the leaders of university gap fund/accelerator programs

an interview with Community of Action member:

An Interview with the UVA Licensing and Ventures Group Seed Fund

How would you describe the need for gap funding/accelerator programs to someone outside of the university tech commercialization/innovation community?  

Many of the technologies or companies developed within a university and targeted for commercialization are very early in their stage of development. As a result, venture capitalists, angel groups, or even some corporate programs avoid investing in these technologies or companies because it is too early to determine if they are worthy of investment. These traditional funding sources invest in technologies or companies with more traction in customer adoption, product development, revenue, and team composition. For this reason, gap funds associated with a university or accelerator have become a significant source of funding for technologies or companies at this early stage. These funds have taken on the position of the very early, high risk investing in which venture, angel, and corporate groups are no longer willing to invest. The funds provide the needed capital to conduct studies, develop prototypes, deliver early beta versions, or even develop a minimum viable product. The university fund plays the role of catalyst as this initial funding allows the company to achieve significant development or commercial milestones that put the company in a position to raise funds from those more traditional sources.   

Briefly describe the gap funding or accelerator program(s) that you have put in place to address this need?  

The University of Virginia (UVA) Licensing & Ventures Group established the LVG Seed Fund with support from the University and the UVA Health System. Companies founded to commercialize UVA intellectual property, or are founded by current UVA faculty, staff, students, clinicians, and researchers are all eligible for funding. In certain cases, alumni-founded companies are also considered. Funding from the LVG Seed Fund is typically the first money into the company and encourages venture capital, angel network, and corporate funding program syndicate partners. As an evergreen fund, any investment gains are recycled into additional opportunities for UVA technologies and new ventures. An Investment Committee of five UVA alumni who are active venture capitalists oversee our activity. In three and one-half years of operation, we have made nine initial and five follow-on investments with one exit.  

What are the major challenges that you have experienced thus far and how have you addressed these in your program(s)?  

Our major challenge has been finding management to staff our companies and assist us in moving technologies from the lab to the market. We access the networks of the LVG and UVA Alumni and also have five Entrepreneurs In Residence (EIR) who are providing guidance and leadership for our companies and technologies. These EIRs are former CEOs of companies that have raised funds (more than $500M) and sold their companies for a solid return for their investors ($1B).   

What are you most proud of [in relation to your program(s)]? What is meaningful impact to you?  

We are proud of many things accomplished at the LVG Seed Fund; notably our first exit. In August 2018, Dexcom, Inc. acquired TypeZero Technologies, Inc. The fund received a strong financial return, but more importantly, TypeZero's product, the inControl Diabetes Management Platform (now known as the Control-IQTM), offers people with diabetes accurate insulin delivery information for controlling their treatment regimens. This improved insulin delivery has had a significant positive impact on their daily lives. Also, the progress of all our portfolio companies, the co-investors we have attracted to our deals (20/1 leverage), the process implemented in our diligence, and the collaboration with our Investment Committee are points of pride. These all bring significant value to all our operations. While returns signify impact, the impact our companies make on their customers – how the products enrich and improve lives through the identification, development, and commercialization of novel technologies from the University of Virginia, is also gratifying. 

 

What is one piece of advice to your university peers that are either launching or developing gap funding and accelerator programs of their own?  

It is vital to operate any fund or program in line with processes and metrics followed by professional investors. Bringing a proven discipline and approach will signal a similarity in philosophy, method, and desire to be successful that matches their programs. Operating in this manner brings success in attracting co-investors to opportunities.  

 


The Need and Value: University Gap Fund and Accelerator Programs

The lack of true early-stage capital and innovation developmental support is a major challenge in advancing promising university technology from the lab to commercial and investment partners.  

Research institutions are leading through the implementation of university gap funding (proof of concept, startup, venture) and accelerator programs to bridge this "valley of death". Over the past 15 years, these programs have evolved into sophisticated investment, evaluation, development, and commercialization support mechanisms to nuture the most promising opportunities in emerging, high-growth technology areas. 

Resources


innovosource enables innovation and commercialization programs through knowledge-exchange and relationship-building between research institutions, industry, and over investors through focus on tactical offerings, like gap funding and accelerator programs. 

Over the past 15 years, we have supported more that 300 institutions that are developing are evolving their gap fund and accelerator programs. 

Visit our Gap Fund and Accelerator Program Resource Site


UniversityGapFunding.com is the resource for those interested in developing or partnering with university gap fund and accelerator programs. The site contains news, reports, events, and consulting service offerings. 

Visit the Resource Site


The University Gap Fund/Accelerator Summit | July 23-24, 2020 | New Orleans

UniversityGapFunding.com is the resource for those interested in developing or partnering with university gap fund and accelerator programs. The site contains news, reports, events, and consulting service offerings. 

Visit the Resource Site


Mind the Gap Report is a program development and benchmarking guide for current and aspiring gap fund and accelerator program leaders. The Report details 119 programs from 75 research institutions

Access the Mind the Gap Report


The Gap Fund and Accelerator Program (GAP) Community of Action is a community of practice + accelerator for university gap fund and accelerator programs. We share best practices, meet virtually/in-person to address common challenges, and build data, impact, and custom reporting tools to program development.

Join the Community of Action