NYS and university invest $2 million in start-up fund
The University of Rochester Medical Center and Empire State Development (ESD) have announced that they're handing over a $2 million "seed fund" to nonprofit Excell Partners to help start-ups commercialize their ideas. Excell will identify the technologies that are worth nurturing, and directly fund companies that want to develop new products with those technologies.
In the release issued by the U of R and ESD, Governor David Paterson explains the where and the why:
"The fund will provide pre-seed and seed-stage funding to New York State technology-based companies from university and research institutions in the Upstate Corridor, including Rochester, Buffalo, Syracuse, Ithaca, Corning and Albany, leveraging the critical private venture capital to compete in today’s economy. This is an important first step in developing seed-stage equity resources in New York State.”
The chair of Empire State Development says the fund is meant to emulate those in Silicon Valley that helped that region cement its reputation as a place to start companies. The idea to start the fund came out of Paterson's "Task Force on Diversifying the New York State Economy through Industry-Higher Education Partnerships."
The U of R is set to provide operating costs for the seed fund, and Cornell and Syracuse University have also committed to "in-kind" support. It's not yet clear what that means. [Update: Cornell and Syracuse will help find companies that the fund should invest in.]
The amount dedicated to the fund isn't huge (compare the $2 million with the $14 billion spent in venture capital in California in 2007 alone). But it's a start. The cash was initially outlined in the governor's 2010-2011 budget, but got nixed. It's coming from "New York State Assembly discretionary funds," shepherded through by Irondequoit assemblyman Joe Morelle. The hope is that the Cuomo administration will like the model and fund it more fully in a future budget.