The Hard-Earned Lessons of Academic Entrepreneurs

When you hear the word “startup,” what do you think of? Is it the stereotypical image of a lone founder or two in their parents’ garage, dropping out of college with nothing but passion, a bit of seed money, and a wild dream to “make the world a better place?” A Steve Jobs or a Mark Zuckerberg?

Of course, that does happen—but the lone dropout founder approach is more myth than reality, and there are many ways to go about building a startup in the modern world.

A growing type of founder profile is the faculty founder. Though it is not new—Genentech, the first biotech company, was a startup co-founded in 1976 by UCSF biochemist Herbert Boyer—academics are spinning more and more companies out of their labs.

Following the money really showcases this trend. According to analysis by Global University Venturing, the number and amount of financings for university startups globally in the past decade has doubled. At its peak in 2021, before economic headwinds put a damper on the whole market, university startups around the world raised $41 billion.

This trend, and some lessons that can be learned from it, can be found in the microcosm of Duke’s startup activities.

“Interest in entrepreneurship among Duke faculty has increased dramatically since the 2010s,” said Robin Rasor, associate vice president for translation and commercialization at Duke. “We’ve been lucky to attract some top-notch researchers who also have managed to be very successful at spinning out companies.”

Rasor’s office has helped Duke academics launch dozens of companies in recent years, with more than 120 active startups raising over $1.7 billion in capital over the past five alone. Eighteen have had successful exits in that same timeframe.

These startups are more than just numbers, however: They’re stories of struggle and success from unique academic founders who have learned many lessons along the way.

“Every university technology and startup is unique, but they all face some similar challenges,” said Jeff Welch, director of Duke New Ventures. “The two main challenges are: How do we build the right team and how do we raise enough money to create recognizable value?”

How academic entrepreneurs work through these challenges with their startups varies, too.

“There’s a continuum of involvement,” said Rasor. “Some professors are very hands-on throughout, while others are there at the very beginning but quickly pass off the torch to graduating PhD students or other professional management.”

The Light Touch Model

“My model is to start quietly,” said Ashutosh Chilkoti, the Alan L. Kaganov Professor of Biomedical Engineering. “I like to do the value creation in my lab.”

Incubating technologies stealthily in the lab lets Chilkoti more freely explore possible applications for his technologies, which focus on bespoke polymers engineered for various biotech uses. Chilkoti has spun five companies out of his lab: Sentilus, PhaseBio Pharmaceuticals and Isolere Bio, which all had successful exits; inSoma Bio, which is currently in progress; and Gateway Bio, which is still in stealth mode. 

“If you have technology that goes in different application areas, set up different companies—lesson number one,” said Chilkoti.

PhaseBio, Isolere, and inSoma are all based around a platform called elastin-like polypeptides (ELPs), a biopolymer that transitions from liquid to an elastic solid when the temperature rises.

He’s speaking from painful experience. Originally, all intellectual property for ELPs was licensed to PhaseBio, but they were focused on only one use case: drug delivery. PhaseBio was doing well and went public in 2018, but it hit economic headwinds, and a poorly-structured debt financing tanked the company.

This was a decade after Chilkoti had much of anything to do with the company, since he adheres to the “light touch” model of spinning out a company. He was able, however, to claw back the intellectual property for other applications.

Graduate students play a critical role in Chilkoti’s light touch brand of academic entrepreneurship. Technology applications are usually championed in the lab by grad students and postdocs, who then become the leaders of the spinout, like PhD graduates Kelli Luginbuhl steering Isolere and Stefan Roberts helming inSoma. Chilkoti advises the companies but is not part of their C-suite level teams.

“The fun is that I learn from them,” said Chilkoti. “Soon, they’re way more sophisticated about some of the business things. So, it keeps me intellectually engaged.”

The Involved Advisor Model

“I consider myself a low-to-moderate entrepreneurially engaged faculty member,” said Aaron Franklin, the Addy Professor of Electrical and Computer Engineering.

About seven years ago, his lab developed a sensor technology to better measure the thickness of car tires. They spun out a company, Tyrata, and Franklin joined the team as chief technology officer.

“That came at a significant cost that I,” he chuckled, “sort of knowingly took on. But things are always a little different than what you may initially anticipate them to be in terms of time commitment and mental balancing.”

He doesn’t regret it, though, and credits a six-year CTO stint until the company’s acquisition in late 2023 as a great learning experience. A key takeaway from Franklin’s journey for academic founders, especially first-time founders like himself: up your communication game. 

“Love it or hate it, it is a reality that you can have the most impactful scientific results in history, but if you do not message that well and get it to the right audience and put it together in the right fashion, it will have minimal impact,” said Franklin.

That sentiment was echoed by Ken Gall, professor of mechanical engineering and materials science, who Franklin described as someone who “lives, breathes, sleeps and eats entrepreneurship.”

Gall compared the difference in touting the technical findings of a paper published about a technology versus saying the same technology was implanted in 10,000 patients and made a difference in peoples’ lives. One grabs the attention of an investor—and nobody needs to be told which one.

“It’s hard to sell basic science to investors,” said Gall. And it is very different from selling your work to a research grant committee.

“With a grant, you’re laying out this meticulous plan that’s reviewed behind the scenes and then they just tell you yes or no in a review document. With an investor, you talk face-to-face, and they give you a very small window to teach them why they should put their money in. And then they want their money back plus some.”

Gall would know—as a serial entrepreneur specializing in implantable medical devices, he’s had many of those conversations. When asked to list all the startups he’s been involved with, Gall had to refer to his notes. He counted ten, with several successful exits including Vertera Spine, MedShape and InnAVasc.

Gall has several startups cooking now, but his most involved pursuit is as a board member and leader at restor3d, a 3D-printed orthopedic implant startup that recently closed a $70 million financing round. Over the years, he’s figured out how to juggle professorial duties with his passion for entrepreneurship, but he concedes that it’s no cakewalk.

“I think some people underestimate it,” said Gall. “Sometimes, it’s overwhelming.”

He suggests riding the ebbs and flows of the academic calendar—for example, Gall is on a nine-month appointment, so his summers are more flexible—and maximizing your allotted consulting time for your startup activities. A sabbatical year may be a good option as well, he said. “That’s a great way to test the waters.”

The All-In Model

Some people, though, prefer to dive right in.

Sonia Grego, an associate research professor of electrical and computer engineering, had been working on a smart toilet technology with fellow research professor Brian Stoner and colleagues for a few years when a major toilet manufacturer approached them with interest in licensing the technology.

“We really did not sleep much,” said Grego, recounting the team’s late-night fretting over whether to license the technology to the manufacturer or to start their own business. After much discussion, especially with a group of Duke alumni advisors, who offered some pre-seed money for a startup, Grego and team founded Coprata in 2021.

The team has been prototyping and pivoting their technology over the past few years, gathering customer feedback and ramping up pilot studies. 

“It’s been full immersion and fundraising,” said Grego. “We’re building the plane as we fly it.”

Grego’s model of entrepreneurship is at the highest level of involvement, as she recently assumed the role of chief executive officer.

“My lesson here, and the challenge, is that nobody cares about the company as much as I do,” said Grego. “And as a scientific founder for this space, I’m the one that knows the problem best, that can speak with clinical partners to identify the needs, that can shape the tech into a solution.”

Grego highlights hiring challenges as something academics should be prepared for if they’re thinking of doing a startup. When she posts an opening in her lab, Grego says she gets many great candidates. For her young startup? Not so much.

“Not everyone is comfortable with the demands and risks of a startup environment,” said Grego. “Finding a good fit is important and may take time.”

The hiring process, the business jargon, the endless fundraising. Grego has been picking up all these skills and more in what she characterizes as a steep but highly rewarding learning curve. For support, she leans on people she trusts: Stoner, one of her co-founders and an academic collaborator for over 20 years; a team of skilled engineers and experienced advisors that she has attracted; and the ecosystem of Duke entrepreneurial experts.

“We are in the thick of it,” said Grego. After a beat, she added with a laugh, “And on the cusp of greatness, of course!”

Building for the Future

Launching a university spinout used to be a lonely experience. “I was on an island,” reminisces Gall of his earlier entrepreneurial ventures as a nontenured assistant professor.

Nowadays, universities like Duke provide much more support for their academic entrepreneurs. Serial entrepreneurs like Gall and Chilkoti have helped to build out more programs while in departmental leadership positions, such as the Duke Engineering Entrepreneurship Program and the Duke BRiDGE incubator. And more alumni are engaged, either directly with faculty founders or through organizations like Duke Capital Partners.

But it’s important not to forget that you are, first and foremost, an academic.

“Do the best science,” said Chilkoti. “Then, if your science leads to something that could be commercialized, don’t be afraid to go for it.”

That commercialization can lead to all kinds of new interesting basic science back at the university.

“The problems we encountered in trying to commercialize our materials drove all kinds of new basic science questions that we researched, received grants and published papers on,” said Gall. “We didn’t publish on devices, we published on the basic materials science.” 

First-time founders like Franklin and Grego have benefitted from the growth in entrepreneurial culture and community at Duke, learning from those with more experience and supporting each other through the rollercoaster ride of startup life, whichever model they choose to follow.

“For Duke Engineering and for Duke overall, there’s an impressive precedence of success that is exemplary of having really good support arms in place,” said Franklin.

“This has been an amazing experience,” said Grego. “I understand now why people are serial entrepreneurs.”