Last modified: Friday, December 4, 2009
IU unveils $10 million Innovate Indiana Fund for investment in faculty research
FOR IMMEDIATE RELEASE
Dec. 4, 2009
BLOOMINGTON, Ind. -- Indiana University today (Dec. 4) unveiled a new $10 million venture capital fund aimed at investing in the development of innovations and technologies created at the university.
Indiana University President Michael A. McRobbie said the goal of the new Innovate Indiana Fund would be to assist in the translation of new concepts and technologies created at IU into the marketplace as commercial products, services and treatments developed by emerging technology-based companies.
Indiana University President Michael A. McRobbie has announced the creation of a $10 million Innovate Indiana Fund designed to invest in new concepts and innovations created at the university.
"Indiana University understands the need for commercially-focused research and technology development and the important role the university plays in serving as a catalyst for economic growth for Indiana," McRobbie said. "In fact, creation of the Innovate Indiana Fund directly addresses the Indiana Commission on Higher Education's recent request for the state's research universities to find new ways to contribute to the economic enrichment of Indiana. This fund gives us yet another tool to help us in our role as an economic driver in the state."
Funded solely from university and private donor sources, the Innovate Indiana Fund will provide $5 million over the next five years in early stage seed funds and another $5 million over that same time for late stage seed investment. Individual early seed investments would range from $50,000 to $150,000 each, while late seed investments would range from $150,000 to $350,000 each, according to IU Vice President for Engagement Bill Stephan.
"Indiana University is committed to supporting its world-class research faculty and fully intends to utilize the Innovate Indiana Fund as an important resource available to entrepreneurially-oriented research faculty members to provide them with critically needed capital in initial development stages," Stephan said. "This new fund can also play a part in attracting other top talent to the university as it sends a clear signal that IU is focused on entrepreneurial research and understands that commercialization must be a priority for the future."
Tony Armstrong, president of Indiana University Research & Technology Corp., said funds could begin to flow to start-ups in 2010. IU RTC will offer start-ups access to business incubation and laboratory facilities at the Emerging Technology Center in Indianapolis and the recently-opened IU Innovation Center in Bloomington, while also providing value-added business planning and development resources, investment "pitch" preparation and introductions to capital providers.
"IU RTC is the conduit for Indiana University to turn ideas and discoveries into viable businesses which in turn stimulate Indiana's economy," Armstrong said. "What is unique about the Innovate Indiana Fund is that it will not invest in other funds and only in technologies and companies. And the companies that the IIF will invest in will be Indiana companies that have a direct connection or affiliation with Indiana University that are working on commercial applications, marketable products and services of IU-developed research and technology."
Targets for the Innovate Indiana Fund include the creation of four or five companies each year, that one in four early seed investments also obtain non-IU seed funding during subsequent seed stages, and that half of the late seed investments obtain other venture capital funding.
In addition to the fund serving as a catalyst in the commercialization of IU-developed research and technology, it would also be operated and managed to succeed from a financial returns standpoint. An additional target for the fund is a compound annualized return of 15 percent for reinvestment into the fund in its fifth year.
IU officials said the fund has the potential to stimulate additional interest from Midwest and national venture capital companies and that its creation is well-timed to build on recent intellectual property successes at IU that are drawing interest and income from out of state sources.
"Early stage capital is scarce both in Indiana and in the United States as a whole, and emerging companies frequently face a funding gap when capital is needed for the initial steps necessary to transform technology from research into a commercial product," McRobbie said. "IU can play a significant role in bridging this critical capital gap by serving as a vital new source of funding, thus enhancing opportunities for Indiana technology and life science companies to not only be formed, but to thrive as well."
Named to serve as Investment Committee Members for the Innovate Indiana Fund were IU School of Medicine Dean Dr. Craig Brater, attorney and Biocrossroads Director Charles Schalliol, IU chemistry Professor Ted Widlanski, TL Ventures Managing Director Emeritus Dr. Gary Anderson, former Angel Learning Chief Executive Officer Christopher Clapp and IU RTC's Armstrong.
For more information, please contact Steve Chaplin, University Communications, at 812-856-1896 or stjchap@indiana.edu.
