A great idea and hard work are two essential elements in launching a successful business. Another is cash.
Rochester Institute of Technology is offering financial help through the new RIT Venture Fund. Companies with ties to the university are eligible to apply for funding. That includes students, faculty, staff, alumni and businesses operating in RIT's business incubator, Venture Creations.
"It's the right time for us to start a venture fund," says James Watters, RIT senior vice president, Finance and Administration, who adds that the idea has been under consideration for several years. The $3.5 million to start the fund comes from RIT reserves.
RIT already provides support to fledgling businesses through Venture Creations and RIT's Simone Center for Student Innovation and Entrepreneurship. Through the Venture Fund, RIT can now offer financial help. Watters anticipates that about $500,000 per year will be awarded to a few businesses.
As with other venture capital arrangements, RIT will receive equity in exchange for the financial support.
"By its nature, through venture funding, you're looking for an economic return," Watters says. "Our hope is that that the fund will become self-sustaining, so that we can continue to invest in companies. That's our motivation."
An advisory committee of RIT trustees and administrators has been formed to oversee the project. Businessman Don Golini will manage the fund. Golini founded QED Technologies in 1996, sold the company in 2006 and continued to serve as president until 2010. He became involved in the Rochester Angel Network, a group of 30 to 40 private investors, and is now chairman.
"We're looking at building a portfolio of diverse businesses," Golini says of the RIT Venture Fund. "We want to find good investment opportunities."
To that end, a stringent process has been developed to assess potential funding opportunities.
Watters says that other universities have venture funds, "but it is not a well-established practice." The fund can be of direct benefit to members of the RIT community including students and also contribute to the upstate region, he believes.
"This is our home. This is an opportunity for us to help, in our own small way. If we help some companies to be successful, that's a tremendous thing for us to do," Watters says.
"I think in five, eight, 10 years we're going to look back on this and be very pleased that we contributed to the success of some businesses."