Illinois Innovation Index

Innovation news and metrics for metropolitan Chicago and the state of Illinois

Winter 2017

University Entrepreneurship:
Illinois university startups surge to
record level

The Talent Index is

brought to you by:
Overview
Illinois universities not only produce some of the strongest STEM talent
in the nation but also spur innovation and economic development in the
state. These institutions cultivate innovative thinkers and give them the
resources they need to develop and deploy their ideas. Budding
entrepreneurs at Illinois universities have access to more resources than
ever before, including university incubation centers, university-supported
funding, and innovative curriculum to help them develop new ideas and
technologies into viable businesses. The expansion of these resources is
paying dividends, with 2016 showing a surge in startup creation and
retention in the state.

In this annual issue of the Illinois Innovation Index, ISTC partnered

with the states universities and other data providers to establish
a comprehensive picture of the entrepreneurial activity taking place
across higher-education institutions. In addition to capturing the
aggregate number of startups and intellectual property activity from
across Illinois campuses, this year we dive deeper into funding activity,
industry sectors, federal programs, and alumni entrepreneurship.

Key findings:
Illinois universities produced more
than 800 startups from 2012 to 2016,
nearly 100 percent more than
20092013 when the survey began.
Approximately 78 percent of startups
founded from 2012 to 2016 are still
ILLINOI S UNIV E RS IT Y STA RTUPS
20122016
2016 marked the highest level of Illinois university startup production
since our survey began.
30% had a foreign-born
founder or cofounder,
and 30% had a female
129 founder or cofounder

804
active or were acquired, and 81
tech transfer
percent of those, nearly 500 startups
companies, remain in Illinoisthe
highest level recorded since the total university
survey began.
675
nontech
startups

Capital raised by university startups transfer startups

also surged in 2016, with nearly $630
million in funding raised from 2012 to

%
78
2016 compared with $345 million
from 2011 to 2015. In addition, 78
1%

612
acquired
percent of active companies that
received funding are based in Illinois.
remain active
21%
inactive
The national I-Corps program, which
continues to grow in Illinois, is
catalyzing the formation of startups
and connecting them to vital early-
stage funding. I-Corps startups are
81

more than 7 times more likely to 19%

%

are ouside
receive Small Business Innovation Illinois
Research (SBIR) and Small Business
Technology Transfer (STTR) funding
than other startups. 497
remain in Illinois
Compared with
Illinois universities are leaders Nearly 500 companies $345 million from
from the 20122016 2009 to 2013
nationally in several tech transfer
period remain in Illinois, a
metrics, such as disclosures and
patents, but growth in these areas
record since the survey
began $628 million
has lagged the national average in funds raised
recent years. $32 million came
from SBIR/STTR
funding
New data provided by PitchBook
shows that alumni from Illinois
universities started more than 1,100
companies and raised more than $9
billion in funding over the past five
years. Alumni founders came from $359 $279
diverse fields, with no one field
million for million for
tech transfer nontech transfer
accounting for more than 10 percent startups startups
of all founders.
3
 Part 1: Startup production reaches new heights

Over the past five years, student and faculty entrepreneurs in the state formed
approximately 804 startups through university technology licensing, entrepreneurship
programs and competitions, and other university initiatives. This number represents
tremendous growth over the past several years. In fact, universities created roughly
double the number of startups from 2012 to 2016 compared with 2009 to 2013the period
when the survey began.1

Much of the growth in startup production over the past several years can be attributed to
the explosion of nontech transfer startupscompanies that do not license university
technology. Illinois universities have continued to develop more robust entrepreneurship
curriculums, programs, competitions, and spaces that support student entrepreneurs of
diverse disciplines.

From 2012 to 2016, 675 nontech transfer startups were formed on Illinois university
campuses, compared with 295 such startups from 2009 to 2013. Year-on-year trends also
reflect this growth. The ISTC survey identified 250 nontech transfer startups launched in
2016 compared with just 70 in 2012a more than 250 percent increase.

Company spotlight: BluSolar

BluSolar is a cleantech startup founded by students from Millikin University. Harnessing

programs provided by Millikins Institute for Science Entrepreneurship and Center for
Entrepreneurship, BluSolar offers research and development services to solar
manufacturers or distributors seeking to enhance their products. BluSolar has
demonstrated that cryogenic treatment results in a 25 percent improvement in wattage
1 The 20122016 time output due to microstructural changes to the photovoltaic solar cells. Thanks to this
period represents school innovative process, BluSolar was recently selected as a finalist for the Clean Energy Trust
year 20112012 to school
year 20152016, the (CET) Cleantech University Prize, sponsored by the U.S. Department of Energy. Together
five-year time period for with other finalist startups from across the Midwest, BluSolar will be able to test the market
which the data were
collected. potential of its research while also receiving mentoring and networking support from CET.

Illinois Innovation Index Winter 2017 University Entrepreneurship: Illinois university startups surge to record level 4
 NUMBER OF UNIVERSIT Y STARTUPS
YEAR FOUNDED, 20122016
Tech transfer Nontech transfer

300 285

250

200

158
146 251
150
124

91
100
132
120
101

50 71

26 26 34
20 23
0
201112 201213 201314 201415 201516

78% 81%

are still active are still in Illinois

Source: ISTC University Entrepreneurship Survey

Universities support not only the development of these startups but also their continued
success. More than three out of four (78 percent) startups formed from 2012 to 2016 are
either still active or were acquired. And a record number of these companies have
remained in the state, continuing to build their business and generate jobs and economic
impact for Illinois. Of the 612 still-active startups founded from 2012 to 2016, 81 percent
remain in the state compared with 73 percent of those founded from 2011 to 2015.

Illinois Innovation Index Winter 2017 University Entrepreneurship: Illinois university startups surge to record level 5
Company spotlight: FourKites

FourKites is a transportation logistics technology platform that uses real-time, cloud-based

software to replace outdated tracking systems used by shippers and freight brokers.
Founded by Northwestern Kellogg School of Management student Mathew Elenjickal in
2013, FourKites won second place in the business products and services category at the
2014 NU Venture Competition. Elenjickal also participated in the 20132014 inaugural Zell
Fellows Program and the 2013 Pritzker Group Venture Fellows Program. In addition,
FourKites recently won a Chicago Innovation Award and was named one of Chicago Innos
50 on Fire after completing its $16 million Series A funding round in October 2016.
FourKites was also named one of the Best Entrepreneurial Companies in America by
Entrepreneurs 2016 Entrepreneur 360 list. In less than two years, FourKites has added
50 employees to its Chicago office and expects to add at least 50 more by the end of 2017.

These university startups span a range of industries, from clean technology and
advanced manufacturing to software and the Internet of Things. However, more than half
of all tech transfer startupsthose utilizing university intellectual property (IP)are in
the biomedical field.

Nontech transfer startups are less concentrated in any one industry. Industries with the
most nontech transfer startups include software and applications, finance and business
services, healthcare, food and agriculture technology, consumer products (such as
clothing and retail), and education.

Founders also come from diverse backgrounds. Based on data from university partners,
ISTC estimates that, for startups founded from 2012 to 2016, more than 30 percent have a
foreign-born founder or cofounder. In addition, approximately 30 percent of these
startups have a female founder or cofounder.

Illinois Innovation Index Winter 2017 University Entrepreneurship: Illinois university startups surge to record level 6
 NUMBER OF UNIVERSIT Y STARTUPS BY
SECTOR , 20122016
Tech transfer Nontech transfer Percent of
industry

Biomedical/healthcare 17%

Software/applications/IT 13%

Finance/business services 9%

Agriculture/food technology 6%

Consumer products 5%

Education 4%

Electronics/Internet of Things 3%

Clean technology 3%

Advanced materials/manufacturing 2%

Other 8%

0 20 40 60 80 100 120 140

Source: ISTC University Entrepreneurship Survey

The important role of immigrant entrepreneurs

We recently highlighted the outsized role that immigrants play in Illinois tech economyespecially in
entrepreneurship. In Illinois, immigrants make up less than 15 percent of the population but account for
more than 22 percent of entrepreneurs.1 The proportion of startups founded by immigrants is even
higher at Illinois universities. Based on available information from our university partners, we estimate
that at least 30 percent of university startups created over the past five years had a foreign-born
founder or cofounder.

The high proportion of startups founded by immigrantsboth at Illinois universities and around the
countrysuggests a tremendous opportunity for U.S. economic growth. Indeed, immigrants or children
of immigrants established more than 40 percent of current Fortune 500 companies.2 Immigration
reforms, such as the national startup visa and other policies to retain immigrant talent, should be
implemented in order to make it easier for these founders to stay and grow their business.

1 The Contributions of New Americans in Illinois, New American Economy, August 2016.
2 Dane Stangler and Jason Wiens, The Economic Case for Welcoming Immigrant Entrepreneurs, Ewing Marion Kauffman Foundation,

September 8, 2015.

Illinois Innovation Index Winter 2017 University Entrepreneurship: Illinois university startups surge to record level 7
Part 2: Universities increase entrepreneurial resources
Illinois universities are producing more startups due in large part to their intentional
efforts to increase entrepreneurial resources for students, faculty, and staff, which include
curriculum, programming, competitions, and seed funding. Many Illinois universities are
delivering these resources through centralized spaces, which serve as hubs to facilitate
cross-campus, interdisciplinary activity. These spaces include entrepreneurship centers,
incubators, and affiliated technology parks. In addition to providing physical space to
house companies, these spaces typically offer mentorship, connections to industry, and
links to potential fundershelping entrepreneurs bring their product or service to market.

UNIVERSIT Y INCUBATION & TECH PARKS

1 University of Illinois at Chicago:

9 Health, Technology, Innovation (HTI) Center
10
1 7 2 Bradley University: Peoria NEXT
6
8 3 Southern Illinois UniversityCarbondale:
Southern Illinois Research Park

4 University of Illinois at UrbanaChampaign:

2 Research Park, EnterpriseWorks

4 5 Southern Illinois UniversityEdwardsville:

University Park

6 Illinois Institute of Technology:

University Technology Park, Idea Shop, Kent Law Clinic

5 7 University of Chicago: Polsky Center for

Entrepreneurship and Innovation

8 Western Illinois University: Quad City

Manufacturing Lab

3 9 Northern Illinois University: EIGERlab

10 Northwestern University: The Garage

Source: ISTC

Over the past decade, universities have also increased their financial support of early-
stage university startups by creating proof-of-concept (POC) and innovation funds that
provide startups with critical early-stage capital. These funds are managed by universities
across Illinois, including Northwestern University, Southern Illinois University, University
of Chicago, University of Illinois at Chicago, and the University of Illinois Urbana-
Champaign.

Illinois Innovation Index Winter 2017 University Entrepreneurship: Illinois university startups surge to record level 8

2 Mind the Gap: The
Technology and Start-up
Gap Funding Report, $30 million in 50 startups.
Innovosource, 2016.
3 Emerging growth
companies are startups that
have shown development
progress, often by taking a
product or service to
market, and are typically
seeking higher funding
amounts from angel or
venture capital groups.
Company spotlight: Cast21
Founded by a group of undergraduate engineering students at the University of Illinois at
Urbana-Champaign, Cast21 uses the latest tools in medical technology to create a
waterproof, breathable cast for broken bones. Initially conceived during a senior design
project, Cast21s concept was inspired by cofounder Jason Troutners experience in
uncomfortable and irritating casts. Unlike traditional casts, Cast21s solution has an open
lattice designinspired by the Chinese finger trapthat allows the wearer to wash and
scratch the skin below the molding. Cast21 participated in UIUCs iVenture Accelerator
program, the Cozad New Venture competition, and the ZeroTo510 medical device
accelerator program. The company has also presented at the Hello Tomorrow Conference
in Paris, as well as at Chicago Techweek. Currently located at UIUCs EnterpriseWorks
incubator, Cast21 has raised more than $800,000 to support further product development.
For example, as the venture capital arm of the University of Illinois, IllinoisVENTURES
supports startups by providing POC funding as well as seed and venture capital to
startups from both the University of Illinois and other Midwest institutions. Since its
inception in 2002, IllinoisVENTURES has invested more than $185 million in
entrepreneurial projects. Innovosource, a firm that connects companies and investors
with startups, ranked IllinoisVENTURES as the best organization in gap funding for
third-party capital attraction in 2016.2
University-supported funds also include the University of Chicagos $20 million
Innovation Fund and $25 million Startup Investment Program. The former provides
funding for POC and early-business development while the latter supports early-stage
companies with Series A, or initial, funding. To further support emerging growth
companies,3 Chicago Booth Executive Program students and the Polsky Center for
Entrepreneurship and Innovation also collaborated to start the angel investment group
Hyde Park Angels. Since its inception in 2006, Hyde Park Angels has invested nearly
Similarly, Northwestern University has established two funds to accelerate growth
among university startups. The $10 million N.XT fund supports the commercialization
of research-driven technologies while the $4 million NUseeds fund supports early-
stage student-founded startups. Additional funding sources include the University of
Illinois at Chicago Chancellors Innovation Fund and Southern Illinois Universitys
Saluki Concept Fund.
Illinois Innovation Index Winter 2017 University Entrepreneurship: Illinois university startups surge to record level 9
 M A JOR SOURCES OF FUNDING
FOR UNIVERSIT Y STARTUPS

Proof Product Commerciali-

Research Early stage
of concept development zation

University of
Illinois at Urbana ILLIN O IS VENTU RES
Champaign

University of CHANCELLORS
INNOVATION
Illinois at Chicago
FUNDS

N.X T FU N D
Northwestern
University
N USE E DS

UC H I CAG O
The University STARTU P FU N D
of Chicago
IN N OVATI O N
FU N D

Southern Illinois SALUKI

University CONCEPT
Carbondale FUND

Federal funding I- CORPS SBIR/ST TR

ANGEL/VENTURE
Private funding INDUSTRY
CAPITAL

Source: ISTC

Company spotlight: Omnipointment

Founded by Illinois Tech undergraduate student Vinesh Kannan in early 2016,

Omnipoinment is a web and mobile platform that makes it easier for students to coordinate
their schedules. Unlike similar platforms, Omnipointments Collaborative Reports allow
instructors to track and improve team dynamics among their students. Shortly after
its founding, Omnipointment received seed funding from the Omaha-based accelerator
Straight Shot. It was also selected as a finalist at the Future Founders U.Pitch competition.
Now used by students at more than 60 universities, Omnipointment was recently named
a top eight digital student startup by Student Startup Madness and selected to pitch at this
years South by Southwest festival.

Illinois Innovation Index Winter 2017 University Entrepreneurship: Illinois university startups surge to record level 10
Illinois universities stepping up entrepreneurship initiatives
Universities around the state stepped up efforts to increase their offerings to
entrepreneurs in 2016. With these efforts paying dividends, we highlight some of the key
initiatives taking place across the state.

DePaul University
In 2016, the Coleman Entrepreneurship Center at DePaul University opened a new space
within its Chicago Loop campus, expanding resources available to DePaul entrepreneurs.
The Coleman Center also joined the Chicago 1871 incubator space and community,
allowing entrepreneurs greater access to Chicagos startup community.

Illinois Institute of Technology

The Illinois Institute of Technology (Illinois Tech) broke ground on the new Ed Kaplan
Family Institute for Innovation and Tech Entrepreneurship in 2016. This new space will
house unique facilities and equipment for entrepreneurs, including media labs, classrooms,
collaborative hubs, emerging technologies, and maker spaces. The Kaplan Institute will
also enhance the activities of Illinois Techs Entrepreneurship Academy, Jules Knapp
Entrepreneurship Center, and Idea Shop. Also contributing to Illinois Techs growth in
entrepreneurship is the groundbreaking IPRO initiative, which provides students with an
innovative and collaborative approach to real-world, project-based experiences.

Illinois State University

Illinois State University (ISU) continues to grow its entrepreneurship offerings through
the George R. and Martha Means Center for Entrepreneurial Studies, which supports
entrepreneurs at ISU and in the greater Bloomington-Normal community. This support
includes the yearly Startup Showcase and Means Center Accelerator Program, which each
aim to connect startups with support resources and help them develop connections with
potential investors, mentors, and the larger business community. ISU also announced a
new partnership with the Bloomington-Normal Angel Investor Network (BNAIN) in 2016,
bringing together innovation and capital investment to support the development of ideas,
emerging technologies, and businesses in the Bloomington-Normal community.

Loyola University
In 2016, Loyolas Quinlan School of Business launched the Urban Social Benefit Incubator.
Staffed with students, staff, and faculty from across the university, the incubator is
overseen by the leadership of Quinlans Loyola Business Leadership Hub. Services include
providing counsel, organizing resources, and creating strategic business plans to help
better serve target audiences in marginalized communities.

Illinois Innovation Index Winter 2017 University Entrepreneurship: Illinois university startups surge to record level 11
Northern Illinois University
Through its new and innovative entrepreneurship and social responsibility program,
Northern Illinois University (NIU) offers students an education in business, focused on
launching new ventures and fostering innovation and social impact. The program, which
provides students with hands-on entrepreneurship experience, internships, and access to
an extensive alumni network, was named a finalist in the Excellence in Entrepreneurship
Education Awards by the International Council for Small Business in 2016.

Northwestern University
Launched in June 2015, The Garage, Northwesterns hub for student entrepreneurship and
innovation, saw tremendous growth last year. Since inception, The Garage has incubated
more than 200 student-founded startups and seen more than 1,000 visitors each month
for classes, office hours, events, and workshops. In addition, The Garage offers students a
full-time residency program, including 24/7 access to office space, guidance from business
mentors, and weekly family dinners for student entrepreneurs. In addition to The
Garage, Northwesterns Innovation and New Ventures Office (INVO), the Farley Center for
Entrepreneurship and Innovation at the McCormick School of Engineering, the Levy
Entrepreneurial Institute at the Kellogg School of Management, and the Donald Pritzker
Entrepreneurship Law Center at the Pritzker School of Law all provide innovative
academic curricula and programs to support entrepreneurship.

Southern Illinois University

Southern Illinois University (SIU) continues to support entrepreneurs through the
Southern Illinois Research Park and Center for Innovation. This support includes the
University Innovation Fellowship Program and Saluki Ventures, which support
entrepreneurs with hands-on training, consulting services, and mentorship. SIU also
supports startups through the Small Business Incubator (SBI) program, housed in the
Dunn-Richmond Economic Development Center, which provides a full range of business
development assistance for entrepreneurs, including one-on-one consulting, workshop
and training events, and business plan development.

University of Chicago
In 2016, the University of Chicago established a newly expanded and unified Polsky Center
to increase opportunities for entrepreneurship education, venture creation, and research
commercialization. Made possible through a $35 million gift by University of Chicago
alumnus Michael Polsky, the center now includes the Polsky Exchange, which is providing
incubation space and a suite of programming and resources to better support and connect

Illinois Innovation Index Winter 2017 University Entrepreneurship: Illinois university startups surge to record level 12
entrepreneurial activity across campus and with Argonne National Laboratory and
Fermilab. Last year also marked the 20th year of the New Venture Challenge (NVC), the
universitys flagship capstone program to support new business creation, which was
recognized as the top-ranked university accelerator program in the nation by the Seed
Accelerator Ranking Project. The program has launched more than 160 companies and
now offers four tracks: traditional NVC, social NVC, college NVC, and global NVC. The
growth of the NVC, along with the addition of the Polsky Summer Accelerator and Polsky
Founders Fund Fellowship programs, have contributed to the University of Chicagos
significant increase in entrepreneurial activity.

University of Illinois at Chicago

The Innovation Center at the University of Illinois at Chicago (UIC) is a collaboration,
education, and incubation center helping connect student research with industry.
Focusing on interdisciplinary solutions for medical challenges, the UIC Innovation Center
aims to help students move from ideation to development.

University of Illinois at Urbana-Champaign

The University of Illinois has been adding nationally recognized entrepreneurship pipeline
programs to assist more students, faculty, and staff across departments in launching new
companies. These programs include UIUCs iVenture Accelerator, which gives
entrepreneurs the opportunity to work on their startups full-time during the summer,
with access to a co-working space, mentorship, and workshops. UIUC is also expanding
entrepreneurship curriculum by offering a new innovation, leadership, and engineering
entrepreneurship degree program. In addition, growing initiatives like the Cozad New
Venture Competition, Illinois Proof-of-Concept Funding Program (I-POC), and I-Start
Professional Service Assistance Program are all contributing to the growth of
entrepreneurship at UIUC.

Illinois Innovation Index Winter 2017 University Entrepreneurship: Illinois university startups surge to record level 13
 Part 3: Funding raised and access to capital

Commensurate with the increased number of startups founded in the past five years,
Illinois university startups have also raised more funding. Over this period, startups
established at Illinois universities have raised $628 million, compared with $345 million
from 2011 to 2015. 4 The increase in funding shown in our data represents an impressive
positive trend for university startups, especially given the decrease in venture capital
activity on the national level in 2016.5

Unlike previous years, from 2012 to 2016, the amount of funding raised by tech transfer
startups ($350 million) exceeded that raised by nontech transfer startups ($280 million).
The growth of funding for tech transfer startups was primarily driven by four biomedical
companies, Aptinyx, Corvidia, Exicure, and Revolution Medicines, which collectively
raised more than $200 million in 2016. The increase in funding raised by tech transfer
companies underlines the value of university research and its potential for
commercialization.

FUNDING A MONG TECH TR ANSFER AND

NON TECH TR ANSFER STARTUPS, 20122016
SBIR/STTR funding Other funding (including VC)

$25 million
Tech transfer
$324 million
129 startups

$7 million
Nontech transfer
$272 million
675 startups

Source: ISTC University Entrepreneurship Survey, SBA SBIR/STTR Database, Crunchbase, PitchBook
4 The actual figure for funds
raised from 2012 to 2016
is even larger, as startups
founded before 20112012
are not included even Although access to capital is often cited as a challenge for Illinois startups, 78 percent of
though they may have active university startups that received funding have remained in Illinois, illustrating the
raised capital in the past
five years.
potential for startups to raise capital in the state. University entrepreneurship funds that
5 4Q 2016 PitchBook- help startups bridge the funding gap between research and commercializationand
NVCA Venture Monitor,
attract third-party investmentare also playing a pivotal role in keeping these startups
PitchBook, January 11,
2017. in the state.

Illinois Innovation Index Winter 2017 University Entrepreneurship: Illinois university startups surge to record level 14
Despite these positive indicators, access to capital remains a challenge for growth-stage
startups. Companies that have raised more than $5 million in funding, well above the
$790,000 average, are still more likely to be located outside Illinois. Improving access to
capital for growth-stage startups in Illinois would make a significant difference in keeping
more successful startups in the state.

Company spotlight: BallotReady

BallotReady is a nonpartisan online voter guide to every race and referendum that allows
voters to be informed about their entire ballot. Started in Chicago in 2015, BallotReady
received foundational support from the University of Chicago Institute of Politics and the
Polsky Summer Accelerator program, and the company completed both the Polsky site
and national I-Corps programs. In addition, BallotReady received investment from the
University of Chicago Innovation Fund and the Harris Center for Policy Entrepreneurship,
along with funding from the National Science Foundation and the Knight Foundation.
Thanks in part to this support, BallotReady won both the John Edwardson 72 Social New
Venture Challenge and the University of Chicago Cognitive Computing Challenge. With
guidance from a bipartisan board of advisers led by Democrat David Axelrod and
Republican Mike Murphy, BallotReady is live in 12 states, covers more than 15,000
candidates, and has more than one million site visits to date. By the 2018 midterm
elections, BallotReady will cover every state, helping all citizens be more informed about the
votes they cast.

The critical role of I-Corps and SBIR/STTR funding

The federal government has played an instrumental role in serving as a catalyst for
developing and funding startups in the state and across the nation through a number of
key programs. One such program is the National Science Foundations I-Corps program,
which is designed to help entrepreneurs commercialize their innovations by validating
commercial opportunities, providing business training, and fostering connections to
private partnerships and additional funding.

I-Corps programs are facilitated through university sites and regional nodes. In Illinois,
both the University of Illinois at Urbana-Champaign (UIUC) and the University of Chicago
are I-Corps sites, with UIUC also serving as part of the Midwest node, along with Purdue
University and the University of Michigan. Over the past several years, the I-Corps
program has grown substantially in Illinois. In fact, the ISTC University Entrepreneurship
survey includes more companies formed in 2016 as a result of I-Corps participation than
in the previous four years combined.

Illinois Innovation Index Winter 2017 University Entrepreneurship: Illinois university startups surge to record level 15
In addition to assisting in the creation of startups, I-Corps is helping early-stage
university startups connect to vital Small Business Innovation Research (SBIR) and Small
Business Technology Transfer (STTR) funding. The SBIR and STTR programs are offered
by a number of federal agencies to encourage small companies to engage in R&D that has
the potential for commercialization. University startups formed through I-Corps from
2012 to 2015 were more than seven times more likely to receive SBIR or STTR funding
compared with companies that did not participate in I-Corps. This relationship between
I-Corps and SBIR/STTR funding is especially important as the state looks to increase the
amount of funding it receives from these programs. From 2012 to 2016, Illinois companies
attracted $214 million in SBIR/STTR fundingonly 14th among all states. The continued
growth of the I-Corps program in the state offers a clear path for improving those figures.

Company spotlight: Veriflow

Created by University of Illinois at Urbana-Champaign computer science faculty and PhD

students, Veriflow is the first networking company to use continuous network verification to
eliminate network outages and vulnerabilities. Veriflow developed and vetted its innovative
approach while receiving incubation support from EnterpriseWorks at the University of
Illinois Research Park. The startup also participated in ISTCs Corporate-Startup Challenge,
through which it secured a pilot project with Archer Daniels Midland. This past year,
Veriflow won the Barclays 2016 Open Innovation Challenge, beating out more than 100
global technology companies. And in 2017, Veriflow made it to the final 10 in the RSA
Conference Innovation Sandbox Contest for most innovative security startups.

Illinois Innovation Index Winter 2017 University Entrepreneurship: Illinois university startups surge to record level 16
Part 4: A detailed look at tech transfer
A DETAILED LOOK AT TECH TR ANSFER
Tech transfer is the process by which university research becomes commercial products and services,
often resulting in the creation of new startup companies. This process typically involves three key steps: the
disclosure of a new technology made possible through university research, the protection of the
technology through patents or copyrights, and the eventual commercialization of the technology via
licenses or options.

Illinois universities are in the top ten nationally in both technology disclosures and patents, while also
collecting significant income from licensing deals. This strength is led by the University of Illinois system,
which ranks in the top 15 nationally in both disclosures and patents. Despite these notable strengths,
Illinois has been outpaced by the national average in the growth of disclosures, patents, and licenses over
the past five years.

Disclosures Patents Licensing/options

212 160
706
patents issued in 2015, licenses and options, 17th
9th in the nation in the nation, 2015

13.4% 13.0%
technology disclosures
in 2015, 10th in the nation

growth compared with decline compared with

44.3% nationally, 2011 33.9% nationally, 2011

3.4%
growth compared with
14.0% nationally, 2011
88.7
patents per $1 billion R&D
investment compared with
88.5 nationally, 2015
4.8%
of licenses/options brought
in more than $1 million
compared with 3.4%
nationally, 20112015

295
disclosures per $1 billion
R&D investment compared
with 322 nationally, 2015
27.4% $1.18
of patent applications billion in licensing income,
successful compared with 2nd in the nation, 20112015
25.4% nationally,
20112015

Source: Association of University Technology Managers (AUTM)

Illinois Innovation Index Winter 2017 University Entrepreneurship: Illinois university startups surge to record level 17
 Part 5: Illinois alumni continuing entrepreneurship

Although more students are choosing to pursue entrepreneurial activities while on campus,
Illinois also has a growing base of alumni entrepreneurs who have launched companies
later in their careers. To assist them, Illinois universities are stepping up initiatives to
increase entrepreneurship offerings to alumni. These efforts include welcoming alumni
into on-campus entrepreneurship programs, providing online curriculum, connecting
potential entrepreneurs with active startups, providing workshops, and establishing local
entrepreneurship groups around the country.

To examine the extent of entrepreneurship activity among Illinois alumni, the Index
partnered for the first time with PitchBooka leading provider of startup and venture
capital data. From 2012 to 2016, alumni from Illinois universities founded 1,106
companies and raised more than $9 billion in capital. In addition, PitchBook ranked
Northwestern University, the University of Chicago, and the University of Illinois at
Urbana-Champaign among the most proficient global producers of alumni entrepreneurs.6

DEGREE FIELDS AND LEVEL S A MONG

FOUNDERS FROM ILLINOIS UNIVERSITIES ,
20122016, %
Computer science 9.3%

Economics 4.7%

Electrical engineering 3.4%

Finance 3.0%

Mechanical engineering 2.0%

Computer engineering 1.8%

Law 1.4%

Political science 1.4%

Entrepreneurship 1.1%

Marketing 1.0%

620152016 PitchBook
Mathematics 1.0%
Universities Report,
PitchBook, September 24,
Source: PitchBook
2015.

Illinois Innovation Index Winter 2017 University Entrepreneurship: Illinois university startups surge to record level 18
 Alumni startup founders from Illinois universities hold degrees in more than 400
concentrations. And with no single field making up more than 10 percent of the degrees
received, its clear that Illinois entrepreneurs come from many backgrounds. About half of
the top ten degree fields were in STEM, with both computer science and engineering
well-represented.

About the research

Illinois universities make a tremendous impact on innovation and entrepreneurship through a broad
sweep of programs and initiatives. As a result, quantifying the scope of university-aided
entrepreneurship is difficult. To take on this challenge, the Index approaches this task from several
angles:

First, ISTCs yearly University Entrepreneurship Survey is used to create a database of startup
companies founded in the past five years by current students, faculty, and staff of Illinois universities.1
This database includes self-reported data such as company founder, year founded, company location,
and total funding raised. To ensure that all available and accurate information is included, responses are
vetted against established startup databases Crunchbase and PitchBook, as well as National Science
Foundation and Small Business Administration databases.2

Second, the Index tracks the technology transfer (tech transfer) process as university innovations move
from discovery to commercialization. Data on tech transfer at Illinois universities comes predominantly
from the Association of University Technology Managers (AUTM) Licensing Survey, as well as data on
company formation from ISTCs University Entrepreneurship Survey.

Last, for the first time since we began measuring university entrepreneurship, this issue of the Index
also highlights the role of companies started by alumni of Illinois universities through data provided by
PitchBook. This includes data on company formation, capital raise, and degrees held by founders.

1 The ISTC Entrepreneurship Survey was sent to 12 Illinois universities. Respondents to this years survey include the Illinois Institute

of Technology, Northern Illinois University, Northwestern University, Southern Illinois University, the University of Chicago, the
University of Illinois at Chicago, and the University of Illinois at Urbana-Champaign.
2 Although we believe the ISTC University Entrepreneurship Survey provides the most comprehensive data on university startups
available, it cannot capture the entirety of university startup activity. Therefore, the findings presented in this Index are best
estimates based on the latest available information.

Illinois Innovation Index Winter 2017 University Entrepreneurship: Illinois university startups surge to record level 19
Conclusion

Since the ISTC University Entrepreneurship Survey began in 2013, Illinois universities have
recorded steady growth in startup production. In 2016, that growth reached record heights.
Through ever-increasing university resourcessuch as incubators and tech parks, startup
funds, and innovative curriculumstudents, faculty, staff, and alumni have access to more
entrepreneurial resources than ever before. Universities are also making a more concerted
effort to track their startup companies, ensuring startups that may have previously slipped
through the cracks are now receiving the resources they need to be successful.

With universities producing startups at record levels, its now up to the state to provide
these companies with the resources they need to stay in Illinois and help expand the
states economy. For early-stage companies, the continued growth of the National Science
Foundations I-Corps program is critical to provide startups with valuable mentorship and
connections to further funding, such as SBIR/STTR. In addition, though Index research
demonstrates the potential for startups to raise significant funding in Illinois, too many
growth-stage startups are still leaving the state in search of funding. To encourage those
companies to remain in Illinois, its critical for the state to expand initiatives that connect
growth-stage startups with potential funders.

The state should also make strategic efforts to connect companies with Illinois growing
non-university entrepreneurial community. This ecosystem includes Illinois network of
focused incubators, accelerators, and organizations dedicated to supporting and funding
entrepreneurssuch as Built in Chicago, Clean Energy Trust, Energy Foundry, iBIO
Institute, the Illinois Technology Association, and facilities such as 1871, MATTER,
mHUB, and TechNexus. Facilitating handoffs between university and non-university
entrepreneurial resources can help ensure startups have consistent support as they grow.
And connecting entrepreneurs to Illinois vast corporate communitythrough innovative
programs such as ISTCs Corporate-Startup Challengeis essential to supporting and
increasing the number of Illinois entrepreneurs.

Illinois Innovation Index Winter 2017 University Entrepreneurship: Illinois university startups surge to record level 20
illinoisinnovation.com/innovationindex

The Illinois Innovation Index is Partners:

brought to you by:
Association of University
Illinois Science Technology Managers
& Technology
Coalition

PitchBook Data

Cover illustration by Dieter Braun.

Copyright 2017. All rights reserved.