PART 1: First three “Innovation Crossroads” start-ups making great progress
(EDITOR’S NOTE: This is the first in a four-part series spotlighting the “Innovation Crossroads” initiative at Oak Ridge National Laboratory and the founders of the three companies that relocated to the Knoxville-Oak Ridge region to grow their energy-focused start-ups.)
By Tom Ballard, Chief Alliance Officer, PYA
Nearly 18 months after announcing the program and not quite nine months through the first cohort, Tom Rogers says the entrepreneurs in Oak Ridge National Laboratory’s (ORNL) “Innovation Crossroads” initiative are making great progress.
“The three start-ups in the inaugural cohort are doing really great,” Rogers, ORNL’s Director of Industrial Partnerships and Economic Development, says. Those companies, which will be spotlighted in the next three articles in this series, are Active Energy Systems (Mitch Ishmael), SkyNano Technologies (Anna Douglas), and Yellowstone Energy (Matt Ellis and Sam Shaner).
The common technology play across the trio of companies is addressing an important issue related to energy and what better place to do so than a national lab. Through “Innovation Crossroads” and similar programs at Lawrence Berkeley and Argonne National Laboratories, the U.S. Department of Energy (DOE) hopes to address the proverbial “Valley of Death” that is occurring because of the critical absence of early stage investment capital in the energy sector.
“We have a long-standing commitment to a culture of innovation at ORNL,” says Rogers who cited several examples. They included applying nuclear and physics expertise to the discovery of element 117, named Tennessine, demonstrating the nation’s ability to produce plutonium-238 for deep space missions, and discovering a process that converts carbon dioxide directly into ethanol.
The breakthrough work at ORNL is further underscored by the fact that lab scientists have received a total of 210 “R&D 100 Awards,” the most of any single organization.
“Creating successful energy start-ups is a real challenge,” Rogers says, noting that early stage venture capital available for the sector declined by 85 percent between 2007 and 2014. The trend has not reversed itself, so DOE decided to proactively address the matter.
“We’re leveraging the world-class resources at the national labs to help build a bridge for early stage companies to finetune their technologies, develop solid business models, and become more investment ready,” he explains. That’s where the venture capital money is available at the later stages.
The innovators in “Innovation Crossroads” cohort one are receiving two-year stipends with health and travel benefits, business mentoring and coaching, and up to $350,000 in R&D support. The program is sponsored by DOE’s Advanced Manufacturing Office.
“All of the innovators are now fully acclimated at ORNL” Rogers says. “They have their CRADAs in place and are starting to work in the labs with researchers.” CRADAs, shorthand for Cooperative Research and Development Agreement, are the mechanisms for the research work to be undertaken. The entrepreneurs are busy enhancing the science behind their technologies and working on prototypes.
“They are also doing investment pitches, meeting with prospective customers, and hosting quarterly meetings of their newly-formed advisory boards,” Rogers says.
With cohort one well-underway, ORNL is finalizing selection of the second cohort that will start in May. The goal is to have five start-ups in the next group.
Rogers credits a number of regional organizations for support, including LaunchTN and the Tennessee Advanced Energy Business Council that are providing support through the new Energy Mentor Network; the University of Tennessee College of Law and its Legal Clinic, which is assisting with legal matters; and PYA, the power behind teknovation.biz, which is helping the new entrepreneurs with accounting and business advisory services.
Looking to the future, Rogers points to the evolution of LBNL’s Cyclotron Road, the first of these programs launched at a national lab. A new non-profit entity called Activation Energy is partnering with that lab to expand the reach and impact of the effort.
“Activation Energy secured a grant from the California Energy Commission and is beginning to secure donations from foundations and venture capital firms,” Rogers says. “They’re charting an exciting path to leverage the DOE investment with other investors in their region.”
It’s all about bringing new, promising energy technology companies to market as fast and as strong as possible.
“‘Innovation Crossroads’ gives our researchers a unique chance to boost the entrepreneurial drive of these young scientists and engineers and accelerate their path to commercialization,” Rogers says. The long-time player in the local economic development community describes it this way: “We are doing more than managing an entrepreneurial fellowship program . . . we are trying to help the innovators build successful companies that will have lasting impacts in the region and the nation.”
NEXT: Active Energy Systems, founded by a Knoxville native and Cornell University Ph.D.