INL’s new innovation incubator could link start-ups with an industry sponsor
Idaho National Laboratory is looking for a sponsor to invest $5 million–$10 million in a privately funded innovation incubator to support seed-stage start-ups working in nuclear energy, integrated energy systems, cybersecurity, or advanced materials. For their investment, the sponsor gets access to what INL calls “a turnkey source of cutting-edge American innovation.” Not only are technologies supported by the program “substantially de-risked” by going through technical review and development at a national laboratory, but the arrangement “adds credibility, goodwill, and visibility to the private sector sponsor’s investments,” according to INL.
National laboratories already collaborate with industry innovators, so what makes the incubator different? Nuclear News reached out to Jim Keating to learn more. Keating has a background in materials science and an MBA and spent about eight years working in venture capital with early-stage start-ups before taking a job at INL six years ago. As the lab’s Technology Deployment Commercialization and Entrepreneurship Programs manager, he said, “I can translate business for scientists, and I can translate science for the businesspeople.”
Technological cross-fertilization: The “domain” of the innovation incubator will depend on the interests of a sponsor. “It's not just nuclear—we’re casting a wide net,” Keating said. “It can be anything that the sponsor is looking to in-source, any aspect of that domain where the sponsor says ‘yes, it could be tremendously beneficial to in-source innovation and to do this via a nationwide call in conjunction with a national laboratory.’” Within the “vast” nuclear domain, sponsored nuclear research could be specific to fuels, supply chain, or reactor integration, for example.
“It brings a lot of very interesting content and new ideas to the lab, so the lab benefits from being able to keep their finger on the pulse of what's going on in these areas,” Keating said. “The cross-fertilization between all these entrepreneurs and our researchers has really benefited the other programs in general and other labs that are doing this kind of thing.”
Like peanut butter and chocolate: Keating explained that the new INL program is modeled after three successful programs run out of the National Renewable Energy Laboratory (NREL) with corporate sponsors Wells Fargo, Shell, and Chevron. It all started with a high-level conversation among people at Wells Fargo (a bank with substantial commercial real estate holdings) and NREL (a national lab researching building efficiency).
“It was one of those moments—let's take our peanut butter and combine it with your chocolate—where it kind of made sense for somebody that had that much real estate to partner with the lab that specializes in building energy efficiency,” Keating said.
“This model has proven to be extremely successful. In the past, [NREL and program sponsors] got as many as 150 applicants for every call like this. They eventually whittle it down to about five or six in each cohort. They go through the program and then what emerges is something that's more investable. It's had some very thorough technical due diligence.” Keating said that about 30 percent of the start-ups that went through the NREL programs received more investment from the sponsor once the program ended.
“We're certainly not making any kind of investment recommendations or decisions or anything like that,” Keating said. Instead, INL researchers would be metaphorically kicking the tires of product and technology ideas “from a very technical perspective, to make sure they can do what they want to do or claim that they're doing.”
Suited to entrepreneurs: INL and other national laboratories already work with nuclear developers through programs including GAIN (Gateway for Accelerated Innovation in Nuclear) and NRIC (National Reactor Innovation Center). The innovation incubator is different because its start-ups would have a lower technological readiness level, and the program does not feature a government cost-share.
Entrepreneurs and start-ups selected for the innovation incubator would likely be “preready” for venture capital, Keating said. By that, he means “they’re not quite ready for prime time because they really need that technical due diligence and development, [and most venture capitalists] don't have an appetite for that—they'd rather see something that's a little more fully baked. Once you go through this program at a national lab, in theory, you should emerge with something that has a higher level of readiness.”
Private funding allows the program to use different contracting rules than for programs run with government funding. “We have a lot more flexibility with privately funded programs and that's why we're choosing it, because it's consistent with the nature of what needs are for entrepreneurs and start-ups. This allows us to run a very entrepreneurial program within a national lab setting,” Keating said.
“IP remains with the entrepreneurs and with the companies,” he added. “We don't want any encumbrances for these start-ups and entrepreneurs when they come here.”
Next steps: Keating is continuing conversations with potential industry sponsors. The innovation incubator program won’t officially begin until a sponsor has been signed. At that point INL and the sponsor will put out a call for entrepreneurs and start-ups in the sponsor’s domain of interest.
INL researchers would do an initial “technical down select” to reduce a group of about 150 anticipated applicants to 30. “Those 30 would go to the sponsor and the sponsor would pick the five or six that they really like,” Keating said. Selected applicants would work with INL scientists and researchers for about 18 to 24 months.
