New fund has $20M to spur university startups
The new W Fund will have $20 million of venture capital to help launch businesses based on innovations at the University of Washington and other local research institutions.
Seattle Times business reporter
The Seattle area's newest venture-capital fund has a distinct purple-and-gold tinge.
The W Fund, which aims to channel seed money to startups founded on research from the University of Washington and other state universities and institutions, officially launches today after months of behind-the-scenes fundraising.
Backers see it as a way to help create new businesses — and new jobs.
The fund has raised an initial $10.6 million from 44 investors, according to regulatory filings.
Along with a $5 million loan from the state (funded through a federal small-business grant) and $3 million in nonstate funds from the UW, the fund's investment committee has close to $20 million to direct.
That should be enough to fund some two dozen startups over the next four years, said general manager Linden Rhoads.
Though at least half of the fund's investments will go to UW spinouts, she said, the rest will be available for companies spun out from other schools and research institutions.
Already, she said, Washington State University, the Fred Hutchinson Cancer Research Center, the Pacific Northwest National Laboratory and the Benaroya Research Institute have presented to the W Fund on their pipelines of potential spinout companies.
"We're prepared to move very quickly" on making investments, said Rhoads, vice provost of the UW's Center for Commercialization.
Though the fund's investment committee includes several prominent figures in the worlds of venture capital, technology and life sciences, Rhoads said it won't focus on any particular industrial sector.
Among the committee members are Chad Waite and Lucinda Stewart, of OVP; Tom Alberg and Greg Gottesman, of Madrona Venture Group; Ron Howell and Luciana Simoncini, of the Washington Research Foundation; Steven Gillis, of Arch Venture Partners; and Steve Singh, CEO of Concur Technologies.
Singh, who said he's invested about $1 million in the W Fund, said it can help meet a shortage of capital for very early-stage businesses — those which may be little more than a bright idea or a cool lab creation.
"These are opportunities that typically don't get investment, but they are the kernels that can led to great companies," he said. "Universities have a tremendous amount of innovation and invention happening within their four walls, and this is a way to harness that and turn it into products and businesses and jobs."
The fund represents another move by the UW to accelerate the commercialization of academic research and build businesses around professors' and students' discoveries and inventions. Earlier this year, the university opened a 23,000-square-foot incubator inside Fluke Hall to provide lab and office space to startups with some connection to UW research.
U.S. research universities — many of them pinched by cuts in public support — have stepped up their commercialization efforts. The University of Texas launched its $10 million UT Horizon Fund last fall; New York University began a $20 million Innovation Venture Fund in 2010. The University of Michigan and Columbia University, among others, have similar funds.
Drew DeSilver: 206-464-3145 or email@example.com
Information in this article, originally published June 13, 2011, was corrected the same day. A previous headline on this story said the University of Washington was launching the fund.