New investment fund to offer early-stage capital for U-M startups
Michigan News | by Dave Wilkins
U-M Tech Transfer, the unit responsible for commercializing University of Michigan research discoveries and innovations, will create the Accelerate Blue Fund to provide seed capital to nascent U-M startup companies.
Creation of the fund was approved Oct. 17 by the U-M Board of Regents.
“There are enormous benefits to the university and our region in accelerating the growth of U-M startup companies and maintaining a vibrant startup ecosystem,” said Kelly Sexton, associate vice president for research – technology transfer and innovation partnerships.
“Students and faculty are attracted to universities that facilitate innovation and entrepreneurship at all levels, and we believe the Accelerate Blue Fund will extend the progress U-M has already made in this area.”
A nonprofit, philanthropic fund is ideal for this type of investment, she added, because early-stage startup investing requires patient capital and risk tolerance.
The new fund will be initially funded with $250,000 in donations secured for this purpose. A fundraising effort is being launched with a goal of at least $20 million in additional gifts. The fund will begin accepting startup investment applications after it has raised $2 million.
Wendell Brooks, president of Intel Capital and College of Engineering alumnus, provided a personal gift to seed the fund.
“I am proud to be an early supporter of the Accelerate Blue Fund,” he said. “I am a strong believer that the university needs to invest in and nurture startups from our talented faculty and students. I know my donation to this evergreen fund will support the Michigan startup ecosystem and keep our best and brightest in Ann Arbor.”
The Accelerate Blue Fund is modeled on the Michigan Biomedical Venture Fund, which the regents established in 2016 to support U-M startup companies with a biomedical or health-care focus.
The new fund fills a gap for seed capital — outside the MBVF’s health-care focus — for startups whose products have early market validation, a strong value proposition, a feasible commercial path, at least one founder focused on the venture, and a good chance at follow-on funding or exit within two years of securing seed capital.
“Opportunities for collaborative innovation at the University of Michigan are unparalleled given our strengths in research and scholarship across a wide variety of disciplines,” said Rebecca Cunningham, interim vice president for research. “The Accelerate Blue Fund will help ensure that innovations developed on our campuses achieve broader use to help solve challenging societal problems and enhance the quality of life.”
The Accelerate Blue Fund will be supervised by a fund manager working under the direction of the associate vice president for research – technology transfer and innovation partnerships, and guided by an investment advisory board. The board will be chaired by Chris Rizik, a Law School alumnus and CEO of Renaissance Venture Capital.
“It’s wonderful to see U-M bring additional investment capital into our ecosystem,” Rizik said. “It is addressing a critical need.”
Richard Douglas is chair of the U-M Tech Transfer National Advisory Board, an LSA alumnus and an Accelerate Blue Fund donor. He emphasized the fund’s primary objective is to enhance the transfer of U-M innovations into the world.
“We are confident these early investments into U-M startups will help them propel U-M innovations forward so they have a greater chance of making a positive societal impact,” Douglas said. “That’s what this is all about.”
LSA alumnus Robert Bronstein, co-founder of Scion, North America’s leading private owner and operator of student housing, also provided an early donation.
“This gift achieves my goal of supporting the university in a direct and tangible way,” he said. “In addition to promoting research and innovation, the Accelerate Blue Fund is the perfect vehicle to create opportunity and economic growth.”
Tech Transfer recently reported that a record 22 startup companies were launched at the university in fiscal year 2019. The office will host the 19th Annual Celebrate Invention to highlight the university’s growing innovation ecosystem on Oct. 22 at the Michigan League.