Creating and Positioning a Start-Up Down the Path to Development: Guest Fred Farina

Jul 6, 2020 | Podcast


Guest speaker Fred Farina is the Chief Innovation & Corporate Partnerships Officer at Caltech. Fred shares his experiences commercializing inventions made at Caltech, JPL in partnership with NASA, and tidbits from various other points in his career. Fred would often see hesitation from large companies funding pre-seed or seed projects he has worked on. Creating and positioning a start-up down the path to development is rewarding to Fred. 

What is the dynamic of venture capital in the university space? Fred started the answer to this question with a trip back in time or what he likes to call the “big bang of tech transfer” when the Bayh–Dole Act or Patent and Trademark Law Amendments Act in 1980 that was passed by Congress. The Bayh–Dole Act gave the right to own IP by a university that receives federal funding. Prior, the agency that was funding the invention owned the IP and was not a specialist in commercializing inventions. Thus, many inventions did not get to the end consumer. However, Stanford, Wisconsin, and MIT had figured out a way around the previous state of IP ownership, before the Bayh–Dole Act was passed, by way of individual agreements with the agencies. The model in academia has changed dramatically over the past 10 years. Earlier on, Fred elaborates that universities have a more passive strategy. Universities would patent promising inventions and work with startups or large companies to get the inventions licensed. More traditionally, and for reputable universities, the university office patents and licenses the invention and it is up to the companies or VC’s to take them out of the home office. Fred doesn’t see this as a successful strategy for universities in areas with no VC’s. 

Fred explains that the point of technology transfer in academia is not about making revenue. The end goal is to get technologies out that are funded by taxpayers so that the public benefits from these innovations. Occasionally, and with various revenue models, universities do end up with cash cows on their laps. 

The conversation shifts to VC’s, the increase in VC’s investing in “incubators”, and the low possibility of a pizza arbitrage model being successful for VC’s in the med-tech industry. Fred brings up that, “when it comes to larger successful funds, it is not that they have more winners, it is that the winners that they do have are much bigger”. Neal does not believe that large VC’s generate positive cash flow. However, after listening to this podcast you will have a general understanding of microabrasion and the broad spectrum of interesting inventions Fred has worked on. But the takeaway is all the interesting ways innovation improves our quality of life.

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