TUN
The University Network

UMass Amherst Launches Venture Fund For Start Ups

Our modern age of innovation and entrepreneurship has seen many success stories in the U.S., in no small part thanks to college students. More and more students are launching companies from their dorm rooms every year, while recent graduates use the lessons they learned during their undergraduate years to do the same. Colleges themselves are also beginning to serve the economy in innovative ways too, in keeping with the entrepreneurial culture gripping the U.S. educational environment.

One such college is The University of Massachusetts Amherst.  

The color maroon has been commonly associated with The University of Massachusetts Amherst throughout New England, but may be symbolizing something else going forward. Last week, UMass Amherst announced the formation of a for-profit venture fund named The Maroon Venture Partners Fund I, LP, which is intended to ”increase entrepreneurial activities and job creation in the Pioneer Valley.” As Chancellor Subbaswamy put it, “UMass Amherst, as the Commonwealth’s flagship, plays a crucial role in the state’s innovation economy. Our research in fields such as applied life sciences, advanced manufacturing, food science, big data and climate science are internationally recognized. The ingenuity and expertise of our faculty and students, as well as our alumni, provide fertile opportunities for private and university investment to jointly enrich our economic future.”

The fund will serve as a “catalyst for innovation and entrepreneurship throughout the UMass Amherst community.” It will be managed by Maroon Venture Partners, LLC, a limited liability company overseen by an investment committee consisting of five members. The committee will be volunteering their time, so the money that would normally be paid to fund managers would be donated to the university. The committee’s willingness to serve pro bono is to be commended.

TUN spoke to Charles Johnson, a committee member and Managing Director of the fund, to get his personal take. Johnson currently serves as Clinical Associate Professor at the Isenberg School of Management – UMass Amherst where he teaches courses in entrepreneurship, and is also an Associate Director of the Berthiaume Center for Entrepreneurship. Johnson brings with him over 30 years experience in business law, which will no doubt benefit the fund.

Many of the companies started by the faculty, students and others throughout the UMass Amherst community need a financial jumpstart to build prototypes or achieve other milestones critical to attracting traditional venture capital,”

Johnson tells TUN. “We hope that we can help to bridge that gap.” Johnson will be overseeing the day to day operations of the fund.  

The fund was created to invest in early stage projects that are directly linked to the university. Investments in these projects would typically range from $50,000 to $200,000 over a span of three years, and will be harvested in ten years. The success of the fund could lead to creation of other funds.

Entrepreneurs seeking funding are required to apply online or to upload a business plan with the required information. Applicants with the most potential and also deemed to be a good fit for the fund will be invited to appear before the fund’s investment committee and present their idea or project.

The fund raised $1.5 million in January 2017 with UMass Amherst alumnus Paul Mannering investing $1 million and the university itself investing $500,000, and will continue to accept investments of $100,000 or more from accredited investors until June 15, 2017.  

The fund is also open to those who wish to support the fund but are willing to forego the returns from investments. Such supporters could donate money to UMass Amherst and specify that the money should be invested in the fund.

And how do UMass Amherst students feel about their university’s new venture? So far, the response seems to be generally quite positive. Students at the Isenberg School of Management are enthusiastic about the fund’s potential and the opportunities it opens up.  

TUN spoke to Cameron Besse, a senior at Isenberg who is pursuing a dual degree in Resource Economics and Sports Management, about his perception on the fund.  

The Maroon Venture Partners Fund reaffirms the University’s promise to cultivate innovation by providing young entrepreneurs additional options beyond local incubators and venture funds,”

states Besse, who is indirectly involved with the fund as a result of his work with a local execrator program. He is also a member of the executive board of the Venture Consulting Club consisting of students from the five Amherst colleges, which consults startup companies for Berthiaume, Valley Venture Mentors, and the Springfield Venture Fund.

Besse also noted that “There are countless ideas in IALS and within the Berthiaume Center that now have a chance to move beyond the napkin stage.”

UMass Amherst is not alone in its quest to help stimulate the local economy through the creation of a venture fund. Other universities, such as John Hopkins have launched similar ventures, helping their communities both on and off campus grow and prosper.

Will more universities follow suit and help this trend continue? We hope so.

RELATED: UConn Student Makes a Splash in the Startup World

Samuel O'Brient grew up in western Massachusetts, though most of his days are spent at Sarah Lawrence College in Westchester, New York. His time there is spent studying business communications and serving as editor in chief of the SLC Economic Review. As a writer, journalist, and blogger, he has written for many different online venues on a variety of topics. When he's not working on his blog, Samuel can often be found sailing, on the golf course, or on the tennis court.