The US university has partnered with a Silicon Valley-based VC firm to manage the investment fund.
US early-stage venture capital firm MFV Partners has launched a $25m fund that will back ventures emerging from the University of Chicago ecosystem.
The new fund, called Harper Court Ventures Fund I, will invest in pre-seed and seed-stage companies based on faculty- and student-led research, as well as in companies founded by alumni of the university.
The Silicon-Valley based fund, independently managed by MFV Partners, will invest in deep tech sectors such as quantum computing, life sciences, energy and artificial intelligence. The fund plans to back 40 startups over the next three years.
This is the first externally run venture fund for the University of Chicago. The university has some internal funds that that finance basic research to fill the gap between government-funded research and what the venture capital sector will finance. Samir Mayekar, head of the Polsky Center for Entrepreneurship and Innovation, the University of Chicago’s commercialisation arm, says that partnering with an external venture capital firm helps the university have a Silicon Valley mindset to deals.
“It is a hard job to be able to lead a round in a science-based company, to do the due diligence. University employees are just not going to be prone to doing that well, because we are not structured like a venture capital fund. We are a nonprofit at the end of the day,” says Mayekar.
More US universities may look to set up or partner on funds to finance their spinouts as a result of federal funding cuts to science and research. Mayekar says the idea for the fund preceded the US administration’s recent funding cuts but that the availability of private market capital is especially needed. “The changing funding environment around us right now only creates more need for earlier stage capital. We are glad to be launching a fund at this time when that need exists,” says Mayekar.
He adds founders in the Midwest of US, where the University of Chicago is located, often don’t have the ready availability of VC capital that founders on the East and West coasts of the US enjoy. “The average founder in the Midwest takes an extra two years to raise their first half million of capital versus founders of the coasts of the US,” he says.
Investors in the fund include the University of Chicago endowment and several members of the university’s board of trustees.
The fund has already made three investments in spinouts from the university. These are Flow Medical, a developer of of next-generation catheter-based therapy to treat acute pulmonary embolism; SimCare AI, a platform for clinical skills training using AI-generated patient conversations; and Beacon, a technology that removes viruses, bacteria and moulds from air and surfaces.
