TLDR:
- Government grants linked to economic development are driving the trend of setting up university venture funds
- Only a third of US research universities have a venture fund
Setting up university funds is becoming a trend, with many top academic institutions in the US considering launching funds to invest in spinouts. Government grants linked to economic development are driving this trend, as governments expect a commercial return on investments made in universities. University venture funds have been shown to increase rates of creating new spinout companies, but only a third of US research universities currently have a fund.
University funds vary in structure, with some universities having their own funds like the University of Michigan’s Accelerate Blue Fund, while others partner with multiple academic institutions to start a fund, such as the Michigan University Innovation Capital Fund. Partnering with existing external funds, like Pack Ventures, can also be a model for universities to consider, allowing them to invest in spinouts without the perceived conflict of interest of an internal fund.
Team up with other universities is another efficient way to start a fund, especially for smaller institutions lacking resources. The Maryland Momentum Fund in the US, launched in 2016, is a good example of how multiple academic institutions within a state can join forces to create a fund. Emphasizing creating value beyond just making money, and engaging with the university system’s technology transfer offices and workforce development are key aspects of such funds.
