Bryan Chambers describes the entrepreneurial climate at the University of Texas at Dallas as being in midst of the “perfect storm.”
In recent years, the university has seen growth in its resources and programs for budding business mavens.
The Princeton Review named UTD No. 22 on its 2017 list of Top 25 graduate schools for entrepreneurship studies. Last summer, UTD announced a formal incubator program in its Venture Development Center. It also set up a local post of a worldwide entrepreneurship program, Blackstone LaunchPad, with the help of a $1 million grant from the Blackstone Charitable Foundation.
But, Chambers, director of UTD’s Blackstone program, said there has been one key ingredient missing — an investment fund.
“We don’t want to outsource innovation. We want to support it and we want it to stay here in DFW.”
The university’s annual Business Idea Competition doles out more than $20,000 to winning teams, but there hasn’t been a dedicated capital source on campus for startups progressed beyond an idea and needing to scale, he said.
Now, that remaining piece has come to fruition with the UT Dallas Seed Fund, which will be operated within the university’s Institute for Innovation and Entrepreneurship.
“We don’t want to outsource the great entrepreneurs. We don’t want to outsource innovation. We want to support it and we want it to stay here in DFW,” Chambers said.
UTD won’t be the first university to establish a seed fund. Other institutions such as New York University have a similar capital source for early-stage businesses.
Chambers will serve as the director of the UTD fund in addition to his management duties over its Blackstone LaunchPad program.
Money for investments has been secured through donors including North Texas entrepreneurs and venture capitalists, as well as matching funds from the university. Chambers describes it as more of an “evergreen fund” versus a venture capital fund since 100 percent of return on equity will be put back in for future investments.
“There is no end date to it. It’s a perpetual cycle,” he said.
Businesses eligible to apply are those originated by UTD students, alumni, faculty, staff, or others associated with the university. The startups mostly have some sort of technology application.
“The vision of this fund is to really support the North Texas ecosystem and become a meaningful vehicle for economic development for our region.”
Chambers will be working closely with the university’s Venture Development Center, and the Financial Leadership Association will provide student interns who are planning future careers in venture capitalism or investment banking to help in the deal-making process.
“We are exposing them to what it is like to really deploy capital. [And learning,] how do you underwrite a deal from a financial standpoint?” Chambers said.
There haven’t been any investments yet, but Chambers expects to make one or two deals by the end of the spring semester.
He declined to disclose the total of the fund, but said there is a “meaningful amount of funds to make several investments to the tune of $50,000 or $100,000.”
“The vision of this fund is to really support the North Texas ecosystem and become a meaningful vehicle for economic development for our region,” Chambers said.
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