This article appeared in the June 2022 issue of Technology Transfer Tactics. Click here for a free sample issue or click here to subscribe.

Ignite, Cornell University’s gap funding series, will expand its innovation pipeline in the coming years using a $3 million annual infusion of funding from the provost’s office and a handsome donation from alum Peggy J. Koenig, chair of the private equity firm Abry Partners.

Cornell’s Center for Technology Licensing (CTL), led by Executive Director Alice Li, oversees and manages the gap funding series, which is comprised of four distinct but inter-related programs:

• Ignite Innovation Acceleration, a proof-of-concept fund.
• Ignite Startup Projects, a validation fund for existing ventures looking to get to the next level.
• Ignite Internship, which pays the cost of student interns for university startups.
• Postdoc for Ventures, which matches postdocs to promising technologies and pays them to build new companies.

Postdoc for Ventures program

Perhaps most notable among these initiatives is the Postdoc for Ventures program, which builds on the existing Runway Startup Postdoc Program at Cornell Tech, the school’s New York City satellite. Li believes the Runway program was the first in the U.S. to hire postdocs as entrepreneurs, and now the Postdoc for Ventures program is taking that concept to Cornell’s main campus and integrating it with research labs there.

Universities traditionally hire postdocs to do research, but the Postdoc for Ventures program hires them with the goal of starting technology companies and training the entrepreneurs along the way. The goals are two-fold: to get more companies launched, and to encourage a new generation of start-up leadership.

The postdocs may have an invention of their own ready to be commercialized or Ignite may hire them to work with Cornell faculty inventors. “The main purpose is to advance the technology, develop businesses, and grow these entrepreneurs,” Li says. “We’re trying to integrate many different things, so entrepreneurs have more support from the community and have a strong foundation for the start-up,” Li said. She also notes that providing training for the entrepreneurs is a major part of their intent for the program. “We hire them as a Cornell postdoc with an entrepreneur outlook.”

Ignite just closed the round of applications for its first cohort of five or six postdocs in spring 2022. Each postdoc receives $120,000 compensation, covering their salary, benefits, and basic lab expenses. All Ignite Postdocs are full-time Cornell employees until they “graduate” a company from the program.

Postdocs propose projects to work with based on disclosed Cornell innovations. The candidates can be Cornell PhDs who are close to graduating, current Cornell postdocs, or external candidates with expertise in the proposed project area. All candidates must have an endorsement from the faculty innovator who generated the invention.

Ignite offers technical and business training for the postdocs so they can effectively integrate into the Cornell entrepreneurial ecosystem. Ignite is also hiring entrepreneurs-in-residence (EIRs) to support the postdocs throughout their time in the program, Li reports.

The program uses a “one plus one” model with two phases. During Phase I, which lasts from six months to a year, the postdocs report to a faculty mentor, work in the faculty inventor’s lab, access Cornell’s incubators, and receive mentorship and direction from the incubator director. Also during Phase I, they build their business ideas and engage in customer discovery. The market evaluation work they do in this phase of the program builds on programs such as the NSF I-Corps program and the engineering school’s Commercialization Fellows Program. Ignite prefers to hire graduates of these types of programs so they have a good working knowledge of what it takes to bring an innovation from lab to market.

Once the postdoc incorporates their project as a business, they enter Phase II, which lasts from three to twelve months. During this phase, they will report to an incubator director at one of three Cornell incubators: 1) The McGovern Center, an incubator for life sciences companies, 2) The Praxis Center for Venture Development, an incubator for engineering, digital, and physical science start-ups, or 3) The Runway incubator for digital technology start-ups. Under the supervision of the incubator director, Ignite Postdocs continue to sharpen their business strategy, establish a founding team, and connect to investors. The companies also license Cornell technologies at this stage.

“They are connecting with investors, and then once they’re ready to operate the company independently, they graduate from the postdoc program,” Li says.

Cornell provides funding to the postdocs for each of the two phases of the program. Half of the financial support in Phase I and the total amount in Phase II is combined as the principal of a SAFE note in the company once it is established. The amount not incorporated into the SAFE note is considered a grant.

If the company advances quickly it can graduate before the end of the second year without going through the whole phase. “The program offers built-in flexibility depending on each specific case,” Li explains.

Ignite Startup Projects program

In addition to the Postdoc for Ventures initiative, CTL has expanded its Ignite Startup Projects program, again featuring a SAFE note investment.

As opposed to launching companies, this program helps existing early-stage start-ups with technology and business validation. Project funding is available up to $100,000 using a SAFE note, which Li views as a better option than traditional equity or a convertible note, since it avoids saddling the start-up with a debt obligation and postpones any company valuation for later.

“If Ignite puts in, for example, $100K, by the time they raise professional money it will be converted to company equity,” Li explains. “It’s a much easier and simpler vehicle than the traditional convertible note.” Moreover, the SAFE financing takes the pressure off of the start-up to pay back debt by a specific date or at a particular fundraising milestone because Ignite will be paid in company stock at a later date, at a yet-to-be-determined valuation.

The companies are usually associated with Cornell incubators and are already incorporated and running independently, but have not yet raised any money or are applying for SBIR funding.

The program is designed to allow the young start-ups to further validate their technology, market, and product idea — thus making the company more attractive to investors and in a better position to raise a significant amount of money.

Innovation Acceleration program

On the next rung of the commercialization ladder being built out at Cornell is the Ignite Innovation Acceleration program, which provides proof of concept money to researchers’ labs. The funding is designed to accelerate technologies to a stage that is ready for licensing, either to an existing company or a start-up.

The expanded program will support 12 to 16 projects annually. Each project will initially receive $50,000, which was previously the maximum amount. With the expanded program, selected projects will be eligible for a second tranche of $50,000.

The Ignite Innovation Acceleration program has quickly built a strong track record: 70% of grantees get licensing deals or launch a start-up.

“This is something we’re trying to grow and have the seeds from everywhere on the campus,” Li says. Money to the lab is provided as a no-strings grant. If and when the technology is licensed, the university receives a royalty and/or equity position, Li says.

Ignite Internship Program

Ignite is also launching an internship program designed to help companies that have not yet raised early-stage (Series A) financing. CTV created the program based on input from university start-ups, which said they wanted to leverage student talent to help their companies grow but could not afford to do so.

Ignite provides the start-ups with $10K per student per summer to fund the interns. Li says they wanted to keep the process as simple as possible, and all CTV requires from the Cornell start-up companies is a job description showing that the position would offer the candidate a good career development opportunity.

Start-ups are allowed to choose their interns, Li emphasizes, because they know what skills and experiences they need best.

Of course Cornell offers traditional internships with larger, established companies to its students as well, but CTV sees the Ignite program as a distinctly different and perhaps more valuable opportunity.

“We saw this program as good for our start-ups and good for our students,” she says, noting that students don’t often get opportunities to intern at early-stage companies, where they can be swept up in the entrepreneurial energy and may catch the start-up “bug.” The program offers them the chance to experience life in a start-up firsthand, and just maybe become part of the next generation of founders.

Contact Li at xl11@cornell.edu.