Newly-formed W Fund includes heavy hitters from Seattle venture capital

OVP's Chad Waite is among the members of the W Fund

University of Washington vice provost of commercialization Linden Rhoads wants the state’s largest research institutions to spin-out more innovative technologies, creating new startups that fuel the economy and create jobs.

And now she’s getting much closer to that goal with the creation of the W Fund, which we wrote about yesterday after the state’s Department of Commerce funneled $5 million into the investment vehicle. Expected to open for business in February, the new fund is expected to launch with about $25 million in its coffers.

In an interview with GeekWire, Rhoads said that the W Fund plans to invest $250,000 to $500,000 in about 25 to 30 early-stage companies over the next five years, focusing efforts on upstarts that have strong ties to research universities in the state.

Linden Rhoads

The structure of the organization is unique. Rhoads is serving as general manager, while UW business students will act as “venture associates” who perform some of the initial due diligence on deals.

Students will not make final investment decisions, but they will be available to advise and provide feedback to the investment committee.

That’s a 20-person group consisting of a who’s who of Seattle’s venture capital, entrepreneurial and technology community. Evenly split between IT and life sciences, the group will meet monthly to allocate funds and discuss new opportunities.

Most of the members of the committee also are investors in the W Fund, mirroring the community effort that Andy Sack used to create TechStars Seattle which also raised cash from a wide cross-section of the Seattle community.

In the case of the W Fund, the investments will be larger than those provided through TechStars. They will focus also on groundbreaking science and innovations across IT, biotechnology, clean tech, materials science and other areas.

Madrona's Tom Alberg is a member of the investment committee at the W Fund

Among those participating in the W Fund’s investment committee are Madrona Venture Group’s Greg Gottesman and Tom Alberg; OVP Venture Partners’ Chad Waite and Lucinda Stewart; former Microsoft vice presidents Brian Arbogast and Will Poole; Arch Venture Partners’ Steve Gillis; biotechnology entrepreneur Bruce Montgomery; Cardiac Science CEO Dave Marver; Intellectual Ventures’ Patrick Ennis; and former GE executive Lonnie Edelheit. A representative of WRF Capital — as well as several other undisclosed individuals — also are expected to serve on the committee.

Board members include Madrona Venture Group’s Troy Cichos; University of Washington’s Paul Jenny; former WSU vice president of external affairs John Gardner; and Intellectual Ventures’ Greg Landis.

Rhoads said she’s been working hard over the past several months to assemble the group, many of whom are already actively involved in various aspects of the Seattle technology community.

“This is a large group of stakeholders who are trying to lift the tide for everyone,” Rhoads said.

She declined to discuss how the fund plans to divide investments, since some biotech and clean tech deals might require more capital than software or Internet startups. However, she said that W Fund will operated in much the same way as a traditional venture capital firm, exchanging cash for an equity stake in startup companies.

The W Fund plans to invest exclusively in teams and projects that originate from research universities and organizations in the state, with Rhoads saying she thinks there’s a big opportunity to spin-out more companies..

University spin-outs was also the topic of a recent study by the Association of University Technology Managers, which found that the University of Utah, MIT, Johns Hopkins University and other universities spun off more startups.

Will a home-grown, university-based venture capital fund help change that course?

Time will only tell.

  • Trolls?

    Is Patrick Ennis from Intellectual Ventures trying to get an early look on who to sue? Great list of participants generally, but having Patrick who failed as a VC and is a patent troll is disappointing.

    • Krassend

      Chad Waite has failed as a VC, too. He’d lost