any questions. 

Non-dilutive Funding

Non-dilutive capital refers to funding that does not require the “sale” of either an ownership in a company, or economic rights to an IP.

External Non-Dilutive Funding Sources

Below are several sources of non-dilutive funding. Note: Sources for funding are highly dynamic. New or topic-specific programs are launched year-round, and existing ones can and often do change scope over time. If you have any questions regarding the below or other potential commercialization-focused funding opportunities, please contact our Innovation Ventures Team

  • The QED Program seeks medical technologies with high commercial potential. QED is sponsored by the University City Science Center (typically known as the “Science Center”; based in Philadelphia). QED is a mentoring and coaching program that helps academic researchers plan for commercializing their early-stage life science and healthcare IT technologies. 

    In addition to a grant of up to $200,000 over 12 months (including Rutgers internal match: cash or in-kind between the applicant’s department and the Office for Research), QED provides key resources, including business mentors, access to industry, regulatory advice, and exposure to investor representatives. While the vast majority of applications are for IP, startups will be considered.  

  • The New Jersey Health Foundation sponsors a Research Grant Program with the goal of supporting early research with exciting potential. The grants are up to $35,000 for each research project. The goal is to help applicants qualify for larger grants from other organizations in the future. 

  • The Partnerships for Innovation (PFI) Program offers researchers from all disciplines of science and engineering funded by NSF the opportunity to perform translational research and technology development, catalyze partnerships and accelerate the transition of discoveries from the laboratory to the marketplace for societal benefit. NSF funding lineage is required; for Researchers without NSF funding to-date, NSF lineage could be met by qualifying and participating in the NSF National I-Corps program, which is not limited to any specific field. 

    Grants are up to $250,000 over 18 months, with collaborative (multi-PI/-institutional) projects able to apply for up to $550,000 for 36 months.  

Funding For IP

  • There is typically a clear delineation of funding towards an IP (i.e., pre-startup), versus towards a startup. Funding for IP typically comes to the lab for the purpose of developing a technology towards commercialization. Funding for a startup goes to a company, which could then allocate the capital between its corporate needs, R&D at the corporate level, and (if appropriate) sponsoring research at a University lab. 

Funding For Startups 

  • SBIR/STTR grants are U.S. congressionally-mandated funds for small businesses, with the goal of advancing R&D towards commercialization and in support of building a strong national economy. Each federal agency with a large, federally-funded R&D budget is required to allocate a pre-determined percentage of its budget to SBIR and STTR grants. 

    Grants are awarded in various stages: Phase I grants cane be up to $225,000 for up to 12 months (depending on the agency and proposal), and Phase II grants can be up to $1.6M for up to 24 months (again, depending on the agency and proposal).  

    Here is a Rutgers SBIR/STTR Guide for your reference.