Lost in Translation: How Misaligned Incentives Stall Tech Transfer
The Technology Transfer process is a wild ride – here’s how it works (and where it doesn’t).
Technology Transfer isn’t a straight path – it’s more like a high-stakes obstacle course. An innovation might be groundbreaking, but getting it from the lab into the real world? That’s were things get… complicated.
Why? Because TT is as much about strategy, relationships, incentives, and execution as it is about the actual technology. The process is fragmented, with each stage owned by different stakeholders with different incentives. In a world where control is impossible, incentives are one of the only reliable mechanisms for orchestrating a successful TT process.
Most TTOs don’t need a reminder of these steps, because they live them daily. But what’s often missing is a real conversation about how misaligned incentives, legacy processes, and institutional risk aversion prevent research from becoming commercialized. That’s what we’re tackling today.
This edition breaks down how TT actually works, where it falls apart, and examples of how leading TTOs have begun to solve for these problems.
Next edition, we’ll focus on solutions – the future of technology transfer and how to better align stakeholder incentives at each step.
Section 1: The Step-by-Step Journey
While Tech Transfer is not one-size-fits-all, below are the six-steps representative of the typical Tech Transfer process.
1. Discovery: The Eureka Moment
What Happens Here?
A researcher comes across a breakthrough – maybe it’s a new material that self-repairs, or a new drug compound with promising lab results. The moment of discovery can be thrilling, but it’s also the moment the clock starts ticking. If the innovation isn’t disclosed and protected properly, it risks becoming publicly available or dying in a research paper.
The Ideal Scenario
A university or lab’s Technology Transfer Office (TTO) quickly identifies that it is a high-potential discovery, works with the research team to file disclosures, and sets up early commercial assessments to determine whether the innovation has a market fit.
Reality Check
Many TTOs report that researchers are hesitant to disclose because they worry about losing publishing rights. Others simply don’t see commercialization as part of their job. Until academic institutions treat commercialization as a core part of research impact (and not an afterthought), disclosure rates will remain suboptimal.
Many researchers don’t fully understand the disclosure process or view it as a bureaucratic hassle
Universities receive hundreds of invention disclosures per year, often with limited staff to triage the best opportunities
Publishing before patenting can render an idea unprotectable, making it uninvestable (or at least less investable)
Stakeholders & Their Incentives
Researchers: Prioritize publications, not commercialization
TTOs: Prefer early disclosure for IP protection
Where Misalignment Kills Progress
Publishing vs. Patenting: Researchers worry about academic credit, delaying disclosure
TTOs lack leverage to incentivize researchers to disclose earlier
How Leading TTOs Address This
✅ Embed Commercial Thinking Early – The University of Michigan’s “Fast Forward Medical Innovation” program trains faculty in Tech Transfer before discoveries happen, leading to a 35% increase in invention disclosures year over year.
✅ “Fast-Track” Disclosure – Universities experiment with tiered patenting models (e.g., provisional low-cost filings for fast-moving ideas, with full patents reserved for higher impact discoveries)
2. IP Protection: The Legal Shields Go Up
What happens Here?
If an idea has commercial potential, it must be legally protected – typically through patents, copyrights, or trade secrets. A strong IP strategy can determine whether a discovery becomes a billion-dollar innovation or a missed opportunity.
The Idea Scenario
TTOs quickly evaluate the best protection path, develop a patent strategy based on market conditions, and secure the IP before publication or competitive findings are released.
Reality Check
Patents filings cost $20k+, so TTOs can’t protect everything
It can take 2-4 years for a patent to be granted, often outpacing the speed of innovation
Some of the best ideas never get patented due to funding constraints or upstream process deficiencies
Stakeholders & Their Incentives
TTOs: Need to allocate limited patent budgets wisely
Corporations/Startups: Want freedom to operate without excessive licensing fees
Investors: Prefer IP with clear market exclusivity
Where Misalignment Kills Progress
High Costs vs. Uncertain ROI: TTOs don’t always know what’s commercially viable and will produce a return on patent investment
Startups avoid tech with uncertain IP protection
How Leading TTOs Address This
✅AI-Powered Triage Systems – Use AI-driven tools (like LaunchIQ) to analyze and stack rank disclosures based on market potential and commercial viability – helping TTOs work smarter, not harder.
✅ Industry-Backed Patent Pools – Develop shared IP pools, where corporations pre-fund patent filings in exchange for licensing priority
✅ Faster Provisional Patents – Universities can file rapid, lower-cost provisional patents first, then pursue only full patents for IP with confirmed traction
3. Finding the Right Partner: The Matchmaking Phase
What Happens Here?
Now comes the hardest part – finding a company or entrepreneur willing to invest in and commercialize the innovation.
The Ideal Scenario
TTOs maintain strong industry networks, rapidly connecting research teams with the right commercial partners for licensing, investment, or spinouts.
Reality Check
The biggest challenge here is timing. Industry players want proven tech, but research institutions operate on research timelines. Bridging this gap requires structured matchmaking, not just networking events.
Corporations want low-risk, late-stage tech, while universities focus on early-stage, high-risk discoveries. In 2022, only 6,004 new licensing deals were executed from 27,322 disclosures – meaning just 22% of reported university inventions successfully found a licensing partner.
Many researchers don’t know how to pitch their technology to industry
TTOs struggle with outreach, deal-flow, and matchmaking
Stakeholders & Their Incentives
Corporations: Prefer late-stage tech, but TTOs push early-stage IP
TTOs: Need to push all early-stage IP they’ve invested in protecting
Investors: Require strong leadership teams, but many research teams lack entrepreneurial experience
Where Misalignment Kills Progress
Mismatch in Timing: Universities and researchers operate on years-long cycles; startups need traction in months
Corporations don’t want to fund the acceleration of early-stage de-risking
How Leading TTOs Address This
✅ Start Early – The UC Berkeley SkyDeck accelerator successfully pairs startups with university tech, securing early commitments from investors to bridge funding gaps.
✅ Reverse Pitches – Instead of only researchers and the university pitching technology they created themselves, companies present their biggest innovation gaps and let researchers solve real, pre-identified problems.
✅ Pre-Vetted Startup Founder Networks – Many innovations never commercialize because there’s no entrepreneur to lead them. TTO affiliations with pre-vetted founder pools (like Venture Studios!) can accelerate spinouts.
4. Negotiating the Deal: The Fine Print Dilemma
What Happens Here?
Now comes the deal-making phase – where legal teams, TTOs, and industry partners hammer out licensing agreements, equity splits, and commercialization rights. Or not!
The goal? A win-win deal were the TTO gets fair compensation, the company gets the rights to the technology, and the technology actually is brought to market.
The Ideal Scenario
The deal is swift and fair, with both parties aligned on financial terms, royalties, and development timelines
Agreement strikes a balance between protecting the institution’s interests and giving the company the flexibility it needs to grow
The process is transparent, avoiding costly disputes down the road
Reality Check
Many universities unknowingly kill deals by insisting on inflexible IP terms. Some require equity stakes that investors won’t tolerate, while others push for high upfront fees, pricing out startups before they begin.
Negotiations often drag on for months (or years) due to misaligned expectations between TTOs and industry partners (or the spinout)
Parties walk away when negotiations get too complicated, leaving promising tech on the shelf
TTO may overvalue their IP relative to the negotiation counterpart, setting expected compensation too high, scaring off the startup or corporation
TTO may undervalue their IP, signing a deal that yields little return
Stakeholder & Their Incentives
TTOs: Want fair compensation but risk overpricing
Corporations/Startups: Want flexibility and may undervalue IP
Investors: Need clean cap tables, making complex TTO equity stakes unattractive
Where Misalignment Stalls Progress:
Equity & Royalty Tensions: Some TTOs insist on too much cash or equity upfront, killing deals with startups and their investors
Corporations want broad IP rights, and universities resist
How Leading TTOs Address This
✅ Pre-Negotiated “Fast-Track” Agreements – Instead of negotiating every deal from scratch (or close to it), TTOs offer standardized licensing templates for common scenarios (e.g., startups vs. established companies). MIT’s “Ready-to-Sign” licenses can reduce deal times from months to days.
✅ Market-Based Valuation Strategies – TTOs leverage benchmarking tools to price their IP competitively based on real-world data rather than arbitrary academic valuations
✅ Revenue-Sharing Models Instead of Upfront Fees – Instead of demanding large, upfront licensing fees, TTOs can take a percentage of future revenues, lowering the risk for industry partners and encouraging faster deals
5. Product Development: Turning Science into Something You Can Buy
What Happens Here?
Once the licensing deal is done, the innovation moves into product development – where engineers, designers, and investors try to turn the research into a market-ready product.
This stage involves prototyping, clinical trials, regulatory approvals, and scaling manufacturing. It’s the make-or-break moment where many promising technologies fail to cross the finish line.
The Ideal Scenario
The company secures funding and assembles a specialized team to refine or implement the technology
If applicable, the product moves through clinical trials, FDA approvals, or industrial testing without major delays
The innovation is successfully scaled for production and delivered to the market
Reality Check
Many startups pivot away from university-licensed tech because they realize too late that it’s not commercially scalable. Some TTOs are now embedding 'commercialization due diligence' into the licensing phase to prevent this.
Many licensed technologies never make it to market due to funding gaps, technical challenges, or regulatory barriers.
Investors often hesitate to fund deep-tech innovations that lack immediate commercial viability (especially in biotech and advanced materials)
Some startups or industry partners pivot away from the original invention, shelving the technology indefinitely, potentially leaving the TTO without a return on their investment
Stakeholders & Their Incentives
TTOs: Want quick wins, won’t support long-term development
Startups: Need capital, but TT doesn’t fund productization
Investors: Want clear commercialization plans to invest, but research teams often lack them
Where Misalignment Kills Progress
Funding Gaps & the “Valley of Death:” TTOs won’t fund commercialization, and Investors/Startups won’t take on the risk
Technical Feasibility Mismatches: Some research isn’t scalable, Investors/Startups can’t risk finding that out later
How Leading TTOs Address This
✅ Involve Industry Early – The National Renewable Energy Lab (NREL) has a “de-risking roadmap” where industry partners help co-develop tech before licensing to ensure commercial viability.
✅ Government-Industry Bridge Funds – Modeled after DARPA’s early-stage investments, TTOs partner with federal agencies and corporations to create co-investment funds that further de-risk high potential innovations.
✅ Corporate-Backed Incubators – Industry giants sponsor dedicated accelerators for university tech, offering funding, mentorship, and product development support (e.g., Johnson & Johnson’s JLABS for biotech startups).
✅ Regulatory Fast-Lane Partnerships – Universities work directly with FDA, DOE, and defense agencies to develop “pre-clearance” programs that help academic startups navigate regulatory approvals faster.
6. Market Launch & Impact: The Finish Line (or Not?)
What Happens Here?
Finally, after research, development, negotiation, and commercialization, the innovation enters the market. Whether it’s a new drug, semiconductor, or a cybersecurity solution, this is where it all pays of – or falls flat on its face.
The Ideal Scenario
The product achieves strong market adoption, providing value to consumers, businesses, or government agencies.
The licensing TTO sees royalty revenue, funding future research and TT operations.
The technology sparks new companies and/or industries, creating jobs and economic growth. University-driven biotechnology transfer contributes $2.9 trillion annually to the U.S. economy and supports over 2.1 million jobs.
Reality Check
Some technologies struggle with adoption.
Some technologies get outcompeted by alternative technologies, making them obsolete before they can even take off.
TTOs may struggle to track impact, making it hard to quantify TT’s long-term benefits.
Stakeholders & Their Incentives
TTOs: want royalty revenue and can’t always track broader impact
Startups: need industry adoption but struggle with market education
Corporations: need proven scalability, not just academic credentials
Where Misalignment Kills Progress
Little Post-License Support: TTOs can’t always help startups build industry relationships or assist with industry education
Success Isn’t Tracked: TTOs can’t showcase the economic impact of their TT programs
How Leading TTOs Address This
✅ Post-License Commercialization Support – TTOs provide readily available advisors for startups post-licensing, ensuring viable strategies are in place before and after launch.
✅ Industry Adoption Strategies – TTOs and startups co-develop go-to-market plans, ensuring early adopters understand the technology’s value and integration process.
✅ Impact Measurement – TTOs track performance beyond licensing fees, using economic impact data and market success metrics to refine TT strategies and secure additional funding to fuel upstream efforts.
Conclusion: How We Make TT Work Faster & Smarter
Technology Transfer has all the right ingredients – brilliant discoveries, institutional support, and market demand. What it needs is smarter execution, faster commercialization paths, and proactive engagement with industry.
We want to hear from you:
Where does TT break down the most in your experience?
What’s the best way to speed up commercialization?
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Final Thoughts
TT is full of sticking points, but with the right mindset, we can build a system that moves at the speed of innovation. Let’s stop losing great ideas to bureaucracy – and start turning them into real-world impact.
Until next time,
Evan Allen & Blair Merlino
Co-Founders, 9point8 Collective