Abstract: The investment of fund balances for industry scientific research in the transformation of scientific and technological achievements is a new direction of the reform pilot in China, which is of great significance to improve the success rate of the transformation of scientific and technological achievements and revitalize the existing capital resources. However, the implementation of the pilot task still faces institutional obstacles to the management of industry scientific research funds in colleges and universities. In China, colleges and universities are not allowed to invest in enterprises in cash, but are only allowed to invest in scientific and technological achievements. Therefore, policy design is restricted by the "upper law". How to carry out institutional innovation in the "policy red line" is the key to the implementation of the reform pilot task. Based on the theory of property rights, this paper analyzes the right allocation of horizontal scientific research funds in Colleges and universities, and puts forward a governance mechanism for the industry scientific research balances to invest in the transformation of scientific and technological achievements. The study found that the right to use and dispose of the funds given to teachers in the process of project implementation stems from the existence of tacit knowledge; and after the project is concluded, the teachers who are the executors enjoy the residual claims of the balances, so they should be given the ownership of part of the funds; at the same time, the article also finds that there are still many deficiencies in the industry scientific research fund management system of Chinese universities. Based on this, the governance mechanism of "the allocation of the residual claims→ the professional management of the capital pool → the internal carry-over investment" is proposed. For the first step, the balance of industry scientific research funds should be allocated in proportion, and the teachers' part should be accrued to the teachers' performance salary account. For the second step, teachers should be guided to invest the industry scientific research funds balances into the special fund pool, and entrust professional institutions to manage them and undertake the function of venture capital. For the last step, teachers should be allowed to use the industry scientific research funds balances in the pool to subscribe for the technical equity obtained from the pricing of some achievements held by colleges and universities, and settle accounts within colleges and universities. The research results of this paper have found the potential "discretionary space" for local governments and universities to make institutional innovation under the constraints of the "upper level law". This mechanism will help guide teachers to use the industry scientific research funds balances to invest in the transformation of scientific and technological achievements, thus deepen and accelerate the internal circulation of the "three-helix" relationship of I-U-R collaboration.