Stephen R. Forrest, Vice President for Research
October 31, 2011
President Coleman recently announced that the university will invest up to $25 million over the next decade in select U-M startups. This is a winning idea for all: for U-M entrepreneurs, for the University?s endowment, for the state, and for the nation.
The initiative, which shows that even a large and complex institution like U-M can be entrepreneurial, is another step that shows the University?s commitment to encouraging faculty engagement in the larger society. It comes from thinking big, and thinking globally about its mission.
The idea behind the Michigan Investment in New Start-Ups (MINTS) initiative is to invest up to $500,000 of university funds in start-ups whose businesses are based on ideas and insights emerging from faculty research.? To be eligible, the company must first secure initial funding from a qualifying venture capital firm that has independently assessed its potential. (Further details below.)
For fledgling companies, this early stage support is critical. It is a period where extra funding from any source can make a big difference in their ability to establish themselves in the marketplace.
It also makes good sense as a way to diversify U-M?s endowment investments. An independent analysis of how our spin-offs have performed over the last 20 years showed that this strategy would indeed have yielded healthy returns to U-M.? The overall quality of startups out of our university, measured by any reasonable standard, has been outstanding.
But the value of the MINTS initiative goes far beyond the financial return on investment. It shows our faith in the creativity of our faculty, and by helping spur the success of our own start-ups, it also helps strengthen the culture of entrepreneurship at U-M while expanding the entrepreneurial infrastructure here in Michigan.
Entrepreneurs thrive in the company of other entrepreneurs, and over the last decade in particular, the area around Ann Arbor has become known as a great place to start an enterprise. By working to ensure the success of more start-ups, we can help draw even more entrepreneurs and more investments into the region. With this initiative, we are sending a strong message to our partners across the globe:? U-M believes in the potential of ideas emerging from our campus; we are investing in them, and so should they.
More broadly, MINTS helps us fulfill our mission as a public research university. Our $1.24 billion research enterprise is one of the largest of any university in the world. Part of our obligation is to help ensure that society benefits from the ideas that arise from our laboratories and classrooms. New company creation is one of the many ways this happens.
The spirit of entrepreneurship is at the heart of the American character, and it has long been a significant driver of our nation?s economy. By helping to create successful role models that will inspire this spirit in new generations of faculty and students, MINTS is a true investment in our future.
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The Michigan Investment in New Start-Ups (MINTS) initiative
The MINTS initiative is an opportunity for the University of Michigan is to leverage commercialization efforts by the Office of Technology Transfer (OTT) for investment purposes while demonstrating support for U-M start-ups. The details are as follows:
- Investments made under this initiative would apply only to start-ups based on U-M technology.
- Investments would be made subsequent to the initial round of funding, and where an independent professional venture capital investment firm is also participating.
- The University has no obligation to invest in any particular start-up that may meet the above criteria.
- Each investment in a qualifying round of financing would be capped at the lesser of (1) the amount the university is permitted to invest under existing rights and agreements, or otherwise, (2) 2.5% of the total amount of the round of financing, or (3) $500,000.
- The program will be managed by the University?s Investment office, with the support of OTT and the General Counsel?s Office, as part of the University?s long-term portfolio of investments.
Source: http://research.umich.edu/blogs/vpr/2011/10/31/mints-investing-in-the-future/
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