Sexton on the changing landscape of technology commercialization, attracting VCs to the Midwest, and what’s next for the business environment at U-M.
When it was announced that Kelly Sexton would be joining the University of Michigan as Associate Vice President – Technology Transfer and Innovation Partnerships in December of 2017, Vice President for Research Jack Hu said that she would be, “Building stronger processes and partnerships to ensure that the results of U-M research can be applied to the benefit of society.” Over the past year, Sexton and the technology transfer team have made impressive strides in that direction; putting systems in place to bring a record number of U-M technologies to market, negotiating long term relationships with corporate partners, and launching new startup companies at a rate of more than one every three weeks. Most recently, Sexton’s leadership role has evolved to also encompass the oversight of U-M’s Business Engagement Center, in collaboration with the Office of University Development. With these changes in mind, we thought that we’d ask Sexton for her thoughts on her first year leading Tech Transfer efforts, the evolution of academic/corporate partnerships, and where we might expect to see things headed.
BEC: Before we discuss your role with regard to the BEC, I thought we’d start by talking about tech transfer here at U-M. Can you talk about how your perspective may have evolved since coming to U-M from North Carolina last year?
SEXTON: I knew before coming to Ann Arbor what a huge research footprint the University of Michigan had. I knew the stats, the reputation, and the tradition of excellence. I knew that incredible discoveries were being made every day, in every corner of the campus. And I knew that the technology transfer group here was one of the best in the country. But I also knew that there was a lot more that could be done.
Ann Arbor’s entrepreneurial ecosystem is growing, and the campus is making a real effort to invest in translational programs, believing that technologies developed on campus should be given every opportunity to change the world for the better. So I guess you could say that I had a sense early on that there was tremendous potential to do more, as these programs continue to mature, and as more entrepreneurs began chose to launch and grow companies in Ann Arbor.
As for how my perspective may have evolved since coming here, I think I’ve just come to appreciate how quickly it’s all happening. There clearly is an appetite here, both at the university, and in the community, to build things, solve problems, and make a difference. And we see that in the numbers. People tend to focus on the startups — and we launched a record-breaking 21 last year, which is incredible – but I also like to pay attention to new invention disclosures submitted to the office. Last year, we had 484, which is a new record. That’s the raw material – the ideas that become the new cancer therapeutics, the new network security companies, the new medical devices. That number tells us that our researchers are engaged in technology commercialization at an unprecedented level, and dedicated to this idea of getting their discoveries out into the world. AT U-M Tech Transfer, the future is bright – our researchers are engaged, and the various university units are working together like never before, focused on making an impact.
And you’re finding the pace of things here to your liking?
Absolutely. Things that would be the high-water mark for the year at most other universities happen with amazing regularity here at U-M. For example, in just the past month alone, we saw U-M startups Histonics raising $54M, and Fifth Eye raising $11M in financing. Not only are both companies doing incredible work – advancing solid tumor ablation and patient monitoring technologies respectively – but both are located here, in Ann Arbor, creating jobs, and helping to diversify Michigan’s economy. And we see these kinds of incredible events occurring with a regular cadence.
Your predecessors in this position did not have “Innovation Partnerships” in their titles. What does this mean to you?
Like corporate relations, the tech transfer field is evolving. It’s not as transactional as it once was. While we still market technologies, negotiate licenses, and all the rest of it, we see our job as being more about relationship building. We just went through a Mission, Vision and Values exercise in Tech Transfer, and the process yielded a list of 11 core beliefs. One of them is that it is our objective to create long-term relationships that benefit the University of Michigan community – not just win negotiations. And that’s really our philosophy. We see ourselves as being in the relationship-building business. We’re not just trying to license a single technology. We’re looking for companies that can, over time, work with us on multiple technologies, and as research sponsors. We want the entrepreneurs that we work with to come back to our office when they are looking for their next big thing, and we want them to refer their colleagues to seek us out. It’s our job to engage long term with our ecosystem partners, maintaining an active awareness of their needs, always being there to connect them with emerging opportunities at U-M. This long-term mindset, and dedication to customer service, I think, is what sets us apart. And this ethos extends from U-M Tech Transfer to the Business Engagement Center.
So it’s this long term perspective, you think, that sets U-M’s tech transfer program apart from peer institutions?
Well, that’s one of the things. But U-M does a lot of things well. To give you another example, we do an outstanding job of curating our technology pipeline and presenting it in a coherent way to potential investors. This is an important tool for engaging the venture community, and we’ve heard from several VCs that our startup pipeline report is the gold standard. That’s just one example, though. We also have weekly team meetings where we pull together licensing and venture teams to review new invention disclosures so that we can think broadly about available resources and make transparent, consistent and informed decisions about how best to support our faculty inventors as they advance their technologies. We really have a wonderful vantage point from which to see the entire innovation pipeline being created at U-M, and the resources — both internal and external to the university — that can move them forward.
One of the key areas where we demonstrate leadership is in building a strong licensing team. And, if you want one more example of something that sets us apart, I’d say our Mentor-In-Residence program. We have one of the largest in-house mentor-in-residence programs in the country. It is something that we needed in order to build the kind of environment on campus that we have today. We are the nation’s largest public research university, yet we are located in a mid-sized college town in the Midwest. We need to be purposeful about how we connect our technologies with mentors and with entrepreneurs and companies, because these relationships and connections do not happen as as organically here as they do in Boston or San Francisco. This Tech Transfer Talent Network, or T3N program is available to U-M inventors as well as those at partner universities throughout the state. It is supported by the Michigan Economic Development Corporation, who understands that connecting early stage university technology commercialization teams with experienced mentors is an important component to ultimate startup success and economic impact.
How does U-M’s reputation in commercialization draw faculty and students to U-M?
In terms of our students, having the #1 ranked undergraduate entrepreneurship program in the country is a huge draw. Students interested in entrepreneurship have the opportunity to participate in a variety of entrepreneurial programs, create a venture before they leave campus, and receive a lot of support for their venture and demand from the market.
For researchers, the driving motivation is to see their programs have an impact in the broader world. When you talk to faculty, their goal isn’t about commercialization, it’s about seeing their idea or technology used in clinics or put into broader application in the world. It’s about impact and seeing their technology move beyond publications or training to see it impact the public in a positive way. We help them do that every day.
So let’s talk about the evolving relationship between the Business Engagement Center at Tech Transfer.
Our two organizations have been co-located since the launch of the Business Engagement Center in 2007, which makes sense, given that both offices work to build relationships with corporate entities in order to advance the university’s mission. U-M Tech Transfer works primarily to build relationships that will help connect existing technologies with entrepreneurs and industry, where they can contribute toward solving the problems that face humanity. The BEC team is primarily working to build relationships that will bring new corporate relationships to the University, but it’s really two sides of the same coin. Both teams are working to build long term, mutually beneficial relationships with outside entities in service of the University’s mission. And I think that’s why internal reporting relationships are aligning. It’s a recognition of the fact that there’s a lot of synergy in what these two teams do. Together, Tech Transfer and the BEC are truly the front door for companies, entrepreneurs and investors looking to engage with the University of Michigan.
As you mention, the two organizations are already very close. Do you see opportunities for us to work even more closely in the future?
What excites me about coming to work every day is the way we’re able to bring together companies, researchers and startups. Mcity is a great example of that. Mcity’s TechLab shows the ability for U-M to be at the forefront of emerging fields, determine how to engineer it while bringing policy makers, legal implications to bear. That comprehensive view is something that is uniquely U-M’s to build, and it takes our teams working together to bring that to fruition. Because of our multidisciplinary strengths in all these spaces, U-M brings the ability to solve these big societal issues on one campus. And, I think, if we want to be truly impactful, it’s going to mean leveraging every resource at our disposal, and that means really thinking about technology commercialization, sponsored research and Michigan’s entrepreneurial alumni base together. So, yes, I can foresee more meetings where we’re working together to think about these big issues facing the world, and working together to address them.
What are some of your goals over the next two years?
Obviously, I am interested in working with the BEC and Tech Transfer leadership to build on the synergy between these two units, and find ways for us to collaborate even more closely.
I’d also like to see us marshal more resources to support faculty and help them get their technology to market. U-M, along with support from MEDC, brings serial entrepreneurs to campus through our Mentors in Residence (MIR) program, and I’d like to see us build on that success. We can apply MIR knowledge to support even more faculty teams. This is a tremendous resource we can bring. I want to build on the success of that program.
I’d like to increase the opportunity for start-up funding, particularly those coming out of the university. At U-M we have a fantastic opportunity to demonstrate how a world class research university that isn’t on the west or east coast can contribute to a vibrant entrepreneurial ecosystem.
It is important to our nation that we figure this out. 75% of startup funding is in California, New York, or Massachusetts, yet innovation is more evenly distributed throughout the country because of our great research institutions. States need to figure out how to bolster and grow their innovation ecosystems even if they don’t have access to venture capital like those three states.
We want to help increase access to capital, and that’s why we work so hard to maintain relationships with venture funds and have entrepreneurial ecosystem relationship here. In 2018, angel investors and venture firms put $437M in our state. During the same 12 months, U-M startups raised over $670M venture capital and angel funding. This was higher than the amount raised in 2017, and we want this upward trend to continue.
How are you all settling in to life in Michigan?
My husband (faculty at Michigan Medicine) and I and our three young boys are loving Ann Arbor. The communities and schools are a wonderful welcoming environment. My husband is finding U-M to be an incredibly collaborative research community. We enjoy getting out and experiencing all that Michigan has to offer, including the beautiful landscape “Up North”.