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Accelerating commercialization: a new model of strategic foundation funding

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  • Maryann Feldman
  • Alexandra Graddy-Reed

Abstract

Venture philanthropy presents a new model of research funding that is particularly helpful to those fighting orphan diseases, which actively manages the commercialization process to accelerate scientific progress and material outcomes. This paper begins by documenting the growing importance of foundations as a source of funding academic research as traditional funding from industry and government sources decline. Foundations are known for their innovative techniques and we consider the evolution of the ways that foundations fund academic research and form partnerships across academia and industry. We examine the example of the Cystic Fibrosis Foundation and the development of the drug Kalydeco ® as a demonstration of the principals of strategic foundation funding. The Cystic Fibrosis Foundation adapted to a venture philanthropy model and took an active role in drug development, stewarding the commercialization process from funding basic scientific work in academic institutions, to making an equity investment in a start-up firm. We conclude by evaluating the advantages and disadvantages to venture philanthropy for the academic researchers, industry partners, foundations, and universities and consider an agenda for future research. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Maryann Feldman & Alexandra Graddy-Reed, 2014. "Accelerating commercialization: a new model of strategic foundation funding," The Journal of Technology Transfer, Springer, vol. 39(4), pages 503-523, August.
    • Handle: RePEc:kap:jtecht:v:39:y:2014:i:4:p:503-523
    DOI: 10.1007/s10961-013-9311-1
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    References listed on IDEAS

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    Cited by:

    1. Christopher S. Hayter & Andrew J. Nelson & Stephanie Zayed & Alan C. O’Connor, 2018. "Conceptualizing academic entrepreneurship ecosystems: a review, analysis and extension of the literature," The Journal of Technology Transfer, Springer, vol. 43(4), pages 1039-1082, August.
    2. Graddy-Reed, Alexandra, 2020. "Getting ahead in the race for a cure: How nonprofits are financing biomedical R&D," Research Policy, Elsevier, vol. 49(8).
    3. Andrikopoulos, Andreas, 2020. "Delineating social finance," International Review of Financial Analysis, Elsevier, vol. 70(C).
    4. João R. Faria & Franklin G. Mixon, 2018. "Entrepreneurial Philanthropy and University Creation: An Economic Model," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 9(3), pages 1067-1086, September.

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    More about this item

    Keywords

    Venture philanthropy; Academic research; Drug development; Cystic fibrosis; O32; O33; P43;
    All these keywords.

    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • P43 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Finance; Public Finance

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