Rochester Institute of Technology has started a $3.5 million venture fund intended to help develop local businesses in what officials see as a major component of the university's business incubation efforts.
The RIT Venture Fund will be available to students and alumni of the university as well as local startups, said James Watters, senior vice president for finance and administration at RIT. The fund is up and running, seeking its first round of applicants for grants, he added.
"Some years ago, RIT opened a 30,000-square-foot business incubator, and we've been working hard to nurture those companies," he said. "Also, on campus we're helping students who are interested in developing business concepts and ideas, and this venture fund is following on that continuum.
"We see seed funding as the final pillar of the work we're doing."
The RIT Venture Fund will be operated by Donald Golini, who will evaluate businesses and help recommend to trustees which should receive funding. Golini said he expects RIT to fund two businesses a year for the first three to five years of the fund.
"There's a lot of interest in startups, and from my point of view this is a great addition that is a huge help in the environment businesses are facing today," said Golini, founder and former head of QED Technologies International Inc.
The fund makes sense for the region, he said, because most businesses have some connection to RIT, whether through technology developed there, work in the incubator or partnerships involving student co-ops.
Though students may be the focus, the Venture Fund will be inclusive, Watters said. Students can apply, as well as faculty or staff at RIT and companies in the incubator.
RIT's Venture Creation incubator opened in 2001 as a location for seed-stage companies to develop concepts as they work toward becoming profitable, viable businesses, RIT officials noted.
Companies within the incubator are given the opportunity to work with on-site staff who provide assistance with business plans and grant applications. They also can connect to RIT's faculty and resources, as well as student co-ops and interns.
The student incubator at RIT, the Simone Center for Student Innovation, has itself earned praise. It was named the best in the nation by BestCollegesOnline.com this summer, beating out programs at Syracuse University and Harvard University. The center, which opened in 2007, houses several entrepreneurship programs that let students test business ideas and create commercialization plans.
The venture comes as RIT has made efforts to boost its business support. This week the university announced plans to open a Center for Urban Entrepreneurship in the former Rochester Savings Bank downtown. The 47,000-square-foot building will be converted to a multiuse venue for RIT activities related to economic development and business creation. (For more information on the project, see the Q4 feature on page 2.)
RIT has had experience in venture funding, Watters noted. When the university was awarded a $150 million contract from the U.S. Marine Corps to equip 10,000 military vehicles with systems that monitor their performance, Liban Inc. was created in January 2008.
Through its intellectual property management office, RIT transferred technology to Liban to commercialize it, and from there the company took shape and expanded into other areas.
From that process the university learned valuable lessons about finding venture funding and what it takes to grow a startup, Watters noted. RIT now plans to use that knowledge with its own venture fund.
"This is just one more complementary service from the university to promote business growth,' Watters said. "We understand the need for universities to play a part in economic development, and as we put money into these businesses, our goal is to bring more economic vitality back to Rochester."
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