to pursue their goals. Iverson said the organization’s board of trustees recently approved a proposal to create two new venture capital funds that will invest in “UW-Madison associated spinouts.”
WARF plans to draw on its own funds when making investments out of the new VC funds, Jeanan Yasiri Moe, WARF’s director of strategic communications, said in an e-mail.
The first is a $10 million fund that will provide seed-stage capital to startups, with investments likely falling in the range of $25,000 to $150,000 each. Iverson said WARF plans to make 10 to 15 such investments each year over the next four to eight years. When possible, WARF would like to partner with outside angel investors on deals, he added. (He said he also wants to engage banks in Wisconsin, most of which he said could do more to support entrepreneurs.)
The second fund is a $50 million pool of capital that will allow WARF to participate in startups’ subsequent rounds of financing, Iverson said.
“If we can fund 15 companies in the seed round, [maybe] three or four of those the next year make it to a [Series] A round,” he said. “We want to be able to participate in that A round, and on we go.”
In an e-mail to Xconomy, Iverson said that WARF does not intend to restrict investments from the $50 million fund to startups in which the organization previously made seed-stage investments.
“There is not a linear model to this,” he said. “No preconditions. It could work as a pipeline, but exactly how this will work is yet to be determined.”
During his presentation, Iverson said WARF is working to hire a chief venture officer, who will work with a small team to make investments out of the new funds.
Companies do not have to be based in Wisconsin in order to receive a seed- or later-stage investment from one of the funds, Iverson said.
“If it’s a technology coming out of the University of Wisconsin-Madison and somebody wants to take that technology and make a go of it” while working for a company based in another state, or outside the U.S., WARF would consider funding the company, he said.
And even though WARF says the funds are aimed at supporting “spinouts” affiliated with UW-Madison, Iverson and others at WARF are still hashing out specific requirements. Limiting investments to companies that have already begun working with the organization on intellectual property-related matters could end up being an overreach, Iverson said.
“There’s a lot of computer science technologies and startups that don’t have patents,” he said. “Does that mean I’m not interested in supporting those kinds of technologies out of the computer science department at this university? [No], I’m sure as heck interested in supporting it.”
WARF’s new VC funds mark the organization’s latest attempt to support early-stage businesses. Over the past 10 years, it has invested about $30 million directly into startups, Yasiri Moe said. WARF has also served as a limited partner in other venture capital funds, such as Madison-based 4490 Ventures. And since 2015, WARF has provided financial support to the Wisconsin-based startup accelerator Gener8tor for its gBETA program, which works with seed-stage companies.
“I promise you that WARF will do its part to put capital to work in this community with entrepreneurs,” Iverson said.
Meanwhile, Iverson said he also recently got the go-ahead from WARF’s board of trustees to create a $50 million “Human Therapeutics Program.” The goal of the
