A group of alumni from UC San Diego has created an early stage venture capital fund that will target startup companies created by university students, faculty and graduates.
The modest, roughly $8 million Triton Technology Fund unveiled late Wednesday expects to provide capital to entrepreneurs looking to commercialize technology developed at the university.
“Our hope is this will help pump up the deal flow and the number of people trying out entrepreneurism so we can benefit the region by helping it to have more entrepreneurs and more startups,” said Albert Pisano, dean of the UC San Diego Jacobs School of Engineering.
Triton Technology Fund is part of the larger $40 million technology venture fund, Vertical Venture Partners. Both are run by UC San Diego alumnus David Schwab, a longtime partner with Sierra Ventures.
Vertical Venture Partners has received $1 million from the UC San Diego Foundation. Schwab is in the process of raising additional capital from limited partners but he said the fund is open for business and looking at potential investments.
Other universities, including UC San Francisco, have venture capital funds to support businesses that spin out of the schools. What’s unusual about the Triton Technology Fund is it is professionally managed and owned by a venture capitalist outside of the university, said Sujit Dey, faculty director of the school’s von Liebig Entrepreneurism Center.
Investment committee advisers to Schwab include UCSD alumni Steve Hart, co-founder and chief technology officer of ViaSat, and Paul Conley, managing partner of Paladin Capital.
Through a service agreement, the von Liebig Center will help find and mentor university students, faculty and alumni interested in seeking funding from the Triton Technology Fund.
UC San Diego is the top-ranked campus in the University of California system for U.S. patents on its technology, Dey said. But many university-developed technologies need refinement before they’re ready to come to market.
These days, however, venture capitalists are investing mostly in companies that already have customers and revenue. The Triton Technology Fund will bridge the gap for early stage companies linked to the university. It will focus on software, communications, electronics, materials, medical devices and instruments. All UC San Diego-owned intellectual property transactions will go through the campus Technology Transfer Office, which is standard practice.
“We see a lot of innovative ideas,” Dey said. “We already have a strong platform for grooming university entrepreneurs. What the fund will do is let those efforts go to the next step.”
Schwab, who has been a long-time member of the advisory committee for the Jacobs School of Engineering, said the structure of the fund could serve as a model for other universities to commercialize technology.
“UC San Diego ranks fifth among the top U.S. universities in federal research and development dollars, with over $1 billion in expenditures in fiscal year 2012,” he said. “I am excited about the prospect of working to match UC San Diego-related technologies with specific needs in targeted vertical markets.”
