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SC Launch! forms nonprofit organization
By Shelia Watson
Contributing Writer
The South Carolina Research Authority’s revamped innovation center concept, renamed SC Launch!, has incorporated into a nonprofit 501c3 organization and formed a board of directors that will provide governance and oversee investments of the program.
Jim Stritzinger, president of SC Launch! Inc. and executive vice president of the SCRA’s Public Interest Research division, said the articles of incorporation and bylaws were approved last month. He said the transfer of the encumbered cash and assets from the SCRA to the organization are in process.
The South Carolina Innovation and Research Centers Act, passed by the state Legislature last year, launched innovation centers at each of the state’s three research universities—the Medical University of South Carolina, the University of South Carolina and Clemson University. The SCRA is charged with operations of the program.
The innovation centers were designed to help commercialize research by providing support for companies doing proof-of-concept, assisting with the patent process, conducting market research, helping companies develop business plans and forming management teams around ideas.
The program was renamed SC Launch! to overcome the perception that the innovation centers were brick-and-mortar facilities, Stritzinger said. The centers “are not meant to be actual buildings. We’re not investing in real estate.”
The reason behind the formation of a nonprofit entity for SC Launch! and its requisite board was to provide a private portfolio to manage the funds more effectively.
“As a public entity, the SCRA would be prohibited from owning equity in any companies,” said Stritzinger. “It’s a constitutional prohibition. So we had to create this 501c3 to build a portfolio. And then we formed a strategic relationship between the SCRA and the three universities to help govern this new entity.”
Stritzinger noted that by June 2007, the board will grow to 11 members comprised of five appointed by the SCRA, three representing each of the universities and three appointed by the South Carolina Chamber of Commerce.
“It forms a really interesting alliance between those organizations,” he said.
The joint venture of the original innovation center concept was established in part because “the universities were searching desperately for seed capital to get behind their deals,” Stritzinger said.
When research performed at a university has potential for development and commercialization, a university’s foundation helps the researchers form a company, but the university owns the intellectual property.
“But then there’s the issue of finding the source of cash to turn it into a company,” said Stritzinger. “That’s where SC Launch! comes in. Foundations are not necessarily equipped with cash that’s available for equity investment for a startup.
“University foundations don’t have that kind of money themselves, but through this entity, the universities are helping allocate the $12 million in investment capital that exists in SC Launch!” he said.
Stritzinger pointed out that the money is not exclusive to university intellectual property projects.
“We’re using (the money) to benefit the state in various ways to bring knowledge-economy jobs into the state,” he said. “But those don’t necessary have to originate from university intellectual property.”
SC Launch!’s accomplishments to date include funding two projects, Argolyn Biosciences and Project Genesis; several companies moving to “due diligence” status with Charleston and Columbia angel partner groups; several client prospects moving into the pipeline at the USC incubator; and 18 enterprises moving to “due diligence” status with SC Launch!
Of those 18 enterprises, six are information technology projects with a university research focus, five are bio-medical/pharmaceutical technologies, four are homeland security-based, two are engineering/
process improvement focused and one involves a foundation.
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