The Maricopa County Industrial Development Authority (MCIDA) has awarded a $1 million grant to the ASU Foundation for A New American University to create a venture capital fund. The fund will be invested in companies that benefit from ASU-supported accelerator programs, helping them take the next step in their development with early-stage manufacturing startup support.
Accessing this early-stage risk capital will allow Arizona companies and entrepreneurs to create jobs and wealth. This is in keeping with the mission of the MCIDA: to create and maintain jobs within Maricopa County and help residents achieve a better standard of living and way of life.
“When the IDA partners with ASU it makes both organizations stronger,” said David Adame, president of the authority. “One of the fundamental goals of the IDA is to spur economic development with a focus on job creation. This agreement with ASU will help improve the fiscal health of our community.”
The venture capital fund was developed by the ASU Foundation and two university initiatives: the Entrepreneurship and Innovation Group and ASU’s technology transfer arm, Arizona Technology Enterprises (AzTE).
This evergreen fund will take small equity positions in each company that receives investment capital in transactions ranging from $50,000 to $250,000. EIG and AzTE will select companies for investment through a process developed in consultation with donors. The final approval will be given by a selection committee. As a company matures and realizes liquidity, proceeds will flow back to the fund to be re-invested in future companies. ASU’s goal is to build the fund to $10 million through private donations.
Gordon McConnell, ASU’s associate vice president of Entrepreneurship and Innovation and a general partner of the new fund adds, “Early stage venture capital is critical for startups, particularly for manufacturing entrepreneurs. We feel this fund helps fill a significant gap that exists in Arizona to help support the growth of startups that are coming out of the many successful accelerator programs that are based in ASU SkySong. Trying to raise a venture fund is difficult, and with this gift from MCIDA we have a tremendous start and plan to grow the fund over time to $10 million, allowing high growth companies to access capital for development and job creation.”
In 10 years, AzTE has supported the launch and development of 67 ASU spinoff companies. Spinoffs based on ASU-developed technologies raised $68 million in external funding during the 2013 fiscal year. Altogether, companies licensing ASU discoveries have raised nearly $400 million in venture funding since AzTE’s creation in 2003.
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