200. University-Affiliated Funds & Angel Networks (Jason Whitney)

200. University-Affiliated Funds & Angel Networks (Jason Whitney)
Nick Moran Angel List

Jason Whitney of IU Ventures joins Nick to discuss University-Affiliated Funds & Angel Networks. In this episode, we cover:

  • Backstory/path to venture
  • At IU you have 3 core initiatives – The Quarry, IU Venture Fund and the IU Angel Network. What’s the focus of each?
  • Talk about the investment focus for the IU Philanthropic Fund. What’re the criteria to be eligible for funding?
  • How does IU Ventures support the University’s mission? How does it affect or benefit current students?  
  • As a broader goal, I know the organization ultimately hopes to entice investors and entrepreneurs from around the country to return to Indiana as a result of participating in the network. Are you measuring this and are your efforts working thus far?
  • So, a criticism of both university venture funds and angel groups is speed — traditional angel groups and academia move slowly with investment decisions.  How do you combat that issue for founders raising on a tight timeline, trying to close a round?
  • I was speaking with a university-affiliated investor just last week and he was saying, there’s just not enough deal flow when you restrict investments to companies that have a specific university affiliation… do you agree/disagree?
  • I’ve heard from a number of the Alumni Ventures Groups in recent years  — there are folks leading funds and angel groups with alumni from a particular university… are you a part of this effort and what’s your impression of the Alumni Ventures Groups?
  • Let’s talk more about the IU Angel Network. How do you go about becoming a member? What do you gain access to as a member?
  • Aside from the university affiliation, which is appealing to many, what advantages and points of differentiation does IU Angels have vs. other angel groups?
  • For the founders out there… why should they fight to get IU Ventures and/or IU Angels on their cap table — how specifically are you driving success beyond that of other investors?
  • Advice for investors?

Guest Links:

Key Takeaways:

  1. The philanthropy to the university is at the heart of what they do, which is how the IU Philanthropic Fund got its name.
  2. The fund started with $15M in March of 2018 and has given IU Ventures an opportunity to engage with companies that are either founded by their faculty, by alumni, by entrepreneurs that have been through The Quarry program or are based on IU intellectual property. 
  3. With their program The Quarry, their core focus is on creating sustainable companies and making sure the right ones get formed instead of everyone getting formed. 
  4. In addition to the business modeling process they provide through The Quarry, it’s also given startups greater exposure to statewide opportunities that they weren’t previously aware of such as, mentorship programs, accelerators, incubators, pitch competitions, and commercialization partners.
  5. In order to be eligible for funding through the Philanthropic Fund, you must be an IU student, a faculty member and entrepreneur commercializing intellectual property or a company that is either founded by an IU alumni or has an alumni in the C suite. 
  6. They primarily focus on early-stage investing and prefer to stay vertical agnostic. This gives them an opportunity to help accelerate a startups path to their next benchmark. Also, by remaining open to various verticals it helps their deal flow. 
  7. The University is entering it’s bicentennial year in 2020 and their strategic plan is to create a prosperous and innovative Indiana by translating their new research and discoveries into products, services and companies. 
  8. Being able to present deals remotely through the IU Angel Network is going to be a big differentiator for them.
  9. The angel network plans on offering monthly presentations of 8-10 deals per year that their team has personally vetted out. These deals will be presented virtually with the ability for members to go back and watch them later.  
  10. Jason shares that it is difficult to move fast at all times with regards to investment decisions, however being that they sit outside the university, they can make quicker decisions, which ultimately helps to mitigate any backlog.
  11. The burden of sticking to a tight timeline often unfairly gets put back on to the investor. It’s important to set realistic timelines as an entrepreneur, that way additional due diligence can be done on the firm you’re “getting married” to as well. 
  12. The IU Angel Network is open to accredited investors who have a genuine interest in supporting companies and that are able to provide additional value to their team, students and their startups.
  13. With regards to the startups they invest in and founders that join the IU Angel Network, the IU team is diligent about getting to know them and their needs on a personal level. This enables them to use their network of not only personal and business contacts but also alumni and university resources to help combat any obstacles.