A Conversation with the CEO of Innovate Calgary

John Wilson shares experience and insight from a career commercializing technologies emerging from university research in the UK and Canada

This week I interviewed John Wilson, the CEO of Innovate Calgary and someone who has been involved in building the foundational elements of innovation ecosystems and commercializing emerging technologies in both the UK and in Canada.

My goal in this interview was to better understand Canada’s most developed example of a public-private, venture-philanthropic approach to investing in emerging technology, and to hear from someone with first-hand experience across multiple innovation ecosystems what needs to happen to address Canada’s perennial challenges with the process.

The history that John shares is fascinating, and his commentary makes clear that innovation is a deeply interconnected process that requires patience, risk tolerance, and a cohesive approach to support that recognizes that everything—money, intellectual property, and acceleration, in John’s words—must come together into a cohesive framework for any of it to work.

Your email client will probably truncate this post. My key takeaways are presented at the end, so be sure to read the web version if you want to get the whole story. Many thanks to John for sharing his experience and insight.

Interviewer’s note: John Wilson and the Innovate Calgary team approved the final version of the section entitled “Interview with John Wilson” and had editorial input on that section, with the option to rephrase and expand on the ideas discussed in the interview without changing or removing any intended meaning. The key takeaways presented at the end are my own commentary, and do not necessarily represent the views of Innovate Calgary.

Interview with John Wilson

KB: As I understand it, you've been involved in supporting emerging technologies in various roles for most of your career, starting in the UK and now in Calgary. Tell me a little bit about yourself and give readers a brief history of your experiences.

JW: As you know, I'm a self-declared techie. In the UK system in the eighties or nineties, you could end up with a PhD by the age of 24, which might be a bit young, really, but you can barrel through the system, and I did. Amazing, of course. I spent five years as a postdoc, and I took the opportunity to go to the US.

I went to Virginia Tech, great place, and then came back to the UK. I've always been looking at academia. I love research. I had the opportunity to join Unilever, a large multinational that had over 200,000 employees when I joined. I could do academic research, I had– fully funded PhD students, as well as doing commercial work and getting involved in product launches. So that was really excellent.

And then, I had a good friend, a mathematician, who wrote a paper that caused some interest. It was a mathematical paper, but it suggested that a different type of imaging was possible where you could get depth from images using fairly traditional optics. And that caused enough of a stir that we agreed that I would leave my job, become the CEO, and he didn’t need to leave his job.

We had no problem raising finance, and this is just based on a paper. We put a team together, ten, twelve people most of the time, set up shop, worked for five years. We had some wins and some losses. The technology was in a very competitive space. It wasn't going to be cost competitive. The company started design work, which we were good with–lots of good software people. At that point, my utility was questionable. So, I had the opportunity to become the CEO of another company. I said, “no, thanks. I'll go to Oxford University.” So there we are. I'm giving myself away.

Oxford is… look, they like all the gowns and the history and such like, but they are very progressive. We're going to touch on that in a minute. But they, as well as a few other universities, were really looking to the future. So, again, a really privileged position for me to be there at a key time in history.

I came to Canada nearly fourteen years ago. I went to Brock in Niagara. It's a different project. They were looking to rebuild an office. Brock has over 30,000 students, smaller research. So, this was much more about student entrepreneurship. I enjoyed that. I had to be dragged out of Niagara. It's a fantastic place.

But UCalgary came calling. As you said, I've been here nine years. I think we've built something quite interesting.

KB: It's my understanding that the university-attached seed fund and emerging technology support ecosystem in the UK is at least a decade, if not more, ahead of Canada's, and it's evolved quite a bit. I'd love to hear about your experience building those seed funds, and what lessons you took away from that. What can be generalized to Canada, and what can't?

JW: Some of the history has been told to me. I wasn't there at the beginning, and we don't want to go too far back. I think you can go back to the eighties. It's the start of a much heavier involvement in university research coming out of the US, the two big areas are health and digital, biotechnology was just taken off at the beginning of the 1980s, and, of course, digital with the silicon revolution.

These are things today that we see as anchors for all of our technology, health and digital, essentially. They were really starting in the late seventies, early eighties, with universities playing a role. At the same time, the US changed some of its rules around managing IP, devolving from a central management process, which was seen to be cumbersome and removed, and using the universities more as a proxy. [[Interviewer’s note: here John is referring to the Bayh-Dole Act]].

It's one of the one of the big debates that our industry has to this day: what was it that sparked the US industry that we see today? Was it the technology boom, or was it the change in the regulations? The answer is probably “yes”, Kyle. Oxford Innovation Company, which then was called Isis Innovation, was set up in the early eighties as a direct response to this. They could see that the Brits had to do something to compete.

So, they set this up in the eighties, and a few other universities did the same. And then in the late eighties, early nineties, it was apparent that access to capital was much easier in the US, and we just didn't have those early-stage capital access vehicles in the UK. Ian Cooksey was on the board. He was an early UK VC and had one of the UK's First VC funds. He was also connected with Oxford University. He helped set up Isis and helped to lobby the government during the nineties for seed funds for universities.

In the late nineties we had a new Labour government, and they introduced something called the University Challenge Seed Fund in '99. I don't know how they came up with it, but their model was that the government would put in some money, two foundations put in some money: the Gatsby Charitable Foundation and the Wellcome Trust. Any university that wanted to dip into this pot, and the pot was £40,000,000 GBP in the first instance, would need to put in 25% and then you could have up to 10% of the pot, I think. Oxford started with £4,000,000, and we started UCSF at Oxford in the early 2000s. Cambridge did the same, as did Imperial and UCL, all the really big universities that you could argue were trading on their research, but they're all being progressive and now looking to do more in the innovation space.

Regarding the investment process, I think it was up to £300k GBP right from the beginning. So let's call it half a million CAD. It looked a bit like a Dragon's Den process before we had Dragon's Den. It was mostly projects coming from the university TTOs. It could already be a company, but you didn't have to be a company at that point.

I would work with professors, build the business case for them, and I would make the pitch. were fixed rounds, and we would get a ten-minute pitch.

You would say yes or no that day. The success rate, I think, was deliberately designed to be around the 50% mark. The sweet spot is you don't want it to be just a foregone conclusion, but just because of the effort we're putting into it, you can't have a 10% success rate. 50-60% is not bad. For a decade, and for the time that I was there, we're making investments where the assets are accumulating, but there's no return of capital at this point. But the managing director of Isis Innovation at the time was Tom Hockaday, and every speech I saw him give, he would lead, or it would be a headline, that the biggest impact on the culture of innovation at Oxford University was the UCSF.

For a professor to get on the train in Oxford and go down into the city and ask for investment was very unusual. One or two always did it, but the vast majority were not going to do that. But to come to a university affiliated agent and be part of a process, and for me, or someone like me, that is much easier.

It was an amazing cultural success, so that was the early win. But then just after I left, Oxford Science Innovation set up what eventually became or very quickly became a £600,000,000 GBP fund just to invest in innovations coming out of Oxford. One university!

But UCSF was not a success in every university. For many it was, but some universities started, and it didn't really take off. I think what that tells us is that money is great, but it's never all about money. If you don't have the other bits and pieces around it, then it doesn't work. So that's a really key learning, I think.

KB: It sounds like that first forty million GBP fund was set up as a charitable public private partnership. Is that right?

JW: It's not for profit. They're evergreen funds. All the proceeds were turned back to the fund. This fund took about fourteen years to become evergreen. The aim is to fill this gap, and for it to be accepted that you could lose money, and that's still okay.

KB: UCeed is probably the most advanced Canadian example of the venture-philanthropic, public-private partnership model for supporting emerging tech. Tell me about Innovate Calgary and UCeed, and the process that led you from the knowledge you brought from the UK to that structure.

JW: The Innovate Calgary (IC) you see today, is not a replica of what then was Isis Innovation, what today is Oxford University Innovation, it is based on the understanding that you've got to have enough to do the whole job and not just bits of the job. Otherwise, you fail. We sometimes use the phrase “one stop shop”. I don't know whether that's a great phrase, but it conveys that we are trying to join things up. Innovate Calgary was set up in the eighties, so we will be 40 years old next year.

IC is an economic development agent for intellectual assets. That's my nice concise phrase.. “Intellectual assets” I prefer to “intellectual property”. I just think it's a broader, more general term. We do make money sometimes. We do not reliably make money. So, again, we're an economic development agent. No one's investing in Innovate Calgary. Banks aren't loaning us money. That's important to understand: we're an agent, not a company trying to make money.

The company is divided into three main groups: IP, Investment and Acceleration.. The acceleration bit you could break in two: physical assets and human assets. ,.

So, UCeed is a program, five years old, this year. It supports all three pillars of the university: teaching, research, and community. The capital comes either directly as donations from individuals or it comes indirectly, from foundations. Donors have made a donation to a foundation, and then the foundation wants to work with us and set up a UCeed fund. So the money comes to the university in those two ways, and then we create a fund, each having its own term of reference.

We have seven funds in total at the moment. It would be complicated if we had to then run a separate program for each seven, so we don't do that, we have groups: health, science and engineering, and social. Whatever comes in, we manage it in one of these three groups. We’re still learning, but we think that allows us to take on any donation, any grant, without it causing us more pain in just the management cost of all of this.

Our seven funds: We have three in the health space: we have child health, which was our first, general health, and neuroscience. We have two in the engineering/science group, they are energy and engineering and science (fund launching Fall 2025). We have one social fund, and we have a student fund as well. The student fund can invest in any sector, and it's a class in the Haskayne School of Business, a class of 15. It's a two year class open to any student at the University of Calgary, in any program. These guys and girls are leaving university having run a private equity fund for two years. So it's a pretty interesting course. We are trying, and again still learning, to try and get that fund integrated with all of our other funds. I think for me, the holy grail is to have the student fund running across everything we do and somehow involved in the management of the whole process. But one thing at a time.

In terms of key components of the seed fund, firstly, it is an open process, we often have outside observers. It's a dragon's den type process borrowing from UCSF. There's no privileged access to any of our advisers. We have an advisory group of people for every investment round.

The due diligence we do is public, we give it to the company. We don't market the due diligence or such like. We do the DD package, we give it to the company and then we say, “look, there you are. If you want to burn that, you can. But if you want to use that, you can as well, and that's fine.”

Then, of course, we have to manage conflict of interest because many of our advisers are active elsewhere and could be conflicted. They may have a connection with the company, so they recuse themselves, and we have a process for really trying to make sure we don't make any mistakes. We have amazing staff, and we take this very seriously. We're dealing with highly respected organizations, the Alberta Children's Hospital Foundation for example, so lots of effort goes into managing conflict of interest.

There is also a community dimension to UCeed. Each of our advisory committees is about seven people, 4 committees, so that's twenty to thirty people engaged. It's great community engagement. Student involvement is massively important. I'd like to have more students involved.

Then lastly, our relationship as the innovation office with the advancement office. The head of advancement at UCalgary is Andrea Morris. She's amazing, of course. UCeed doesn't exist without her. As an aside, when we introduced this, the past CEO, who I remained in touch with came to me and said, “well, congratulations, John and Andrea. You've succeeded in doing what the last five CEOs of Innovate Calgary have been trying to do.”

KB: Is the pitch to the donors typically around community impact and building something, or do they seek to seed companies to later directly invest? What's the typical connection between the donors and the outcomes?

JW: As always, there's more than one motivation. Foundations provide significant funding for research, the Alberta Children's Hospital Foundation (ACHF) is a significant funder of research at UCalgary, and most other big universities have these stories as well. So tens of millions every year go into really important projects. And then five years later, where does it go?

So, there is a need to translate the research. The foundation could do that, but do they have the infrastructure? We spent over a year with ACHF, and they were our first group. Andrea and I had regular meetings with their board, with their senior executives, explaining how we would safeguard them as well as introduce this really rigorous process which was going to be the most effective.

Again, you know, I have to thank everyone. They said “yes, and you guys look like you are capable and a good partner.” So, they trusted us, and we're still there. Great relationships.

We've had at least one other foundation come in, but then we have individuals as well. For energy and science and engineering, two people in the city, amazing individuals, heard about us, came as an observer, and watched the process. By then, they'd seen some of the investments. Maybe they'd even read some of the due diligence we'd done through various parties. They could see that this was adding value. One was a $3,000,000 gift, one was a $5,000,000 gift, and their motivations are giving back.

KB: My understanding is that UCeed does very detailed due diligence, and unlike most investment funds, you give it to the company. What can you share about what goes into the process and what goes into the DD package?

JW: I'll oversimplify first because I think this is the most important bit, and my colleagues will have to forgive me because I'll come back and praise them later. The real magic here is that we do it at all for this stage investment. So, we've never really put a price on what this DD package could be, but it could be $50,000. It could be more than that.

Who in the private sector does $50,000 worth of DD for a $50,000 investment? You can see where this is going. You'd have to be crazy, wouldn't you? So, there's the secret. No one in the private sector is going to do that, but if we look at our mandate and say, “well, this is what we're doing, folks,” then we do that. We do these outsized DD packages.

Coming back to this one stop shop philosophy. We have IP, we have marketing, we have finance. There are other organizations who could write this package, but I'm going to say that we are as good as anyone, and by the time you've done 50 or more, you'd like to think you're getting a bit better. So they are good packages. But the real secret is that we do it at all.

Since we met about a month ago in Ottawa, three companies have come to me, unsolicited, and told me how useful the DD package was for them. I'm going to say unsolicited unless somehow, I am teasing it out with them without knowing it. I met John Wong from Fluid Biomed, and he started telling me about how he was using this package. I met Steve Edgett at Genomadix, and then a week later, I was in Montreal when I met Jeff Bergthorson from Altiro Energy,. The investment is important, but a third-party review, if it's of a certain quality, is really valuable to our early-stage companies. We're tracking that, and we're somewhere between 10x and 15x between twelve months of UCeed investment. Jacob Johnson from Innovosource has much better stats for the US because they’ve got over 50 of these funds running, it's about 15x, in the US. We're also hearing now of how the DD is being useful for them for next round investment.

KB: As you say, there's no way that the for profit fund could pay for that. That's just cutting into IRR, whereas the nonprofit approach gives you some leeway.

JW: Quite simply, there are private early-stage actors, like us. Often, they will be candid and say that when they do these very small investments, they are business development, and very little formal DD is done. They will make their early first investment. They'll use that to look at the company, and the real value then is their follow-on rights and their later investments. But this is business development for them. Don't spend 50k looking at it. Make a small early investment and let the business develop. We could do that and save ourselves a lot of money, but then we wouldn't be fulfilling our mandate of leveraging all the others. I'm not criticizing those companies that don't. They are for profit companies. That's what they do. But you can see that we have this discrete role that we are playing, and that makes us feel comfortable that we are filling a niche.

KB: You mentioned seven funds, and it sounds like these funds are mostly chosen in response to the desires of the donors that seeded them. Are you going out to solicit specific donations in specific sectors, or is it mostly driven by pull from the donors themselves?

JW: Our first fund was with the ACHF, there was already a deep relationship with the university, we thought, and they’re such a respected organization..

The student fund was important to us. I think just as COVID was breaking out, I walked into the dean of the business school's office. I said to my colleagues at the time, “I don't know why this guy should say yes, because there are other things on his mind right now.” But you have to be optimistic, so I go in, and I'm an unknown person to him, he knows I'm a tech transfer person, so that means I'm a troublemaker. I walk into his office just as COVID is breaking out and say, “Jim, I've got an idea for you. Why don't we set up a private equity fund in your faculty?” And inside I was laughing, I was expecting a bit of a defenestration. And he said, “yes and let's do it as quickly as possible.” Every now and then, Kyle, you come across these great characters that just unlock the door. Now we have a new dean and she's brilliant as well.

Sorry for the anecdote, but it amuses me. The Social fund, absolutely a must, and one of the trickier ones to set up because “social innovation” still means different things to different people, so it has a communication challenge, and it has a challenge of keeping the broad church together. But and I think it's true in many universities, if I were to ask every faculty member which fund do they most associate with, then I expect the top fund to be the social fund. We have partnered with the United Way, Calgary and area, so again, more relationship building, but now with three or four funds in, we've more stories to tell.

And then the private donors came in a bit later. Energy, this is Calgary. Engineering Science was absolutely fantastic. Really didn't spend long talking with this gentleman, and he's amazing.

So, I think they've chosen themselves, and I think they will in most places. I can't imagine what fund would come to us that we couldn't do, but maybe, I don't know. I think just because of our relationships, they've naturally emerged. I think they've been significantly driven by us, but not always.

Maybe in the future, there could be an Ag fund. Ag is another one of these broad-church areas. Trying to get two people to agree what Ag means is challenging.

And then there is the issue of a follow-on fund. We're five years in. We've made 80 investments. Is there a role for us to play in the next round, which should be a completely different fund? It wouldn't be UCeed. It would be an investment fund.

Should we do that, or should we let someone else do that? And that's one of those discussions that is ongoing.

KB: You've been at IC for about nine years. How does the early stage innovation ecosystem in Canada broadly, and Alberta specifically, compare to the one that you helped build in The UK? Where is Canada doing a good job? Where are the gaps?

JW: There are definitely leading actors in both countries.

Waterloo has been the leader in entrepreneurship at least, but other things as well, and have been blazing a trail for decades. So, you have to take your hat off to Waterloo. But there are others as well. Over the last decade UCalgary has become a leader. But the leading UK universities started earlier. I have mentioned that the UK had the university channel seed fund in around 2000. Well, we don't have it here yet, and we're now 25 years on. I'm not saying we copy the British because there's clearly some things we shouldn't copy, but this really does seem like a good thing for very little money, so why don't we do it? I'm also not an expert on HEIF funding, this is the Higher Education Innovation Funding, which is central funding that the UK brought in, I think, 2001.

The importance of central funding is that if we ever wanted to do anything in a joined-up way in Canada, we will often hear, “oh, every university is different. It's very difficult to do joined-up things.”

I don't agree with that. Core funding to fill in the gaps allows very different universities to play together. So, if you wanted to have a seed fund for Canada, also having a HEIF type fund to allow all to fill in some gaps, whatever gaps there might be, that enables it. So twenty-five years ago, the UK had central funding and seed funding.

If you look at the UK and Canada, we clearly have very similar academic systems, a shared history. You can include the US as well of course.

The history is very devolved and market driven in terms of commercialization structure at UK, US, Canada, and other British derived universities. But in other parts of the world, the Universities are much more heavily connected to industry and were from the start. Japan, Germany, Switzerland and South Korea as examples.

If we come back to the UK and Canada, in a market driven approach, and in a country like Canada where we have a low receptor capacity for research, then we see poor innovation outcomes, and that's it. In the US, you've got significant receptor capacity, so the market operates. In the UK, you've got a bit less than the US and you've got less capital, which they tried to fill in, so they don't do quite as well as the US but better than Canada.

All this means that we should do something. I don't think that doing nothing is now an option. I've mentioned core ops, (HEIF-like funding), translational projects–(SBIR and STTR - like funding), seed funding, IP funding (Elevate IP for universities). So, if each of those programs was a hundred million each year, that'd be much bigger than anything we're doing now. Collectively, it'd be about 10% of SR&ED.

I couldn't get to the end of that without throwing SR&ED in. SR&ED is good, but it's a blunt instrument, and it's a large number. 10% of SR&ED would make all the world of difference in terms of our government led university innovation, and it wouldn't really change SR&ED at all.

KB: Within twelve months, you're seeing 10 or 15x in terms of follow-on investments. Recalling that in the UK it took fourteen years to become evergreen, with UCeed being about five years old, it probably hasn't quite hit that stage yet. What metrics are you collecting that correlate to progress toward this goal? How do you argue for the impact of something when the ultimate return is still years down the road?

JW: I inherited, for Innovate Calgary, a spreadsheet with something like 130-140 metrics, and they're all good, but we have reduced this number. The way in which we’ve approached this for a few years is that we've looked at the values that we have and the stories that we tell, and we have grouped our metrics into four categories: impact, finance, culture, and excellence in operations, and they are our values. Each group has 4, 5, or 6 top line metrics.

For impact, we're currently looking at our Pitchbook ranking, the number of startups, number of patents, the number of IP strategies.

Finance is income from various activities. We do make money, and although we accept that we can lose money, we also accept that we live in the real world, and the more we can make, the easier it makes things. So, we have a number of finance metrics. Impact and finance are the closest we have to our output metrics, and our other 2 groups are more like input metrics.

Culture metrics include: how many professors are engaged? How many community members are engaged. How many students. Culture is an engagement metric. I like to work with a quarter of our professors every year, and that's a big number, and this means innovation is cultural at the University of Calgary.

Excellence in operations is our last group. We sign over a thousand legal agreements every year. Much of my time, Kyle, is me reading and signing. So, it's a real machine, and we have to be good at doing this because it’s important and can be time consuming if you are not disciplined.

KB: It feels like the world generally, and Canada specifically, is at a significant political crossroads. What innovation and emerging-technology-related policy changes are you hoping to see from the new government?

JW: I'll make a comment first. I'm not sure if you consider yourself a policy person or that's your core. If you look at the history of university or public sector innovation and commercialization innovation starting at 1980, it was mostly led by lawyers in the early days, and you can see why: these are these are new types of legal agreements that we're doing, and you need to get some lawyers trained up to work out how to do this. So, if you look at the early tech transfer offices (TTOs), it was often a lawyer that was running them.

Then it started to get much more blended, and there's commercial people like me. What’s next? I would expect, in the next ten years, there to be more people in policy in leadership teams, in TTOs, because I think we know how the mechanics work. It doesn't mean we get it right every time, and we know what the problems are. What we're missing now is persuading the government to do it. Clearly people like me aren't very good at doing that kind of thing. So I'm really encouraging you, Kyle, not to leave this profession, I think, and to get policy involved in the innovation offices.

I've listed my priorities. There's five.

1. Core funding: Because core funding will allow every other program to operate. It’s the foundation course for a degree if you want to use that analogy. It will bring Canada together, understanding that Carlton might be at a very different place to UCalgary, to SFU, etc.

2. Gap funding - SBIR and STTR like funding. Our medical funding used to have things called POPs and that went away, which was translational funding. So, we actually have less than we used to.

3. Seed funding, clearly, and because I believe it's cultural as well as functional.

4. IP funding. ElevateIP could have a stream dedicated for University IP.

5. Finally, training and skills development, Lab To Market could evolve here.

If each of those were a hundred million dollars a year, that's half a billion, that's of order 10% of SR&ED.

I would write this up as one framework, so they all play into each other, and now you're spending half a billion each year. We should stop talking about tens of millions. Let's do it properly, in one program that puts all these together. That would be great for Canada.

KB: Is there anything that you wish I had asked that I didn't?

JW: Is there anything I've said that surprised you, Kyle?

KB: The biggest surprise was the relative scale at which these things are being done in Oxford versus Canada. The idea of close to a billion dollars of funding being pushed towards a single university, is mind-boggling just in terms of the implications for the amount and quality of emerging tech. Oxford isn't substantially larger than some of the large Canadian universities.

JW: It is quite large. It's not as big as U of T, I don't think, but I think it's bigger than UBC. So it is large, let's say it's a billion dollars a year. UCalgary is half a billion dollars a year in terms of research funding.

It is Oxford, of course. So, they've got a large amount of highly ranked research. But that doesn't explain just the complete difference in scale in this. That is because they've leaned into it, and the follow-on-fund is financially driven. That's why we should put together this framework, and we should allow for some failure, if it doesn't work in every university, the timing is wrong, but if it worked in a few of our universities, that would be worth the investment. I don't think we should do nothing right now. I think we've read enough papers on Canada about why we have a challenge innovating.

KB: That's a good point of comparison. The other surprise was getting a yes straight away from the university administration. You’ll have to teach me that trick.

JW: If this story was a movie, it the list of credits at the end would be a long list. You do need a lot of people to lean into this somehow. You don't want too many trying to block it. I think it could happen in every city in Canada. Last year, McGill produced more startups than any other university in North America.

Key Takeaways

Much of the story that John tells of the early days of the UK research-based ecosystem of the 1980s has clear parallels to present-day Canada. The early development of the UK approach to unlocking the value available in their universities differs significantly from the Bayh-Dole framework that was being developed concurrently in the United States, however, and therein lies the key set of lessons for Canada.

Whereas the United States enacted Bayh-Dole and shortly thereafter the SBIR as government-led push toward private sector involvement in research commercialization while keeping the public and private funding in separate vehicles, it seems the UK, like several other countries, went with a more hand-in-glove model of public-private partnership, a model that to my mind is more readily translated to Canada given that the Canadian emerging technology ecosystem bears more resemblance to that of the UK than it does to that of the US.

The University Challenge Seed Fund (UCSF) was everything that my previous article said that such an early-stage innovation investment fund needs to be: a philanthropic, public-private partnership that focuses on long-term self-sustainability and impact.

Being a public-private partnership allows for risk sharing between stakeholder groups that are otherwise large risk-intolerant. Using a philanthropic model as opposed to a traditional VC-LP for-profit structure to ensure flexibility with respect to the time to impact, avoiding mismatch between long deep tech and emerging tech commercialization timelines as compared to the liquidity requirements often imposed by private investors. Being arm’s-length from the universities ensures sound governance that can otherwise be subject to the whims of a changing administration .

Most importantly, as I laid out in my recent discussions of risk tolerance, it needs to say “yes” a lot: it is much more important in the early stages to ensure that opportunities are not missed than it is to pick winners, and a 50% success rate for investment is extremely high relative to any early-stage investment you can get in Canada.

John takes it one step further, though, in pointing out the value of the due diligence packages that UCeed conducts on early-stage technology. He is absolutely right that such deep due diligence makes no sense whatsoever in a for-profit model and represents a hit to the bottom line of a fund. However, with a philanthropic model where profit is not the primary motivation, activities that support the mission, but which may not be aligned with profits, become fair game. John described UCeed as an economic development engine, and, thanks to the charitable structure of the fund, can focus on a much broader definition of value creation when justifying how money is spent than would be possible in the context of a for-profit VC fund. Metrics like John’s 10-15x multiplier on initial investment within 12 months, while of limited value to a VC’s balance sheet, are clear indicators of progress toward economic development goals. In other words, John’s experience in the UK and with UCeed in Canada both provide clear evidence of the value of the charitable model of support for emerging technology.

What is most remarkable to me about the UK story is what followed the first fund. The fact that this fund took 14 years to reach evergreen status is irrelevant considering the nearly $1 billion (with a B) of private investment capital that is now pointed solely at Oxford university as a direct consequence of that proof of concept. From that seed of £40M GBP invested across several UK universities, so much value and such a vibrant ecosystem of research commercialization sprang up that a single UK university on about the same scale as most Canadian U15 universities now gets substantially more (private, for-profit) investment in commercialization of research than all of Canada’s universities combined. Clearly, this initiative created an enormous amount of private sector value in the form of deal flow that would not have existed without it. These intermediate progress metrics are key to telling the impact story and to starting the flywheel, while the Oxford Innovation Fund (OIF) is proof of the value of doing so, if only we can convince the powers that be to think in generations instead of election cycles.

While John is careful to note that not all universities performed equally well, this is clear proof of the potential value to be created, if we can get the rest of the equation right. On that topic, John’s insights are equally valuable. The key elements, as John points out, are investment, intellectual property, and acceleration. Without the money the rest of it falls apart, but just throwing money at a problem is not enough. To make research commercialization viable, we need to carefully manage the IP arising from publicly funded research, and we need to ensure robust tools for acceleration, which is to say programs that can assist in the early days of business development with entrepreneurial training, mentorship, and networking. While Canada has programs recently stood up to address both IP (see ElevateIP and provincial IP organizations, and my own SAIL initiative) and acceleration (see the i2I and Lab2Market networks), relatively few programs exist that do all three, and those that do are often limited in geographic scope.

A common objection that I hear when discussing anything pan-Canadian in scope is that it will not work because every university is different. Like John, I disagree with this (it is true that every university is superficially different in terms of their IP policy structure and the willingness of the leadership to engage in commercialization activity, but I reject the notion that this precludes initiatives that can work across institutional contexts - it just means a bit of extra work). While my answer to this objection has been SAIL, which is constructed to work with any institutional IP policy and tech transfer setup in Canada, John’s is that we need a pan-Canadian fund that can fill in the gaps and operate flexibly with respect to institutional approaches to tech transfer if we are to achieve the same kind of impact as was achieved in the UK; a fund that, given the risks and timelines involved, should be closely modelled after UCeed as a public-private, philanthropic, evergreen fund that can act in service of a greater mission than just profit. SAIL provides a foundation on which that can be built.

A structure that requires a generation to achieve evergreen status, is a difficult sell in an ecosystem where leadership at every level changes every few years.

The path forward involves a multidimensional approach, part of which lies in culture. John alludes to this idea in a number of places, most importantly when discussing the idea of faculty identifying with the missions of specific sub-funds of UCeed, and of using faculty engagement as a performance metric for Innovate Calgary. This is in line with the lessons learned through the Promotion & Tenure, Innovation & Entrepreneurship (PTIE) initiative about which I have previously written, wherein a grassroots culture shift, seeded deliberately at 75+ American universities, led to dramatic changes with respect to the impact of research beyond the lab. A top-down mandate to commercialize is important, but if we are to create something with the resilience to survive long enough to achieve the kind of impact that turned the UCSF into the OIF, it needs to be predicated on institutional culture, a requirement for which PTIE provides the blueprint.

As John points out, the cost of moving forward is small. The initial cost of the University Challenge Seed Fund, converted to CAD at the 1999 exchange rate and adjusted for inflation since then, amounts to about $175M CAD. Compared to the $8.5B that our unmet NATO commitment says should be spent on emerging technology development (20% of our 2% commitment, which is soon going to be boosted to 5%), or to the amount currently being spent under SR&ED (about $4B), or the amount that France is putting into this problem through Les Deep Tech (€3B EUR over 10 years), this is nothing.

I will end by highlighting one key element of John’s commentary: right now, we need action, not more studies. We understand the problems. Tried and tested solutions exist. We don’t need more papers written about it, we don’t need more reports. We need leadership from both the public and private sectors willing to embrace risk. UCeed is doing excellent work, but without an equivalent with national scope, we will continue to leave potential value on the table. John makes a strong case for the value of redirecting even a small fraction of the money that Canada is currently spending on blunt instruments like SR&ED toward more focused initiatives to support emerging technology arising from publicly funded research.

Many thanks to John, both for taking the time to discuss this with me and for his leadership in Canada’s emerging technology and innovation space.