The University of California has announced plans for a venture-capital fund to finance startups created on campuses, offering financial resources to the university-housed startups that VC firms often steer clear of.
UC announced on Monday plans for a $250 million venture-capital fund to support projects and up-start companies by faculty and students. The fund, seeded with money from the university system s $9 billion endowment, would be one of the largest of its kind, targeting work done at the university s 10 campuses, five medical centers and three national laboratories, according to the Wall Street Journal.
The UC Board of Regents will vote on this proposal Sept. 18 during the board s regular bi-monthly meeting at UC San Francisco s Mission Bay campus, according to a statement by the UC President Janet Napolitano, and if approved, UC Ventures would launch in 2015.
The new fund signals the rise in campus-born startups, launched by students and often partnerships between students and faculty, not only at prestigious private institutions such as Stanford but at public universities. The UC system comprises 233,000 students and 190,000 faculty, and more than 20 incubators and accelerators already working on innovation in areas such as tech and health care. The Wall Street Journal reports that the number of university-launched startup companies topped 800 nationally in 2013, up from just under 600 in 2008, according to a survey by the Association of University Technology Managers, which tracks the licensing of research discoveries and innovations.
Recent UC startups include pharmaceutical companies. Aragon, which was acquired by Johnson & Johnson in August 2013, and Kite Pharma, which raised about $106 million in its June IPO.
University officials say the fund would take a long-term investment role, so startups won t have to focus on fundraising as their work moves forward. We see this fund as a potential vehicle for providing resources to support the basic research and talent — among both faculty and students — required to develop innovations that can benefit California and the world, Napolitano said.
The fund fills a gap left by traditional VC firms which, with a few exceptions, often steer clear of startups housed in dorm rooms or university laboratories. Some VCs have said that college startups are often to immature to be worth the risk of funding — many are first-time entrepreneurs — or, more often, VCs don t have the access and influence they want over an early-stage company if it is also under the direction of university faculty.
UC also intends to create an independent advisory board of leading figures in Silicon Valley and California to provide advice and industry insight to UC Ventures. These advisory board members will be announced in the coming months.
