initiatives. Later that year the University of Michigan, which had the second-highest R&D expenditures in 2016, said it planned to create a $10 million seed fund to invest in student-led startups.
Two years ago, there was talk of creating a $2 million seed fund to support the commercialization efforts of UW-Madison students, faculty, and staff, Richards said. The state’s job-creation agency, the Wisconsin Economic Development Corp. (WEDC), was involved in the discussions, along with the UW Foundation, according to a WEDC spokesperson. Under the proposed plan, the foundation would’ve managed the fund and worked with D2P to make investment decisions. [Updated to clarify D2P’s role in a proposal to create a seed fund supporting UW-Madison entrepreneurs.]
The proposed seed fund did not come to fruition. During negotiations, WEDC committed to providing $1 million, but that was contingent upon a group affiliated with UW-Madison matching the amount, Richards said. According to WEDC, “the [UW] Foundation withdrew from consideration and a contract was not executed.”
Richards said continuing to provide funding to help people on campus advance their discoveries and ideas toward commercialization, as D2P did through its Igniter fund, is a worthy goal. But he pointed out that WEDC is focused on supporting commercial entities, and the majority of the projects D2P has funded have not yet turned into businesses. WEDC also would’ve required that the UW Foundation and D2P invest any money contributed by WEDC in startups within 18 months of the initial award date, Richards said, and that companies receiving capital regularly provide the agency with hiring, salary, and follow-on investment data.
“At the time, we weren’t sure we were going to be able to meet all the requirements,” he said. “We would have [had] to make sure that we have enough deal flow.”
And in terms of WEDC’s reporting requirements, Richards said: “We don’t have data on that, even the companies that we have right now that we’ve been working with [through D2P]. We would need to have structures in place in order to collect and report those figures.”
