Just last week, we picked up on a new report which showed that The University of Utah, MIT, Purdue, Johns Hopkins University and other schools have had more success at spinning out startup companies than the University of Washington.
Well, now Gov. Chris Gregoire and university officials are doing something about it. As part of a program bankrolled by the U.S. Department of Treasury, Gregoire and the Washington State Department of Commerce today announced support of a new investment vehicle known as the W Fund.
The Department of Commerce is providing $5 million in seed money to the fund, with additional contributions coming from individuals and foundations. The total target is $25 million.
The idea behind the fund is to invest in early-stage technology and life science companies emerging from University of Washington and other research centers in the state.
“We believe that the W Fund will fuel critical mass in key sectors such as life science, and strategic nascent sectors for Washington such as clean tech, capitalizing on the most promising new inventions developed at the University of Washington and research institutions across the state,” said Linden Rhoads, Vice Provost, Commercialization, University of Washington, in a statement. “This is a great example of the state, and Department of Commerce being really sophisticated in their use of federal stimulus money to leverage private investment dollars to insure [sic] that there is sufficient earliest stage capital in the local economy.”
Xconomy notes that the fund was initially called the Husky Bridge Investment Fund, and as of last October had raised $13 million of a $20 million target.
We’ve reached out to Rhoads to get additional details on the fund, including how much they’ve raised to date.
The W Fund is part of a larger $19.7 million effort that was announced today by Gov. Gregoire and the Washington State Department of Commerce to create new financing paths for small companies.
“About 95 percent of Washington businesses are small businesses and they need help right now to grow and provide the jobs that will accelerate economic recovery in every community around the state,” said Gregoire in a statement. “With the Small Business Credit Initiative, we are removing a big barrier to their success by opening more pathways to financing that’s been scarce during this recession.”
In addition to the W Fund, Gregoire announced the formation of the Craft3 Small Business Credit Initiative which is designed to provide loans of $1 to $5 million to minorities and other underserved communities. It also announced the formation of the Capital Access Program, a $6 million program that will help facilitate bank loans in the $50,000 to $100,000 range for small businesses.
Groups in Oregon have been experimenting in public-private partnerships when it comes to investing in new startup companies, and Rep. Jay Inslee suggested that state funds be used to support startups in remarks declaring his bid for governor.
Efforts to create government-led startup investment vehicles have been somewhat mixed in the past, including lack of focus at the state’s own Life Sciences Discovery Fund