The University of Connecticut, Webster Bank and Connecticut Innovations (CI) created a $1.5M UConn Innovation Fund of $750K per year over a two-year period to invest in promising startup companies that are affiliated with UConn.
The Fund made selective investments in high-potential, early-stage companies pursuing commercialization, with the goal of helping them secure SBIR/STTR funding, angel investment, or other later-stage financing. Funded companies are expected to operate in Connecticut (CT).
Current Status:
All funds have been invested in startups that meet the Fund’s criteria. Since no additional capital is expected, the Fund is now in the process of transitioning to a new management structure.
Investments
The Fund investment vehicle was a Convertible Note. The Fund invested up to $100K per company paid in two tranches. One half of the investment was made available up front to fund pre-approved milestones. After the milestones were successfully completed, the remaining investment was released to fund additional milestones. The Investment Committee had the discretion of making investments greater than $100K on a select basis.
Use of Funds:
The primary use of funds was to develop or advance the proof-of-concept, market research and analysis, and/or early-stage product development. The funds were used for project-based activities and did not include compensation for company shareholders.
Eligibility Requirements
Startups must have an affiliation with UConn including students, faculty, alumni, or participation in the Technology Incubation Program (TIP). They also must operate in CT.
Selection Criteria:
- Quality and appropriateness of team and resources to execute
- High potential for commercialization
- Likelihood of technical success of proposed approach
- Degree of innovation, IP strategy, access to required IP, and/or competitive strategy; addresses a technological challenge
- Potential for a compelling product to emerge from the proposal, including passing through clearances and value analysis
- Likelihood of achieving external funding (CBIF $500K investment, SBIR grant, angel investment, etc.) at the completion of this work
- Preference will be given to companies that are research-based emanating from UConn student(s) or faculty. Additional priority will be given to startups that have participated in UConn’s entrepreneurial programs and competitions and recognized for their potential through financial and other awards.
Award Selection and Administration
The program was managed by the UConn Evaluation Board, Fund Managers and Investment Committee.
Review Process:
The Evaluation Board was led by UConn and included representatives from UConn and external industry partners. It evaluated the applications and identified those meeting the selection criteria, having business and technology viability, and worthy of investment consideration.
The Fund Managers reviewed and confirmed information in the applications that were selected by the Review Committee and prepared them for presentation to the Investment Committee.
The Investment Committee, comprised of a member from each of the Fund partners (UConn, Webster Bank, and CI), made the investment decisions.