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ENTREPRENEURSHIP

P2B Hopes to Help Hatch Businesses

 

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.”


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