University of Michigan begins $25M 'breakthrough' startups initiative

Posted on December 19, 2011

Startups, get ready.

University of Michigan’s initiative to invest $25 million of its $7.8 billion endowment into its own startups has officially begun.

The U-M Board of Regents on Thursday gave the nod to President Mary Sue Coleman’s initiative and, according to Executive Vice President and Chief Financial Officer Timothy Slottow, the investing process can begin immediately.

Coleman announced the Michigan Investment in New Technology Startups initiative in early October, much to the glee of the Michigan venture capital industry, which has been lobbying the university to fund entrepreneurial companies for years.

During the regents meeting Slottow praised U-M’s investment office for “really working through this breakthrough project and fund” and said the school will “start investing as soon as we can.”

He highlighted that the program was the first of its kind.

Such a program “really doesn’t exist in any other universities,” he said.

In a memo to regents, Slottow said the MINTS program will not only hopefully yield competitive investment results, but will also make university startups more visible.

In early October, Coleman said that U-M actually lost out on significant investment returns by not investing in its own startups sooner.

“Analysis shows that if we had, in fact, invested in these startups, the returns would have been healthy, the returns would have been competitive with our VC portfolio,” she said. “Simply put, University of Michigan startups are a good financial opportunity.”

The university produces an exceptionally high number of entrepreneurial companies each year. The Tech Transfer Office, the university entity that commercializes intellectual property created by faculty members, facilitated 11 startup companies in fiscal 2011, 10 startups in fiscal 2010 and eight in fiscal 2009.

In the last 11 years. the office has spawned a total of 104 startups.