Accelerating commercialization: a new model of strategic foundation funding Maryann P. Feldman • Alexandra Graddy-Reed Ó Springer Science+Business Media New York 2013 Abstract Venture philanthropy presents a new model of research funding that is particu- larly helpful to those fighting orphan diseases, which actively manages the commercialization process to accelerate scientific progress and material outcomes. This paper begins by doc- umenting the growing importance of foundations as a source of funding academic research as traditional funding from industry and government sources decline. Foundations are known for their innovative techniques and we consider the evolution of the ways that foundations fund academic research and form partnerships across academia and industry. We examine the example of the Cystic Fibrosis Foundation and the development of the drug Kalydeco Ò as a demonstration of the principals of strategic foundation funding. The Cystic Fibrosis Foun- dation adapted to a venture philanthropy model and took an active role in drug development, stewarding the commercialization process from funding basic scientific work in academic institutions, to making an equity investment in a start-up firm. We conclude by evaluating the advantages and disadvantages to venture philanthropy for the academic researchers, industry partners, foundations, and universities and consider an agenda for future research. Keywords Venture philanthropy Á Academic research Á Drug development Á Cystic fibrosis JEL Classification O32 Á O33 Á P43 1 Introduction Philanthropic disease-oriented foundations are experimenting with new research funding models that challenge assumptions about the commercialization of academic research. The implicit social contract that guaranteed public support for science and academic research is eroding within a larger debate over calls to foster more innovation, a perceived need for more effective ways to organize research projects, incentivize individual scientists, and M. P. Feldman Á A. Graddy-Reed (&) University of North Carolina at Chapel Hill, Chapel Hill, NC, USA e-mail: agraddy@live.unc.edu 123 J Technol Transf DOI 10.1007/s10961-013-9311-1