When the Market No Longer 'Blindly Trusts' Professors, Where Does Innovation Belong?

Enthusiasm in the venture capital community for scientist-led startups is waning.

Investors seeking low-risk, high-return opportunities through the commercialization of scientific research are encountering various challenges and are now subjecting each technology transfer project to rigorous scrutiny.

Zhang Qiang was one of the investors who pursued scientists back then. When discussing the original intention behind this decision, he stated frankly, “At that time, the market bubble was severe, and the valuations of later-stage projects were too high. The early-stage projects led by scientists had relatively lower valuations.”

Moreover, these projects demonstrate a high degree of innovation and hold the potential to achieve leapfrog development through technological advancements.

However, as time has passed, the risks associated with investing in early-stage scientific projects have gradually come to light—the troughs of economic cycles cannot be resolved in the short term, nor can the bottlenecks in technological commercialization.

Like many investors, his firm has also reduced the number of investments made in professor-led projects this year.

As one of the early pioneers, I spoke with Li Xiaojian (Senior Engineer at Shenzhen Institute of Advanced Technology and Founder of Weiling Medical) while he was en route to Weiling Brain-Computer Interface, a subsidiary of Weiling Medical. Located adjacent to the laboratories of the Shenzhen Institute of Advanced Technology, the company primarily provides experimental devices for brain-computer interfaces.

The rationale behind founding Weiling Brain-Computer Interface was straightforward. Li Xiaojian believed that for researchers like themselves, commercializing scientific research services represented a relatively accessible pathway—by producing scientific instruments, they could not only utilize them internally but also provide services to other laboratories and scientists. However, venturing into broader industrial sectors, such as consumer or medical products, would entail confronting significantly greater challenges and difficulties.

This is indeed the case. During the commercialization of medical-grade brain-computer interface (BCI) products, one of the major challenges Li Xiaojian encountered was that the progress was severely constrained by ethical reviews for clinical trials, as well as regulatory requirements and procedures for registration and approval.

As a novel Class III medical device product in its very early stages, it did not even have established evaluation criteria. Under such circumstances, what is the role of scientists? Li Xiaojian’s answer was straightforward.One is to lay out the upstream scientific research instrument industry, promoting the development of brain science while achieving certain revenue; the other is to advance scientific and clinical work through academic promotion, laying a solid foundation for registered clinical trials.

A month ago, when VCBeat first spoke with Li Xiaojian, he was busy organizing the “International Conference on Transformative Technologies in Neural Engineering,” discussing the development and practical application of brain-computer interface (BCI) technologies with more than 20 top international experts. Earlier still, he had actively joined the China Brain-Computer Interface Industry Alliance, organized by the Ministry of Industry and Information Technology (MIIT), leading close collaboration between the Basic Hardware Group and the Ethics Group to advance expert recommendations, consensus statements, and the establishment of subsequent standards.

The absence of clear evaluation criteria also indicates that medical-grade brain-computer interface (BCI) technology has not yet matured and cannot be immediately commercialized. Li Xiaojian refers to BCI as a future industry—characterized by low technological readiness levels and relatively long translation timelines—and he further explains why different scientist-led startup teams make varying choices between full-time and part-time engagement.

“If the underlying technology is close to the final product, it is akin to a sprint, where full-time commitment can easily drive rapid progress. If the technology is far from mass production, it resembles a marathon; in this case, scientists remaining active in academia—maintaining scientific cutting-edge status, technological advancement, and academic outreach—will provide critical impetus for technology iteration, clinical research, and regulatory approval.”

Li Xiaojian has thought it through clearly,“Driving industrial innovation through scientific and technological innovation” must be premised on market logic, technological maturity, and the development level of the industrial chain.

“Given the incomplete domestic supply chain for medical-grade brain-computer interfaces (BCIs), he has positioned his R&D efforts toward developing a 100-channel implantable wireless BCI system. ‘For thousand-channel implantable wireless BCI systems like Neuralink’s, China still lacks mature upstream technologies, posing significant risks to system integration and commercialization,’ he said.”

To Wu Jing and Li Ling, “frontier” is merely one facet of the translation of scientific research achievements.

Wu Jing is a staff member at a third-party technology transfer service agency that maintains good relations with Chengguo Bureau. He told us that, from the perspective of hospitals—as opposed to universities—clinical innovation is a form of applied innovation. Many innovations by clinical experts are aimed at addressing practical issues in clinical diagnosis and treatment, such as improvements in medical devices and enhancements in drug efficacy.

Due to the limited staffing in hospital research departments, the hospital’s Technology Transfer Office (TTO) is typically responsible for broad-level collection and management tasks. In contrast, the third-party service provider with which the hospital has signed a cooperation agreement offers more detailed services for innovative achievements, including project tracking, resource matching, and specialized training, evaluation, and commercialization support.

As a third-party service provider for technology transfer,Their goal is not merely to facilitate a single transaction, but rather to align outcome-based projects with market demands to achieve commercialization.

For each project, Wu Jing’s team first conducts in-depth research on listed or large enterprises within the relevant sector to understand their needs and resources, followed by precise resource matching. This approach proves more effective than simply posting information online.

Resource matching is merely the first step. He told Chengguo Bureau that, more importantly, specialized services must be provided throughout the entire conversion process. First, it is essential to ensure that the value of patents and technologies is fully reflected, avoiding unreasonable transactions resulting from undervaluation. Second, a deep understanding of corporate needs and demands is required; whether it involves expert endorsements, expansion of sales channels, or enhancement of corporate influence, these must be clearly understood and met to the greatest extent possible. Finally, assistance should be provided at every stage of product development, including technological refinement, staffing supplementation, and channel expansion.

Earlier, Li Ling, a Scientific Innovation Project Manager at a foreign pharmaceutical company, reached out to Wu Jing through Chengguo Bureau to explore opportunities for industry-academia-research collaboration. Li informed Chengguo Bureau that the sales volume of foreign pharmaceutical companies had plummeted due to the centralized procurement policy. Relying solely on existing products was insufficient for survival; these enterprises needed to identify new growth drivers. Given their relatively weak in-house original research and development capabilities, the commercialization of scientific achievements had become their second growth curve.

“Many university faculty members also have a need to commercialize their scientific research achievements. They may choose to sell their patents or seek collaborative R&D partnerships with pharmaceutical companies. This presents a valuable opportunity for pharmaceutical firms.” Therefore, Li Ling’s team first conducts industry research to focus on emerging technological fields, such as AIGC and artificial intelligence. Once specific products or technologies are identified, they conduct in-depth analyses of the technologies themselves, gain insights into relevant R&D activities at laboratories or enterprises, and carry out preliminary site visits and meetings.

In Li Ling’s view, establishing collaboration among industry, academia, and research is no easy feat. She needs to evaluate the application scenarios and market value of outcome-based projects from the perspectives of corporate strategic layout and market demand.。

“The essence of capital is the pursuit of profit; it does not make contributions without reason,” Zhang Qiang stated frankly. “The research and development of technology, particularly frontier and breakthrough innovations, often originates in the laboratories of universities and research institutions. These efforts rely on national research funding rather than being driven by capital.”

In fact, the primary role of capital in the translation of scientific research and innovation is to provide financial support. However, this presupposes that a series of key elements are effectively integrated:Technology must be mature, market demand must be clear, and the policy environment must be favorable. Only when these conditions are met will capital be willing to make substantial and sustained investments.。

As the bubble bursts, capital constraints are forcing investors to become more rational, and their investment logic has shifted accordingly. An investor told VCBeat that while they previously focused on industry giants and cutting-edge technologies, they now prioritize projects featuring incremental innovations and founding teams with strong market awareness.

The focus is shifting from merely pursuing cutting-edge technology and the prestige of professors to prioritizing market applicability and commercial viability. Investors are gradually aligning their project evaluation criteria with market demands, placing greater emphasis on tangible business value. Early-stage investment in technology transfer is transitioning from an academic-driven to a market-driven approach, a shift whose butterfly effect is also impacting scientist-entrepreneurs.

Wang Qi is a professor at a prestigious "985" university in China and the founder of a medical device company. His entrepreneurial journey was not an immediate match with investors, but rather a solitary venture undertaken after numerous unsuccessful attempts to secure funding.

At a closed-door meeting, a familiar CEO told him, “Your technology is highly advanced, but the costs and risks are too high. In the current environment, few companies have the capacity to take it on.” Left with little choice, he launched his own startup, adopting a “product iteration” strategy—prioritizing micro-innovations and low-cost products to quickly penetrate the market and demonstrate value to investors.

Looking back, the commercialization of scientific research outcomes must adapt to market dynamics: when capital is abundant and policies are supportive, cutting-edge projects with high levels of innovation can seize the momentum; whereas during economic downturns, when collaboration among industry, academia, and research institutions remains incomplete, projects capable of rapid implementation are favored. Most of the research projects Zhang Qiang evaluated this year were essentially passed over. He said,Only after implementing a series of changes can new pathways be seen.