2020 university entrepreneurship Index

startup creation reaches record heights

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Introduction

Illinois’ universities are engines of talent production and groundbreaking research that propel the state’s economy forward. Each year, our universities produce nearly 25,000 new STEM graduates and conduct $2.5 billion in research activity—injecting high-skilled talent into the workforce and creating innovations that become the backbone of new deep tech businesses. Over the past two decades, universities across the state have also embraced the role of supporting entrepreneurial faculty and students by providing additional resources and guiding the creation and growth of new ventures. This work has led Illinois’ universities to further increase their economic value to the state through direct support of new business creation and job growth.

The Illinois Innovation Index has tracked entrepreneurship and commercialization emanating from the state’s universities for more than a decade. In that time, increased support for faculty and students has led to incredible growth in startup activity. This trend continues in 2020, with new records for startup creation, capital raised, and job creation.

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Presentation slides are available here.

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Key Findings

• • Over the past five academic years—2014-15 through 2018-19—1,064 startups were founded by students and faculty of Illinois’ universities. This volume of startup activity is the largest ever tracked by this Index, and the first time five-year volume has surpassed 1,000 startups.
  • Nearly three out of five startups founded over the past five years remain active (59.4 percent), while 39.3 percent are inactive, and 1.3 percent have been acquired.
  • Despite the narrative that Illinois’ startups leave the state, more than two-thirds of active startups founded over the past five years remain located in Illinois (68.5 percent).
  • More than one in five startups founded on Illinois’ campuses are in the biotech industry (21 percent). Healthcare-related startups (those in biotech and healthcare & social services) make up more than one-third of all startups spun out of Illinois’ universities.
  • Two out of five startups founded over the past five years have received funding through venture or angel investment, competition prizes, SBIR/STTR awards, direct university funding, or other sources. Startups founded over the past five years have raised $1.42 billion in funding, the highest amount ever recorded for a five-year period.
  • More than two-thirds of startups (68.5 percent) that have raised funding remain in Illinois. However, a majority of startups that have raised more than $5 million are located outside the state.
  • Startup funding is led by companies in the biotech industry, which have raised more than those in all other industries combined ($749 million vs. $646 million). Startups in real estate and retail & wholesale industries have also collectively raised more than $100 million in funding.
  • Nearly a quarter of startups (23.2 percent) founded over the past five years received direct funding support from their university, totaling $14.1 million. Startups receiving direct funding from universities have gone on to raise $204 million in follow-on funding, representing a staggering 14:1 ratio of follow-on funding.
  • Among startups founded over the past five years, 141 have participated in the NSF I-Corps program, while 78 have received SBIR or STTR funding. Startups participating in I-Corps or receiving SBIR or STTR funding are more likely to remain active and be located in Illinois.
  • Startups founded on Illinois’ university campuses provide direct economic benefit to the state through new job creation. Startups founded over the past five years have created around 3,300 jobs. Of these jobs, around 2,700 remain active and 1,500 are located in Illinois.
  • Over the past several years, universities have stepped up efforts to improve representation in entrepreneurship. These efforts are paying off. Among startups founded over the past five years, around one-third (33 percent) have a female founder or co-founder, roughly twice the national average.
  • Foreign-born students and faculty are critical to Illinois’ startup pipeline. Among startups founded over the past five years, an estimated 39 percent are founded or co-founded by foreign-born students or faculty.
  • Beyond startup creation, Illinois universities disclosed 707 inventions, were issued 255 patents, and created 166 license and options agreements to commercialize new technologies in 2018. Licensing activity by Illinois universities brought in $1.37 billion between 2014 and 2018, 4th most nationally.
    

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