Foundation awarded $1M for ASU-accelerated companies
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 start-up 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.”
“Maricopa County is excited to join with ASU to help emerging businesses develop into sustainable companies and promote job growth in the county," said Denny Barney, chairman of the Maricopa Board of Supervisors who represents District 1. "This partnership demonstrates our commitment to investing in the long-term, sustainable growth of Maricopa County.”
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. 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.
“This fund is the next step in ASU’s evolution of the knowledge enterprise model," said R.F. “Rick” Shangraw Jr., CEO of the ASU Foundation. "We are able to advance entrepreneurship through our ASU accelerators – Furnace Technology Transfer, ASU Startup, Edson Student Entrepreneur Initiative – then support the results with venture capital that will allow them to expand and achieve.
“We’re grateful to MCIDA for recognizing the value of supporting Arizona-based entrepreneurship through ASU,” Shangraw added. “We look forward to using this grant to fund manufacturing companies that will contribute to the public good of our community and our state.”
The Entrepreneurship and Innovation Group at ASU helps innovators, inventors, ideators and entrepreneurs launch for-profit and more-than-profit ventures. The joint initiative between ASU’s Office of Knowledge Enterprise Development and AzTE serves as the hub for entrepreneurial activity at ASU, and is based at ASU SkySong in Scottsdale. Over three years, the unit has grown to encompass not just startup acceleration, but a range of entrepreneurship-related activities across the university, the metro area and the state. This fiscal year, EIG will support more than 70 startups.
“More than half the startups we have worked with over the last two and a half years have been manufacturing-related, and this new fund will support their growth and development as job and wealth creators,” said Gordon McConnell, associate vice president of entrepreneurship and innovation in the Office of Knowledge Enterprise Development and a general partner of the new fund.
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.
“A healthy venture capital industry is a key part of a robust startup ecosystem,” said Charles Lewis, AzTE vice president for venture development, and a general partner of the new fund. “This generous gift from MCIDA will help ASU to start and grow this fund for the benefit of entrepreneurs.”
Media contact:
Amelia Huggins
Office of Knowledge Enterprise Development
amelia.huggins@asu.edu