UC Announces $250 Million Fund to Invest in Innovative Research and Startups
The University of California announced on Dec. 15 that entrepreneur Vivek Ranadivé, will lead a $250 million fund to support innovative research and startups by UC students and faculty.
Student and faculty entrepreneurs normally have to find capital for their ventures from traditional sources of financing, but this fund will allow the university to support the entrepreneurs’ ideas and research directly.
Vivek Ranadivé is a multi-millionaire Silicon Valley software entrepreneur who founded TIBCO Software, a leading integration and analytics company and Teknekron Software Solutions, a communications technology firm. He also owns the NBA team Sacramento Kings.
UC Chief Investment Officer Jagdeep Singh Bachher and UC President Janet Napolitano believe that given his experience, Ranadivé is well-equipped to lead this fund and to attract investors. The investors, in turn, will provide UC researchers the funds they need to make discoveries and inventions across several disciplines, including life sciences, technology, energy and agriculture.
The fund will support students, faculty and researchers at the 10 UC campuses, five medical centers and three national laboratories. Profits from the fund’s investments may also provide revenue for UC’s pension system which has been struggling with funding, and other UC related concerns.
The idea of a venture capital fund to support innovative research was first approved by UC Regents under the title “UC Ventures” in September 2014. However, the fund will soon be renamed.
UC’s $250 million commitment to the fund will not be from tuition or state funds, and will be managed by Bachher. Ranadivé will build a team to attract outside investors and will match 5% of the outside funds collected with his own money.
The fund is fitting for UC as UC has granted more patents than any other university, with an average of five new inventions per day. Since 1980, more than 800 startup companies have been founded with UC patents.
According to the most recent UC Technology Commercialization Report, recent inventions and startups include a company selling brain training apps on smart devices, robots that improve STEM education in California schools and a sensor and monitoring system to help farmers minimize water use during drought.
“Our mission is to help grow companies that will advance society and make the world a better place,” said Ranadivé about the fund.
According to Michael Cohen, a securities attorney at the law firm of Brown Rudnick who represents startup companies and also advises venture capital funds in venture financing transactions, the UC Fund represents a change in the university’s strategy of investing in startups, which will bring new opportunities.
“By constituting its own fund, the UC system is taking an active role in supporting the commercialization of technology developed at UC,” said Cohen. “Attracting investment for growth is critical to the success of every emerging company, and this fund demonstrates UC’s commitment to its student and faculty researchers.”