The U.Va. Patent Foundation recently created a new "angel investment" fund, The Jefferson Corner Group, that will evaluate investment opportunities and take an active role in managing the investments.
An "angel investor" is typically a reasonably wealthy person who wishes to become directly involved and invest in companies as they are still in their early years, said Executive Director Robert MacWright, chief executive of the U.Va. Patent Foundation. The group of investors benefit by sharing in the risk and reward that comes with the investments, he added.
"If you go out and invest in one company, everything depends on that one company," MacWright said. "If you invest along with other investors, you can pool your money and invest in other companies. It balances out the risk."
Other than minimizing risk in investing, angel funds have other benefits.
"Angel funds are very important because they provide founders capital," Commerce Prof. Laurence Pettit said. "When you're starting up without a track record, it's difficult to find institutional money. Angel money is dedicated to new entrepreneurial inventors."
Since 1980, when federal law began allowing universities to own their own inventions born out of research funds, the field of university technology commercialization has experienced significant growth, MacWright said. While existing companies are capable of commercializing new technologies, they are often not the most qualified to do so.
"Often the best way to commercialize those inventions is to start a new company that is dedicated to developing new products and services that can be enjoyed by the public," MacWright said. "And very often the people who have the most skill with that technology are the faculty inventors themselves."
Finding the funds, however, posesone of the greatest challenges in starting a new company, according to MacWright. It is not uncommon for University inventors to start their own companies to develop their inventions.
In 2000, Spinner Technologies Inc. was founded to provide these startup companies with "advice and hands-on assistance," MacWright said. The board of directors of Spinner Technologies Inc. and the U.Va. Patent Foundation decided there was a need for funding for young companies, said MacWright, who is also president of Spinner.
The Jefferson Corner Group was then formed in order to assess which companies were worthy of investment.
"We think it's important there be some early stage funding," MacWright said. "The funds will be part of helping these young companies and the Jefferson Corner Group will contribute significantly to the building of young technology."
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