Most research-intensive universities in the US — including globally renowned institutions such as Stanford, Cornell and Yale — do not have their own venture fund to back spinouts.
Just 50 out of the 146 universities that are at the top rank of the Carnegie classification — a scale that measures the amount of doctoral research they produce — have an investment vehicle.
These universities, by and large, produce the most spinouts and typically have infrastructure, like incubators or maker labs, in place to support fledgling startups. Many of the tech transfer offices run entrepreneurs-in-residence programmes to bring in the right expertise to run spinouts.
Venture funds would be a natural addition to this offering so it is surprising that it remains the exception rather than the rule. University venture funds aren’t a new concept: New York University’s NYU Innovation Venture Fund has been around since 2010, the University of Texas’ UT Horizon Fund was created in 2011, Duke University’s Duke Capital Partners was launched in 2015, while MIT’s Engine Ventures was established in 2016. But the practice of setting up a fund has not spread to academic institutions despite these examples.
Geography and easy access to investors isn’t necessarily a reason why a university doesn’t have a fund. Some institutions in well-established ecosystems — such as the Massachusetts Institute of Technology — have more than one fund, while others in regions less populated by investors — such as the University of Tennessee — have none.
In fact, it is often the universities in regions that have a heavy concentration of investors that have multiple funds. The University of California, Berkeley, the University of Chicago and New York University all have multiple funds.
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