TitleResearch to Commercialization Gap Fund Request Date2012-11-26
DepartmentVice President of Research, Technology Transfer Office
RequestorRebecca Mahurin, Ph.D. Director, Technology Transfer Office Phone(406) 994-2752
Campuses Bozeman Billings Havre Great Falls FSTS Extension MAES
Cross Depts  
Proposed Dates Start: July 2013 End: June 2016
If funded, this proposal would establish a research-to-commercialization gap fund. The purpose of such a fund is to increase the commercial potential of university developed intellectual property through the funding of short-term, low-dollar research activity. All dollars provided to this fund will be granted to researchers to conduct focused, industry influenced research which will push the underlying invention closer to commercialization. Successful completion of gap funded research will greatly increase the possibility of knowledge transfer through licensing to industry and the generation of Montana-based start-up companies.
This proposal mainly addresses Discovery and Integration activities as outlined in the MSU Strategic Plan. Specific areas where this proposal supports the strategic plan are listed immediately below.

Strategic Plan Metric D.1.1: This proposal adds to the list of available resources that MSU uses to both attract and retain faculty of national and international recognition. More than 80 US institutions have gap funds. Given the competitive environment for attracting high quality faculty, the addition of a gap fund to push research closer to commercialization is imperative.

Strategic Plan Metric D.1.2: This proposal directly increases the potential for national and international recognition of MSU faculty as it furthers research/commercialization activities. This metric is based on peer reviewed publications, invited presentations, journal citations and technology transfer activities. Gap funding activities have been shown to positively impact each of these activities.

Strategic Plan Metric D.2.2: This strategic plan component calls for an increase in grant-sponsored investment. Gap funding will further invention development which will allow for stronger follow on grant requests from federal funding agencies and non-profit entities. Gap funding will also greatly increase the potential for attracting industry sponsored research. Subsequent grant proposals will also be strengthened by the inclusion of the results generated by this additional funding.

Strategic Plan Metric I.1: Integration of learning, discovery and engagement will be fostered by this proposal. Gap funding activities will center on the financing of additional translational research research which in many instances will be performed by students under the direction of a faculty PI. This is a good example of integration the learning of new research techniques, discovery of data necessary for commercialization and engagement with industry.
Funding Type: One-Time Only Funding Base (3-yr Recurring) Funding
  FY13 FY14 FY15 Base ($) OTO Startup ($)   FTE;
Materials & Supplies              
Contracted Services              
Capital       45000       
Other Operations              
TOTAL 45000     
Please comment, if necessary, regarding cost and requirements.

The budget assumes funding of three research-commercialization projects per year at an average of $15,000 per project.  The total three year request is for 3 X $45,000 = $135,000.  All dollars will flow to research/commercialization activities.


Flow Chart

Describe the Proposal

This proposal covers the establishment of a gap fund.  A gap fund is generally defined as monies managed either internally or externally to the research institution to bridge the funding gap between federal funding of research and ‘first money’ from invention licensees, entrepreneurs or other external sources. Universities have developed gap funding programs to augment their traditional technology transfer processes and thus increase and accelerate commercialization. Gap funds vary widely in size, structure, approach, and commercialization priorities, but can be generally segmented into four primary fund types: (1) translational research, (2) proof-of-concept, (3) business formation, and (4) business growth. Funding typically is distributed in the form of grants or investments that range from as little as $5,000 up to $1 million. 

The gap fund herein proposed will target translational research and proof of concept work – those activities to be performed by MSU faculty inventors that will increase the probability of successful commercialization.  Examples of translational research include the proving of the technology or inventions in a more industrial setting or application, performing toxicological tests for drug candidates or limited large animal testing.  Proof-of-concept examples include prototype development, scalability tests and other reduction-to-practice activities. 

A 2011 survey of 63 university gap funds revealed a number of benefits, including higher rates of invention commercialization, improved success in securing both additional grant funding and early-stage capital, and the furthering of a local entrepreneurial ecosystem. With regard to this last point, a critical benefit of the gap fund is the cultivation of an ecosystem that supports researchers and entrepreneurs by helping them address specific goals and requirements at each stage in the commercialization process.  The chart below shows where gap funds fit relative to the limited additional funding options.



The Vice President for Research - through the Technology Transfer Office - will invest limited funds to advance the development of novel applied inventions that have near-term potential for licensing and commercialization. The gap fund is not intended to support basic research, but rather it will support activities:

•            To advance inventions through the development of prototypes or through final proof of concept that have already demonstrated potential commercial appeal and for which the university has applied for IP protection (at least a provisional patent); or

•            To expand work on promising new translational research, at the disclosure stage, for which a patent application has not been fully developed but that has near-term commercial potential.

The diagram below describes, at a very high level, the traditional invention-commercialization process on campus and what this proposal is intended to accomplish.  Too many university inventions progress along route A – B – C and end up in category 3 where the invention is abandoned and all commercialization efforts are halted.  Often, a relatively small amount of additional research activity  – activity influenced by market information – can mean the difference in this invention ending up in categories 1 or 2.  This activity is shown in box A.1. It can mean the difference in jobs created by the invention licensee, revenues back to MSU and the development of a product which benefits society.  

Process Diagram

Describe the broader impacts and benefits of this proposal

Increased potential for new start-up businesses based on MSU inventions: Currently, half of the licenses executed by MSU are to Montana based companies and Montana firms are a preferred licensing population for the TTO.  Enhancement of university inventions through the establishment of this gap fund will create more licenses and collaborations with Montana companies.  This has the effect of increasing high-paying jobs in cleaner industries, diversifying the economy and creating Montana tax revenue.

Increased potential to leverage the MSU’s Innovation Campus: With the further development of the Innovation Campus, we fully expect that those start-up companies, licensing MSU inventions, will locate near campus to gain better access to researchers and MSU infrastructure.  We see this proposal as highly synergistic with all efforts in development of the Innovation Campus.

Opportunities to include students in translational work under the gap funds: This proposal funds additional research activity.  As such, it creates additional and enhanced (applied) research for students working under supervision of a Principal Investigator.  The research to be funded will include input from industry advisors and thus students will have the opportunity to work in a more ‘real world’ environment – one driven by outside goals.  Because students (graduate and undergraduate) will be involved in projects directly influenced by industry, they will have opportunities to interact with industry which will open up internship and career opportunities.

Attracting new faculty to MSU: Establishment of a gap fund will make MSU more attractive to faculty and graduate students.  In this way, establishment of the fund is seen as a competitive advantage relative to other institutions.

Faculty, the implementers of research activities driven by these awards, will gain closer connections with industry which will pay off in increased sponsored research opportunities, consulting engagements and advising.  The further research will also lead to more publications, research presentations, invention disclosures and patents.

Opportunity for student driven entrepreneurship: By definition, gap funds increase the commercial potential of university inventions.  As a parallel activity, the TTO currently works with the College of Business in supplying MSU inventions as the basis for their Business Plan Development class.  Further developed inventions through gap funding will increase the possibility of students putting their business plan into action – starting a business. 

Maintain competitiveness of MSU: A 2011 survey mentioned above indicated 63 universities with gap funds.  That number now exceeds 80.  This implies that MSU is at a competitive disadvantage to peer universities in disseminating knowledge through the technology transfer process, creating valuable relationships with industry and stimulating our local economy.  

Supporting comments from MSU faculty specific to this proposal

"Currently, we have an invention (hydrogel mechanical loading device) that is likely going to have the licensing fail because we have not had the personnel available to drive the project forward.  Our confocal loading device generated substantial interest from companies, but we have thus far been unable to generate publication-quality data at a rate fast enough to garner a publication before the patent must be filed.  Gap funding would have enabled this to happen.  With the generally-low level of financial support campus-wide, improving the chances for technology transfer to succeed is one way to generate additional dollars that stay here at MSU-Bozeman." – Ron June, Ph.D. Assistant Professor, Mechanical and Industrial Engineering

The novel Glutenin alleles are being crossed into high protein hard wheat germplasm to test to what degree extensibility can be improved.  Requested funds would be used to genotype the segregating populations and measure dough extensibility and mixing properties.  Demonstration that the extensible Glutenin alleles improve dough processing in different wheat backgrounds will increase the attractiveness of this discovery to wheat breeding companies.   Past funding for this project was from the Montana Board of Research and Commercialization Technology but funding from that source is no longer available.  Current USDA funding priorities do not include funding for the genetics of grain quality and thus opportunities to fund testing of this discovery are rather limited. – Michael Giroux, Ph.D. Professor, College of Agriculture

A $15K support for the development of the BiyoTrap would be very timely right now.  We plan to hire an undergraduate student committed to developing the BiyoTrap. The student will work under the direct supervision of Mark Wolfenden, Iwona Beech  and  myself, and his/her focus will be on quantifying the capture rate of the BiyoTrap starting from low concentrations (~10 bacteria/mL) of pathogenic bacterial contamination. We will commit additional support from our ONR funding as well as ICAL resources to enhance the support from the Strategic Investment Funds from the MSU Budget Office.  Our plan will involve a three-pronged approach: we will quantify the BiyoTrap rate in low-concentration mono- and mixed culture mixtures in three different environments—contaminated water, contaminated fuel and contaminated seawater—using E. coli, Salmonella, Marinobacter and Desulfovibriospecies. Upon completion of the research we expect to (a) specify the rate of capture of nonspecific organisms from a given liquid for a given BiyoTrap preparation and a given rate of flow through the BiyoTrap device, (b) determine the limit of detection of the BiyoTrap, and (c) have a method applicable to quantifying trace amounts of bacterial contamination in a given liquid. The $15K will be used for an undergraduate student salary at a rate of $9-10/hr depending on experience. The money for consumables, necessary equipment, and user fees associated with the use of ICAL instrumentation will be paid from current funds available to us from other sources. Recep Avci, Ph.D.  Research Professor, Department of Physics


Implementation Plan


MSU Bozeman faculty will be eligible to submit proposals in any field of study. The intellectual property (patent, copyright work, or proprietary knowledge) and prospective product or invention must either address a need in the marketplace and have a competitive advantage over pre-existing products or involve new product/market development. The proposed work must be completed within six months with a possible one-time only six-month extension. The proposed work must be directed toward product or invention development or testing that will lead to commercialization. Proposals that are unsuccessful on the first submission can be resubmitted two additional times (initial submission plus two). 

Selection Criteria

Proposals will be reviewed by a committee of TTO staff and external reviewers. The primary criterion that will be used for evaluation of proposals by the committee is the commercial merit of the proposed project. The following criteria, as well as other factors as special circumstances dictate, also will be considered.

  1. The applicant's training, past performance, and estimated potential for future accomplishment.
  2. The probability that the proposed activity will lead to commercialization and licensing.
  3. Evidence that, when possible, the applicant has sought or will seek additional external sources of support.
  4. Evidence, when applicable, that gap funding is not a duplication of other internal or external funding.
  1. Evidence that requested funds will advance the commercial development of the proposed invention.  A letter of support from industry will be heavily weighted.
  2. The applicant’s comprehension of the market space and competitive landscape to be targeted.
  3. The feasibility of the proposed research or description of the licensing partnership to be pursued.

The gap fund proposal form will include a project plan, budget and a task plan to address key questions or barriers to commercialization.  Due diligence will be conducted by TTO staff.  In addition to the standard due diligence report, TTO will:

  • Identify potential licensees and help to determine additional research that needs to be done
  • Receive written ‘interest’ from prospective licensee(s)
  • Refine costs/budget with faculty
  • Review gap funding research progress and provide guidance on how the research is addressing the task plan


Year One

Year Two

Year Three

Number of Awards (est.)




Amount of Awards ($)




Total Awards ($)





Implementation Time Line

Quarter 1

Quarter 2

Quarter 3

Quarter 4

Announce Availability of Funds, Begin Awareness Campaign1

Refine Screening Tools 2

Possible Second Funding Event

End of Year Report

Refine Eligibility Requirements

Begin screening of opportunities (ongoing)


Possible Third Funding Event


Begin due diligence (ongoing)


Review Six Month Reports from PI’s


Possible First Funding Event




Quarter 5

Quarter 6

Quarter 7

Quarter 8

Possible Fourth Funding Event

Possible Fifth Funding Event

Possible Six Funding Event

End of Year Report

Review Six Month Reports From PI’s

Review Six Month Reports From PI’s

Review Six Month Reports From PI’s

Review Six Month Reports From PI’s

Provide Updates to Prospective Licensees

Provide Updates to Prospective Licensees

Provide Updates to Prospective Licensees

Provide Updates to Prospective Licensees


Quarter 9

Quarter 10

Quarter 11

Quarter 12

Possible Seventh Funding Event

Possible Eighth Funding Event

Possible Ninth Funding Event

End of Year Report

Review Six Month Reports From PI’s

Review Six Month Reports From PI’s

Review Six Month Reports From PI’s

Review Six Month Reports From PI’s

Provide Updates to Prospective Licensees

Provide Updates to Prospective Licensees

Provide Updates to Prospective Licensees

Provide Updates to Prospective Licensees


1. Awareness Campaign

1.     Develop web page and host on TTO Site

2.     MSU Today Announcement (quarterly)

3.     Email push to Department Head (bi-annual)

4.     Press Release (at start of awareness campaign and upon any funding event)

5.     Contact faculty who have a current disclosure into TTO (at start of awareness campaign)

6.     Develop content for and conduct informative seminar (with webinar capability for other campuses)

2. Develop Screening/Assessment Tools (utilize VC due diligence methodology, borrow from other university gap funding programs)

Assessment Plan

Return on investment will be in the form of both soft returns and hard dollar returns although prediction of those returns is naturally difficult.



Soft Returns

Enhanced relevance and visibility of research

Press articles generated as tracked by MSU Comm.

Enhanced serv. to the university community

Increases in gap funding proposals year over year

Strengthened recruiting of faculty and graduate students

Incidence of new hires who mention the gap fund as a factor

Maximizing societal impact

Licensed inventions



Hard Returns

Incidence of follow on federal funding

Federal research funding following gap funding

Incidence of sponsored research funding

Sponsored research agreements following gap funding

Increased up front licensing fees

Average fee of gap licenses v. non-gap licenses

Increased royalties

See Above

Greater percentage of recouped patent fees

See Above

If assessed objectives are not met in the timeframe outlined what is the plan to sunset this proposal?

We fully expect the objectives to be met.  Gap funds have been proven to work across universities.  Unless additional funding is found, this plan naturally sunsets at the end of year three.

Dean/Director: Rebecca Mahurin (
Executive/VP: Tom Mccoy (