IBJNews

Indiana University launches $10M seed fund

Back to TopCommentsE-mailPrintBookmark and Share

Indiana University has formed a new $10 million venture capital fund intended to help companies in their earliest stages of development get off the ground.

The Innovate Indiana Fund was underwritten by the university and private donors. Over the next five years, IU President Michael McRobbie intends for it to make $5 million in equity or convertible debt investments, each ranging from $50,000 to $150,000, to spur initial commercialization of technologies developed in IU laboratories.

The fund’s other $5 million will go toward slightly later-stage investments of between $150,000 and $350,000 to help established IU-affiliated startups bring their products and services to market.

With several potential investments already in its pipeline, the Innovate Indiana Fund immediately became one of the largest sources of early-stage capital for entrepreneurs in the state. BioCrossroads’ Indiana Seed Fund, formed in 2005, has $6 million in capital under management. IU aims to ink four or five early-stage deals annually, with a similar number of later-stage deals.

“We wanted it to be significant enough that it would be impactful and to make a statement that Indiana University is very serious about supporting technology commercialization, said IU Vice President for Engagement Bill Stephan. “We feel an obligation to do everything we can to contribute to the state’s economic vitality.”

Stephan said IU already this year made several changes to encourage faculty entrepreneurship, such as increasing the proportion of gains that research professors and their departments earn when their discoveries lead to license fees or royalties. IU has also dedicated its new Bloomington high-tech IU Innovation Center facility, a sister to the IU Emerging Technologies Center business incubator in downtown Indianapolis on the Central Canal.

In its history, IU’s Research and Technology Corp. has licensed IU technologies to a total of 38 startup companies. In fiscal 2009, which ended June 30, IU applied for 186 patents, disclosed 131 inventions and licensed 34 technologies. During the period, five of IU’s previous patent applications were granted.

IU hopes to make the Innovate Indiana Fund “evergreen,” and at least partially self-sustaining. The university has set a target of reinvesting a compounded annualized return of 15 percent into the fund in its fifth year. It also expects a quarter of its early-stage investments will simultaneously attract outside venture capital. The university aims for half its later-stage seed investments to leverage outside venture money.

The university has established a high-caliber investment committee to approve the Innovate Indiana Fund’s deals. Members include IU School of Medicine Dean Dr. Craig Brater, Baker & Daniels partner Chuck Schalliol, IU chemistry professor Ted Widlanski, TL Ventures Managing Director Emeritus Dr. Gary Anderson, former Angel Learning CEO Christopher Clapp, and IU Research and Technology Corp. President Tony Armstrong.
 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. I am not by any means judging whether this is a good or bad project. It's pretty simple, the developers are not showing a hardship or need for this economic incentive. It is a vacant field, the easiest for development, and the developer already has the money to invest $26 million for construction. If they can afford that, they can afford to pay property taxes just like the rest of the residents do. As well, an average of $15/hour is an absolute joke in terms of economic development. Get in high paying jobs and maybe there's a different story. But that's the problem with this ask, it is speculative and users are just not known.

  2. Shouldn't this be a museum

  3. I don't have a problem with higher taxes, since it is obvious that our city is not adequately funded. And Ballard doesn't want to admit it, but he has increased taxes indirectly by 1) selling assets and spending the money, 2) letting now private entities increase user fees which were previously capped, 3) by spending reserves, and 4) by heavy dependence on TIFs. At the end, these are all indirect tax increases since someone will eventually have to pay for them. It's mathematics. You put property tax caps ("tax cut"), but you don't cut expenditures (justifiably so), so you increase taxes indirectly.

  4. Marijuana is the safest natural drug grown. Addiction is never physical. Marijuana health benefits are far more reaching then synthesized drugs. Abbott, Lilly, and the thousands of others create poisons and label them as medication. There is no current manufactured drug on the market that does not pose immediate and long term threat to the human anatomy. Certainly the potency of marijuana has increased by hybrids and growing techniques. However, Alcohol has been proven to destroy more families, relationships, cause more deaths and injuries in addition to the damage done to the body. Many confrontations such as domestic violence and other crimes can be attributed to alcohol. The criminal activities and injustices that surround marijuana exists because it is illegal in much of the world. If legalized throughout the world you would see a dramatic decrease in such activities and a savings to many countries for legal prosecutions, incarceration etc in regards to marijuana. It indeed can create wealth for the government by collecting taxes, creating jobs, etc.... I personally do not partake. I do hope it is legalized throughout the world.

  5. Build the resevoir. If built this will provide jobs and a reason to visit Anderson. The city needs to do something to differentiate itself from other cities in the area. Kudos to people with vision that are backing this project.

ADVERTISEMENT