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Washington’s startup community is getting yet another shot in the arm, thanks to the efforts of a newly-formed venture capital firm whose goal is to mine universities and research institutions for the state’s very best business ideas.

The University of Washington’s W Fund is launching today with about $20 million from private industry, leading venture capital firms and federal stimulus funds. The goal is to bankroll ideas coming out of universities, hopefully sparking the next wave of innovative companies in the region.

UW President Michael Young called the W Fund — which plans to invest an average of $500,000 in 20 or more startups over the next four years — a trailblazing model.  “This creative new fund set up by this group of innovative private investors will serve as a catalyst to help the university fulfill its broader missions and create even greater opportunities for the State of Washington,” Young said in a statement.

The structure of the organization is unique. A five-member board — consisting of Madrona Venture Group’s Troy Cichos; Concur CEO Steve Singh; Bainbridge Graduate Institute’s John Gardner; angel investor Rudy Gadre and the University of Washington’s Linden Rhoads and Paul Jenny — will manage the fund.

Steve Singh

The business plan screening process includes both experienced entrepreneurs and venture capitalists — such as Pathway Medical chairman Tom Clement; WRF Capital’s Ron Howell; and OVP Venture Partners’ Chad Waite — as well as a group of 25 students “Student Venture Associates.”

Between them, they will seek the very best ideas emerging from the region’s research organizations in the fields of computer science, medical devices, biotechnology, clean tech and more.

The fund has yet to bankroll a startup, but investment committee member Greg Gottesman said he’s been very impressed so far with the quality of the business ideas he’s seen at committee meetings.

“I am excited about it,” said Gottesman, a partner at Seattle’s Madrona Venture Group. “The quality of the intellectual property and entrepreneurs is very high.”

Concur’s Singh — whose company was in the news today for announcing a headquarters move from Redmond to Bellevue in order to accommodate its rapid growth — added that it is imperative that business leaders support the region’s entrepreneurial community.

Linden Rhoads

“By helping spin out additional companies and supporting student programs, the W Fund will advance the University of Washington’s core educational mission while further distinguishing the UW as a leader in developing future entrepreneurs,” he said.

Past efforts to combine the worlds of venture capital with state institutions have produced lackluster results, most notably in the form of the state’s Life Sciences Discovery Fund.

Only time will tell if the W Fund has struck the right balance.

But this much is certain.

The University of Washington, under the guidance of newly-appointed president Michael Young, is serious about sparking more entrepreneurial endeavors. Earlier this year, Young helped kick off the New Ventures Facility, a startup incubator located in Fluke Hall.

The W Fund is yet another puzzle piece in the larger entrepreneurial mission.

“Access to earliest-stage capital is a gate to compelling opportunities,” said Rhoads. “The W Fund should help the most-promising research and student generated start-ups clear that hurdle, and gain traction more quickly.”

Previously on GeekWireUW president pledges to double startup production as new campus incubator hatches

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