It has a cutting-edge—and cute—name: P2B, which in the shorthand of the New Economy stands for Penn to Business. It’s an untraditional concept: a not-for-profit holding company, owned by the University, that will create a series of on-campus business incubators. And the philosophy behind it is to help develop the entrepreneurial ideas of students, faculty and staff—and to juice up the local economy.
“The
two reasons why we’re doing this is to enhance the academic experience
for all involved and continue our drive to make University City and the
city of Philadelphia a much more safe and viable and interesting place
for people to be,” said John Fry, Penn’s executive vice president, who
will serve as P2B’s president and CEO. (Penn President Judith Rodin will
serve as chair of the corporation’s board of directors.) “The Penn experience
becomes richer if you have the opportunity not only to have a great classroom
experience and a social experience but also a great entrepreneurial experience.
And [P2B] begins to create a real economic-development platform for the
institution going forward.
“You notice I
didn’t say ‘make money,’” he added quickly. “A lot of other institutions,
I think, have sort of plunged into this with the notion of that additional
income, and [while] we certainly would like to see that, too, I feel very
strongly that for this to work it has to be rooted in the mission of the
institution.”
As Rodin explained:
“Like other institutions, there’s so much intellectual capital here, and
we’ve now created a frame around it that would help both the outside and
our own faculty and students and staff to get the resources that they
need.”
The University
has plans for five main incubators. One is already a reality: PenNetWorks,
which will focus on e-business development, and which has a partner in
the form of the RedLeaf Group, a technology operating company.
“PenNetWorks
kind of represents the model that we’d like to have with some of the other
incubators we’re focusing on,” said Fry, who noted that Redleaf will raise
$10-$20 million for “very early stage funding,” and will contribute “about
a million and a quarter” to help set up the operation. In return, it will
receive an equity share of any new startup businesses. Penn will be responsible
only for paying half the rent on PenNetWorks’ lease at 3535 Market Street
for the first couple of years, and for contributing what Fry described
as a “very small staff.” He also said it was “very likely” that Penn would
raise a capital fund of its own for projects that don’t “fit neatly into
an incubator.”
Four more P2B
incubators are in the works: Penn EduVentures, which will focus on distance
learning; Penn BioVentures (biotechnology); Penn TechVentures (commercializing
Penn’s intellectual property); and Penn CorpVentures, whose focus is corporate
relations.
“We want to just
find the right group and put them in place, let them raise the capital,
hire the people, get the sponsors and interact directly with the entrepreneurs—a
completely arms-length relationship,” says Fry. “So if entrepreneur X
goes down to PenNetWorks and says, ‘Here’s my idea; what do you think?’
and the PenNetWorks people say, ‘We don’t like this idea; we don’t think
it has any commercial viability’—that’s fine. That’s the market talking,
not Penn. So they’re not going to come back to me and say, ‘John, this
stinks; I really think I should have been given a chance’—that’s not going
to happen. We want to avoid a conflict of interest.”
Noting that P2B
will focus heavily “on the issue of long-term development of the eastern
side of campus,” especially the area around the 30th Street Post Office,
Fry emphasized the hope that P2B can help keep talented people and their
ideas in West Philadelphia and the region. “When people graduate from
Penn, they tend to leave” because of the less-than-vibrant economy, he
noted candidly, even though the quality of life is very good. “Well, what
we’re doing is saying that your opportunity could also be in Philadelphia.
If you’re an entrepreneur and you want to start something up, or if you’re
22 and you just graduated—there’s five hot companies five blocks from
here.”
