To increase new company creation and commercialization of its leading-edge research, the University System of Maryland (USM) is launching a $25 million early-stage investment fund to be known as the Maryland Momentum Fund.
The money-raising process for start-up companies typically is an uneven one. Therefore, the Maryland Momentum Fund will concentrate on filling gaps in the funding pipeline to push USM’s most innovative ideas into the marketplace.
With a $10 million commitment from the USM already in place, the system is collaborating with UM Ventures and the University of Maryland, Baltimore County (UMBC) to reach out to area venture capitalists and angel investors for an additional $15 million. UM Ventures is a joint initiative of the University of Maryland, Baltimore (UMB) and University of Maryland, College Park (UMCP) to commercialize technologies and expand industry collaboration.
As it approaches the $25 million level, the Maryland Momentum Fund will leverage this financial support to achieve several objectives:
● Accelerate the success and profitability of USM start-ups;
● Attract promising entrepreneurs and innovators to USM institutions;
● Seize the opportunity to commercialize valuable USM intellectual property;
● Develop long-term financial returns that can be reinvested in future startups affiliated with the USM.
“The launch of the Maryland Momentum Fund is a critical step in advancing the commercial viability of start-up companies formed through the innovative research at USM institutions,” said USM vice chancellor for economic development J. Thomas Sadowski. “This fund will help our entrepreneurs address funding gaps, access to other sources of investment capital and gain marketplace footing, further enhancing the system’s high impact on the Maryland economy.”
Eligible companies must be in Maryland. Eligible companies must also be based on USM-owned intellectual property; founded by USM faculty, students, or alumni; or in USM incubators, research parks, or RISE Zones.
“The USM is a public higher education system of 12 institutions, and opportunities for commercializing our research opportunities can originate from any USM institution or from alumni connected to those campuses,” Sadowski said. “The endeavor to build on USM’s success in new company creation brings more national prestige to the system.”
Individual investments will range from $50,000 to $500,000 per company. Select investments will require at least a one-to-one match by outside investors.
An external investment board, comprised of successful investors, will set policies, make investment recommendations, and refer potential opportunities. The external investment board will consist of six-to-eight leaders from the private sector, including venture capitalists.
The USM accelerated its efforts in technology commercialization during fiscal year (FY) 2014, when the USM Board of Regents approved the Policy on Investments and Loans to Maryland‐based Businesses that License University Intellectual Property (Policy No: VIII – 14.00). The policy helped establish investments and loans totaling $400,000 in five start-ups during FY 2015 from UM Ventures.