Colorado State University, CSU Ventures Create New Private Equity Investment Fund to Advance Research Innovation
Colorado State University and CSU Ventures have created CSU Fund I LLC, a private equity investment fund to help advance early-stage companies associated with CSU.
CSU Fund I held its final close March 31. The fund has already made one investment and is evaluating several other investment opportunities. The fund is managed by CSU Management Corp., a subsidiary of the private, non-profit CSU Ventures Inc., which helps the university to commercialize new research innovations associated with business development, global partnerships and critical commercialization activities.
“This resource offers a critical piece of the puzzle for accelerating our cutting-edge research,” said Tony Frank, president of Colorado State University. “We are pleased that investors see the promise in Colorado State’s faculty and research excellence. Few universities have initiated this type of fund, which says a lot about the potential impact, success and commercial value of our programs as well as investors’ support of CSU.”
CSU Fund I, a 10-year private investment fund, is intended to provide seed and early-stage capital to promising new companies associated with Colorado State University. The fund is expected to enhance wealth creation for its investors and portfolio companies through strategic, ROI-focused investments. In time, these investments are expected to help propel university startups and early-stage businesses to large commercial success including high-paying job creation and contributions to the regional economy.
Fort Collins is well known for its innovation and entrepreneurship, bringing together a strong collection of partners, including CSU, the city of Fort Collins and the regional business incubator, RMI2.
The fund was based conceptually on an angel fund created in North Carolina in the early 2000s, said Mark Wdowik, president and CEO of CSU Management Corp. and executive fund director for CSU Fund I. The Inception Micro Angel Fund was associated with the University of Northern Carolina System and the Small Business and Technology Development Center to spur economic development in the Triad region. The angel fund was started with initial investment of about $2 million by private investors to help spur entrepreneurship in an economically challenged area recovering from losses in the furniture and textile industries.
Wdowik served as the executive director of the technology transfer office at the University of North Carolina at Charlotte before joining Colorado State in 2006.
“These days, most venture capitalists won’t put money into investment opportunities unless the company’s making money and has customers in hand, which leaves few investing in early bright new ideas at such an early stage in the company’s lifecycle,” Wdowik said.
More details about CSU Fund I:
• Companies that ultimately receive an investment from CSU Fund I must have an established association with Colorado State University such as a licensing relationship, research partnership, joint venture or other similar business relationship with the university.
• All money invested in the fund is from private investors, including individuals and large investment funds; no state money has been invested. This differs from other funds associated with public universities, which leverage state investments or a mix of public and private funding, Wdowik said.
• The fund seeks to leverage its investments through syndication – investments made with other venture capital firms, angels, and private equity firms. Small investments by the fund make up a small portion of a company’s financing needs.
• CSU Fund I will also look for opportunities to leverage other funding sources such as federal agencies – through programs like the Small Business Innovation Research and Small Business Technology Transfer programs – and state commercialization programs such as Colorado House Bill 1001.
• Prieto Battery Inc., a Colorado State startup, was the first investment made by the fund. The company, developed by chemistry Professor Amy Prieto, has developed advanced nano-based batteries up to 1,000 times more powerful, 10 times longer-lasting and cheaper than traditional batteries – technology that could revolutionize the military, automobile and health care industries. CSU Fund I co-invested with another large investment fund from the region.
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