Stanford to directly invest in its startups

Stanford University has announced plans to directly invest in its student and alumni startups with an uncapped investment fund.

Stanford has limited its scope to companies who have passed through StartX, Stanford’s non-profit no-equity accelerator designed by and for the exclusive use of Stanford students. In addition to the investment announcement, the university also announced a grant of $3.6m for the accelerator, spread as $1.2m annually over three years.

Stanford has also said that it will not take a leading role in funding rounds.

In a response to a TechCrunch news article critical of the move, StartX founder Cameron Teitelman said: “We’ve had an extremely positive response from our companies and the VC community about the Stanford-StartX Fund. StartX companies are eager to take the money as it’s coming on friendly terms, and fast (so they can focus on product, not fundraising). They know that the returns will benefit Stanford, Stanford Hospital & Clinics, and StartX, and that’s also appealing to them. At StartX we have an incredibly extensive network of mentors, VCs, and experts that all of our alum companies can access.  We are partnered with Stanford and we have very detailed information and access to most of the valley and beyond.  This has proven to be a huge asset to our founders.”