Cleveland Institutions, state pool $6 million to launch businesses
Funds first steps moving Case Western Reserve University and University Hospitals Case Medical Center technologies and treatments to market
The Ohio Third Frontier has invested $3 million in an initiative from Case Western Reserve University and University Hospitals Case Medical Center designed to bring research and treatment breakthroughs to market.
In addition to the state support Case Western Reserve will contribute $2 million and UH Case Medical Center $1 million to the Case Technology and University Hospitals Ventures Fund (CTUHV Fund). In both cases, the dollars represent the institutions’ largest commitments to pre-seed investments in their respective histories.
The goal of the joint initiative is to provide a professionally-managed, pre-seed fund that will help advance commercialization of discoveries that include medical technology related to imaging, surgical instruments/equipment, implant devices and regenerative medicine; business and healthcare software; advanced materials; and fuel cell and energy storage technologies.
“The CTUHV Fund is predicated on the success of Case Technology Ventures, Northeast Ohio’s first seed fund of this kind,” said Joe Jankowski, assistant vice president for Technology Transfer at Case Western Reserve. “Created in 2003, the CTV established myriad active companies employing 120 full-time employees in the region, and which leveraged investments of more than $91 million—a 53-to-1 ratio compared to the $1.7 million in pre-seed money.”
Those companies include Arteroiocyte, which has received U.S. and foreign approval for five stem-cell and tissue-engineering-based products. Synapse Biomedical, makes neurostimulation devices that help patients with spinal cord injury and ALS to breath. CardioInsight has developed three-dimensional whole-heart electroanatomy mapping technology that assists doctors in Europe in diagnosing heart arrhythmias.
Stephen Behm, director of technology management at UH Case Medical Center, said the fund will capitalize on the healthcare expertise and patient care found at the medical center.
“UH Case Medical Center is a world leading research-oriented healthcare institution that has a strong history of commercializing research,” Behm said. “Our physicians are on the leading edge of developing new techniques and therapies in the pursuit of our mission: ‘To Heal. To Teach. To Discover.’ and this fund will help bring some of these discoveries to market for the benefit of patients.”
The university and the hospital combined their efforts to enhance their chances for securing a state grant. They focused on pre-seed funding because that’s traditionally been the greatest need.
In this new fund, entrepreneurial students from across multiple schools as well as regional collaborators JumpStart, BioEnterprise and North Coast Angel Fund will be involved in the due-diligence process, drafting contracts and more..
The CTUHV Fund aims to invest in 12 new companies with half achieving follow-on Series-A financing within 2 years of receiving pre-seed money, creating an average of 20 employees per company and leveraging capitalization at a rate of better than 15 to 1.
The new fund will invest in start-up companies and firms recruited to Ohio to support the venture. Such entities may include those with strong ties to the institutions and/or have forged a formal relationship with the Ohio Third Frontier Entrepreneur Signature Program (ESP) and the collaborators.
An investment committee including Jankowski and Behm, chief investment officers at Case Western Reserve and UH Case Medical Center, and four more members to be named, will decide which applicants receive funding.
A fund website and more information will be available after the state and the institutions have signed contracts and the award is in place, likely this spring.
“We can provide a one-year runway to get off the ground,” said Jankowski, who will manage day-to-day operations of the CTUHV fund. “Entrepreneurs who want to turn our technologies into businesses, we have the ability to partner.”