Universities around the world produce remarkable research. Most of it never becomes commercial products. The gap between lab breakthrough and market success remains enormous, despite decades of effort and billions spent.

I’ve worked on both sides of tech transfer - as an investor looking at university spinouts and as an advisor to tech transfer offices. The problems are structural, and fixing them requires more than better processes.

The Problem

The statistics are stark. Most university inventions are never licensed. Most licenses produce minimal revenue. Most university spinouts fail.

A few outliers (Stanford, MIT, Cambridge) generate significant returns. Most universities spend more running their tech transfer operations than they earn from them.

Why?

Incentive misalignment. Academics are rewarded for publications and grants, not commercial outcomes. Taking time away from research to work on commercialization is career-negative for most faculty.

Timing mismatch. Research that generates patentable inventions is often too early for commercial application. The gap between “interesting science” and “viable product” is measured in years and millions of dollars. Universities can’t fund that gap.

Skill gaps. Tech transfer offices are typically staffed with people who understand patents and licensing but not company building, product development, or market validation. They’re not equipped to actually commercialize anything.

Deal terms. Universities often demand excessive equity stakes, royalty rates, and control provisions that discourage investors and partners.

Patent quality. Many university patents are written to protect research findings rather than commercial applications. They’re broad and early, which sounds good but often means they’re hard to enforce and easy to design around.

What Actually Works

Despite these problems, some technology does transfer successfully. What distinguishes success?

Founder commitment. Technologies that commercialize successfully almost always have a faculty member or student committed to leaving academia (at least temporarily) to focus on the company. Licensing to external parties without an internal champion rarely works.

Early market engagement. Successful spinouts identify potential customers before they’re really companies. They validate that someone wants what they’re building before they build it.

Realistic expectations. Universities that treat licensing revenue as bonus income rather than a primary funding source have healthier relationships with spinouts and licensees.

Flexible deal structures. Institutions willing to negotiate reasonable terms attract more partners and create more value than those with rigid, extractive policies.

Dedicated funding for development. The valley of death between research grant and VC investment needs bridge funding. Universities or regional funds that provide this see more successful commercialization.

Emerging Models

Some new approaches are gaining traction:

University-affiliated venture builders. Rather than just licensing technology, some institutions are building dedicated teams that work full-time on commercializing the most promising inventions. These teams provide the entrepreneurial capacity that academics lack.

Proof-of-concept funding. Programs that provide small grants ($50-250K) specifically for bridging the gap between research and product. Unlike research grants, these funds focus explicitly on commercial validation.

Entrepreneurs-in-residence. External entrepreneurs embedded in universities who can take promising technologies and run with them. This addresses the faculty commitment problem.

More investor-friendly terms. Some universities have moved to standardized, lighter-touch term sheets that make it easier for spinouts to raise capital.

Industry-sponsored research with clear IP paths. Research partnerships structured from the start with commercialization in mind, rather than trying to commercialize after the fact.

For Innovation Managers

If you’re looking to access university technology:

Build relationships before you need them. Cold-calling a tech transfer office rarely works. Build ongoing relationships with relevant research groups. Sponsor research. Participate in advisory boards.

Go direct to faculty. Tech transfer offices are the formal channel, but researchers know their technology best. Start conversations with faculty and loop in tech transfer once there’s mutual interest.

Be specific about your needs. “We’re interested in AI technology” is too vague. “We have a specific problem with inventory forecasting and want to explore ML approaches” is actionable.

Budget for development. University technology is rarely ready for deployment. Plan to invest in development work between license and product.

Consider multiple engagement models. Licensing isn’t the only option. Sponsored research, consulting arrangements, student projects, and joint ventures can all be effective depending on the situation.

For Researchers

If you have technology you want to commercialize:

Start with the problem, not the technology. Who has the problem your technology solves? How do they solve it today? Would they pay for a better solution? Answer these questions before focusing on the technology.

Talk to potential customers early. Leave the lab and talk to people who might use your technology. This feels uncomfortable for researchers, but it’s essential for commercialization.

Consider your own commitment level. Are you willing to step back from academic work to focus on commercialization? If not, you need to find someone who will be the company’s champion.

Understand your institution’s terms. Know your university’s IP policies and standard deal terms before you have something to negotiate. Push for reasonable terms if the standards are extractive.

Build a team beyond yourself. Technical excellence isn’t enough. You need people with business, marketing, and operational skills. Find them early.

The Bigger Picture

Tech transfer is a system problem, not an individual problem. Individual researchers, tech transfer officers, and investors are all responding rationally to their incentives. Those incentives are misaligned.

Fixing this requires policy changes - how researchers are evaluated, how tech transfer offices are funded and measured, how universities think about their role in economic development.

Some progress is happening. More universities recognize that aggressive deal terms produce worse outcomes than reasonable ones. More research funders are requiring commercialization plans. More investors are learning to work with academics.

But the fundamental tension remains: universities are optimized for knowledge creation, not value creation. Commercialization will always be somewhat awkward until that changes.

For practitioners working in this space, the path forward is working around these structural limitations while pushing for gradual improvement. Successful tech transfer is possible; it’s just harder than it should be.