Universities play an important role in advancing the technology ecosystem, semantic technology included. Look for starters at work done at The Tetherless World Constellation at Rensselaer Polytechnic Institute, Wright State University’s Kno.e.sis Ohio Center of Excellence in Knowledge-enabled Computing, MIT, and the Digital Enterprise Research Institute located at the National University of Ireland, Galway.
In addition to driving technology ever forward, institutions like these and others also provide a home for incubating good ideas that could become good businesses. Music discovery service Seevl and the enterprise-focused SindiceTech are two examples of semantic spin-outs from DERI, for instance, while MIT Media Lab gave birth to commercial properties with semantic underpinnings including music intelligence platform The Echo Nest. The Kno.e.sis Center points work it’s doing in the commercial direction, too: Its LinkedIn profile description notes that its “work is predominantly multidisciplinary, and multi-institutional, often involving industry collaborations and significant systems developing, with an eye towards real-world impact, technology licensing, and commercialization.”
Given the projects with commercial prospects underway within their own houses, it would seem there’s opportunity for universities themselves to look for even more ways to contribute to that success. And that’s just what the University of Minnesota is doing: This week it said that it’s launching a $20 million seed fund over a ten-year timeframe to support the innovative ideas to which its campus plays host.
Its office for technology commercialization reportedly will make seed investments of between $100,000 and $250,000 in startups licensing its technology. That includes investing in university startups in industries such as information technology. The school reports that 2012 was, in fact, a record year for its startups, with a dozen companies launching in fiscal 2012.
It’s not the first university to take the VC approach. Case Western Reserve University, for instance, has a multi-million dollar fund focused on creating new businesses based on technologies developed at CWRU and its affiliate institutions. NYU is another one, with its Innovation Venture Fund seed-stage venture capital fund that invests in startups built upon NYU technologies and intellectual property.
While less than $1 million has been returned to CWRU since the fund began in 2003, of the eight for-profit vehicles in which the fund has invested, seven got follow-on institutional capita, according to a 2011 article about CWRU’s VC fund.
While there do not appear to be any semantic ventures supported by the CWRU fund, the NYU fund counts among its portfolio companies semantic startup Tagasauris (see our article about the company’s mission to tag the visual web here). Its co-founder and chief scientist Panos Ipeirotis is an associate professor at the Department of Information, Operations, and Management Sciences at Leonard N. Stern School of Business of New York University.
Such funding by universities is interesting but there are other aspects schools should pay attention to, as well, when it comes to in-house innovations. “The most important support a university can give is an incubator–that is subsidized but paid space plus access to computing/lab resource before the company gets first round of investment or grows beyond, say, 5 to 10 employees,” says Kno.e.sis director and LexisNexis Ohio Eminent Scholar Dr. Amit P. Sheth. That said, he notes that “some technologies need additional validation beyond their lab origins before angel or VC funding can be found. For very targeted, short term purposes, such seed funds can be quite valuable, especially in parts of the country where angel investors and VCs are not in abundance.”
There are some other avenues of support opening up for ventures born in academia. This summer, The Michigan eLab was founded by entrepreneurs and investors with ties to the University of Michigan. It’s focused on making early stage investments in information-technology companies, reportedly including start-ups launched by students at the University of Michigan and companies created by faculty entrepreneurs.
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