Michigan State University Foundation Launches Red Cedar VenturesBy Jane Whitttington on December 9th, 2016 /
MSU is well known for its high level of student engagement. In fact, a recent (September, 2016) article in the Wall Street Journal gave MSU first place in its listing of “colleges where students feel most engaged”. An honor indeed, and one that the university continues to value. For student and faculty entrepreneurs, that translates into numerous programs and organizations designed to help startups succeed and flourish.
Recently, the Michigan State University Foundation has launched Red Cedar Ventures, a $5 million venture capital subsidiary to move MSU-based startups and technologies forward.
Dave Washburn, Executive Director of the Michigan State University Foundation, says, “We’ve quietly been doing this work of assisting MSU entrepreneurs for a couple of years with existing monies. The new piece is a $5 million opportunity fund that we’ve put together. And another new thing is putting a brand or a name around all this activity by calling it Red Cedar Ventures.”
He continues, “We provide pre-seed financing, the very first money that goes into starting a business. If you want to start a new company, there are financial obligations that must be met including legal services to, as they say, ‘paper up the company’. In addition, there are administrative costs, and possibly money needed for equipment, experimentation, research, and perhaps developing a prototype. “
Businesses that spin out from the University come out of research and development conducted by faculty, staff, and students. According to Washburn, this pre-seed money from Red Cedar Ventures could be the next step in bringing the business or technology out of the University into the marketplace.
Washburn says, “We are stepping up to fill the gap between the end of University research and the beginning of new product development.”
Companies like Treeborn (a company producing and selling chestnut chips for use in craft brewing) and TheraB (which has created a portable wrap for newborns with jaundice) both grew out of MSU research and are now successfully competing in the marketplace.
Washburn adds, “When MSU companies go to outside venture capital groups for additional funding, we ask that Red Cedar Ventures be allowed to participate in the investment process. While we encourage entrepreneurs to go to venture capital firms in Michigan, they can also choose to go farther afield.”
He says, “The reasons why we do this work are important, and that falls under the mission of the MSU Foundation-to help the University achieve its goals related to economic development. Traditionally, universities have had a three-fold mission to education students, conduct research and provide public service. However, in the last ten or 15 years, a fourth mission has emerged and that is to become engaged in economic development. That’s why the Foundation here at MSU exists.”
For more information about the MSU Foundation, see their website at www.msufoundation.org/