Fund to Back Independent, Early Stage Science Companies

Entrepreneur and investor Peter Thiel has started Breakout Labs, a funding source to help independent scientists and early-stage companies develop their most radical ideas. Thiel announced Breakout Labs last night at a meeting of Business Association of Stanford Entrepreneurial Students in California.

Thiel aims to provide financing for visionaries whose ideas are too ahead of their time to find support from conventional grant or venture funding methods. “Through Breakout Labs,” says Thiel, “we’re going to create opportunities for revolutionary science by cultivating an entrepreneurial research model that prizes extreme creativity and bold thinking.”

Breakout Labs expects to fund projects at very early stages on topics outside the scope of federal funding, which are often allocated to fields of study based on current national interests or within the academic mainstream. The initiative also plans to support platform technologies that can have a broad impact, but may lack an immediate commercial payback. The fund anticipates as well backing projects that fall between proof-of-concept and commercialization — the so-called “valley of death” stage in science-based enterprises.

Financing agreements with Breakout Labs are expected to range from $50,000 to $350,000, based on a revolving fund model where successful projects help support similarly funded ideas in the future. Companies supported by Breakout labs can retain full intellectual property (IP) rights to their technologies, but assign a royalty stream or opt for a small investment in their companies by Breakout Labs. Another option for funded companies is to assign IP rights to Breakout Labs in exchange for a substantial royalty stream from future revenues.

Thiel is a co-founder of and executive at PayPal, as well as an early investor in Facebook, where he now serves on the board. He has gone on to found other technology-based enterprises and venture companies.

Read more:

• Venture Company to Invest in Early-Stage Science Enterprises
• AngelSoft Becomes Gust, Offers Start-Up Funding Platform

Photo: borman818/Flickr

*     *     *