Cathie Anderson

UC Davis launches researchers into startup

Research scientist Paul Feldstein confidently talks about leaving his post at University of California, Davis, soon for a full-time job as the president and chief executive of his own company, a fledgling startup known as DtoR Inc.

No one would ever guess that it was only last November that Feldstein walked into the university’s Office of Research to file a record of invention for a fast, powerful new way to copy DNA into RNA. DtoR’s technology, the inventor said, will help many drug companies produce their products faster and more efficiently.

In less than two months, the Venture Catalyst team within UCD’s Office of Research got DtoR incorporated and then installed in a business incubator where Feldstein and his business partners, Jim Lincoln and LeAnn Lindsay, could pursue proprietary research outside the university.

“We only filed (the invention disclosure) because we were thinking maybe there would be a little funding opportunity,” Feldstein said. “We asked, ‘Do you know if they have little grants to help get things started?’ ”

It was then that Feldstein learned that he could apply for a federal Small Business Innovation Research grant, if only he had a company, so his next question was: “OK, how do I become a company?”

Feldstein said he definitely got connected to the right person: Zane Starkewolfe, an associate director with Venture Catalyst, has steered him through incorporation, filing several provisional patents, making key industry contacts and finding his company a home at the UC Davis-HM.Clause Life Science Innovation Center.

The innovation center, a business incubator for startups that need biochemical lab space, combines the resources of UCD with those of the HM.Clause vegetable seed unit of the French multinational Groupe Limagrain. Subsidized by HM.Clause, the center got a soft opening in December, just in time to welcome DtoR as one of its first tenants.

Through the new Venture Catalyst unit and a growing number of business incubators like the UCD-HM.Clause center, the university is exerting new effort on its decades-old goal of increasing the ranks of entrepreneurs coming out of its faculty. Dushyant Pathak, the man in charge of Venture Catalyst, said it’s imperative to ensure the school is providing the right resources, services, networks and facilities to help faculty members who want to bring a product or technology to market.

Pathak, UCD’s associate vice chancellor for technology management and corporate relations, said university officials have worked toward developing incubators in several locations around the region. The college campus is already home to one incubator, the Engineering Translational Technology Center, Pathak said, and it has worked closely with Davis Roots, a nonprofit business accelerator based in downtown Davis.

The idea, Pathak said, is to put incubators within biking distance of faculty labs and offices on campus. During one of several visits with Mark Stowers, the global head of research and development at HM.Clause, Pathak mentioned this strategy. It sparked a dialog between the two: What if UCD put its entrepreneurial faculty in an incubator near scientists working at a larger company?

It’s been shown that when researchers from completely different disciplines talk and share ideas, it often results in unexpected innovation, said Pathak, a biochemist who was entrepreneur-in-residence at the University of California’s QB3 incubator network and Mission Bay Capital venture funds before he joined UC Davis.

Stowers suggested that UCD locate one of its incubators at HM.Clause’s operation in unincorporated Davis. The company had an unused wet lab space where chemicals, drugs and biological matter could be handled in liquid solutions or volatile phases.

While the two men were exploring the idea, Pathak went to an investment conference in San Francisco, where he met and got to know Starkewolfe. At the time, Starkewolfe was working in venture capital and banking, but seven years earlier, he had attempted to get a med-tech startup off the ground in Davis.

“We looked for incubation facilities, and there was really nothing in the Davis region at the time,” Starkewolfe said. “There had been a lot of talk about potential incubation space for 20 years or more. … We took the next two years trying to do things in not the best conditions, then opted to go down to the Bay Area.”

Because of his past experience, Starkewolfe was all ears when Pathak told him about the HM.Clause project last year. He ended up leaving his job in venture capital to work with Pathak on bringing the partnership with HM.Clause to fruition. They formally marked the center’s opening with a celebration in May.

DtoR and three other startups have so far signed leases, said Lincoln Moehle, director of global research and development operations for HM.Clause. They pay $300 a month for a few feet of space at a laboratory work bench, plus access to equipment such as centrifuges and specialized refrigerators as well as consumables such as gloves and test tubes. They also get access to a conference room and greenhouses. The facility can accommodate nine to 10 companies at once.

“When we first started talking about this and talking about the prices,” Moehle said, “people would say, ‘What’s the catch?’ Well, there’s no catch. This is not a for-profit thing for us. We’re just trying to cover some of our costs. … For us, the benefit really was helping companies develop technologies that could benefit the broader society. We also like the idea of having a space where there’s lots of innovation and creativity going on.”

HM.Clause owns approximately 140 acres of land in unincorporated Davis, where it operates one of the company’s many seed-breeding operations. Their scientists work to improve a crop’s agronomic properties, such as yield and disease resistance, as well as traits affecting marketability, such as flavor and nutritional elements. None of their vegetable seeds is genetically modified.

Both HM.Clause and the university receive a 1 percent equity stake in each of the startups, Moehle said, but it wasn’t a significant enough stake to be a motivating factor for either entity. Some of the businesses will wash out, but others will grow until they no longer need the innovation center.

UC Davis vets potential tenants to ensure they know the proper protocols for research and safety, Pathak said, and the spaces are available for only six months to two years.

“At some point, you have to hatch and leave the nest,” Pathak said.

Pathak said that UCD plans to put a third business incubator, this one focused on startups in the medical technology arena, near the UCD Medical Center in Sacramento.

Cathie Anderson: 916-321-1193, @CathieA_SacBee