If you choose to license your technology, then the first step is to talk with the Technology Licensing Office at your institution (sometimes these are called Technology Transfer Offices) and to file an invention disclosure form with them. The Association of University Technology Managers website has some resources discussing technology transfer.
You may want to discuss the question with colleagues who have experience with one path or the other. It is important to think about the two options as they are quite distinct in what is required. Either way, the first step is to file an invention disclosure and have a conversation with your institution’s Technology Licensing Office (TLO).
As a benchmark, for MIT, a very entrepreneurial university, about 20% of licenses are to start-up firms and 80% are licensed to a large firm. Throughout the site, you will also be referred to other resources on the web, such as the nice collection of inventor resources at the University of Michigan.
The decision comes down to four factors:
1. Your goals
If you choose to license your invention, then you may wind up with a modest supplemental source of income and possibly some role in further scientific and technical development.
If you choose to participate in a start-up, then you can have a hand in shaping the entire process of choosing a first application, raising money, and commercializing the product. This can result in greater exposure to the experience of starting a business from scratch as well as equity in the company.
2. The resources available (mostly - your time and energy)
The time and energy required of you to do a start-up is much higher than that required if you license the technology to an existing company or start-up. Depending on the size of the company that takes the license, on average licensing will require much less of your time and resources than doing your own start-up. If your institution has a technology licensing (or technology transfer) office as most universities and medical schools do these days, then the personnel in that office will undertake much of the work in patenting and licensing your invention. However, it is important to recognize that these offices receive large numbers of invention disclosures, so yours may not receive the attention that you think it may merit or as rapidly as you like.
3. Your tolerance for risk and expectations for rewards
There is risk both in licensing and in starting a business, however, overall the risks (chances of failure) in a start-up are much higher. With those risks, though, comes greater potential financial reward. Owning equity in a successful company can be much more lucrative than the royalty stream from licensing since most of the value generating activities come towards the end of the commercialization process. Nonetheless, there are risks inherent in licensing as well. If the license winds up being to a small company than many of the risks of a young, small company are present in this case as well. Even if the license winds up being to a large company, then there is often the risk that the large company will be slow to commercialize your therapy or may decide to bring an alternative technology to market and not to develop yours at all.
Especially when technologies are very early stage or more radical or disruptive, large companies have historically been less likely to wind up bringing these products to market than small companies that have more to gain and less to lose. So there are risks on both sides, but overall the risks and the potential rewards of doing a start-up are higher. It is frequently the case that scientists and engineers will tend to think that all the hard work is in inventing and that commercialization and all the business side of marketing and selling the technology are relatively simple. This may be true, but it is important to recognize the high rate of failure for commercializing new technologies and there are many critical decisions and places where the risk of failure can pop up. Very often the failure to bring an invention to the world results from people issues and not from a failure in the technology itself. Recognizing that the process from invention to successful commercialization is long and often difficult is important to properly set expectations.
4. Is your invention a product or the basis for a business?
This is perhaps the most difficult of the four questions for an inventor to answer. It may require several conversations with your institution’s technology licensing office and local entrepreneurs and business people. In general, you should have a sense for which category your invention falls into. If the invention is a relatively minor improvement or single product with a small market, it is likely a better candidate for licensing. If the invention addresses a large market, is a substantial improvement, or could result in multiple products as a platform, then it could be more appropriate for forming a new start-up business around. This is a tricky question to know the answer to early on but it merits some thought.
Whether through licensing or entrepreneurship, commercializing your new epilepsy therapy or diagnostic can be an exciting way to see results of your work in the real world. However, like publishing, in commercialization, you will find critical reviewers of your work that you must justify your contribution and advance over the state of the art in the field even when it seems obvious to you. Nonetheless, if we are to make progress in the treatment of epilepsy, it is absolutely critical to have researchers who are willing to undertake the unique challenges of commercializing their innovations and bringing them to the bedside for physicians to use and patients to benefit from.