November 19, 2015
As University City continues to grow its reputation as a destination for up-and-coming entrepreneurs, Drexel University announced two initiatives on Thursday that will amp up its support of start-ups.
The university is starting a $10 million seed fund for Drexel-affiliated entrepreneurs, with half the money coming from Ben Franklin Technology Partners. On top of that, it’s partnering with Ben Franklin and another major venture capital firm to bolster services at the school’s Innovation Center.
"Teaming with a visionary organization like Ben Franklin, a group with a proven track record of fueling Philadelphia’s innovation economy, will not only empower our entrepreneurs, but also attract others to University City and serve as a model for the type of partnerships that will form the foundation of the Innovation Neighborhood,” Drexel President John Fry said.
The Innovation Center @3401, a workspace and resource center for early-stage tech and business services companies, opened up last June as the result of a partnership between Drexel and the University City Science Center. It supports more than 30 businesses and serves as headquarters for DreamIt Ventures.
Ben Franklin will be setting up offices at the Center to offer member companies services like consulting, market analysis and access to capital. Radnor-based Safeguard Scientific, which specialized in tech and health care, will also join the team as a “sustaining member,” contributing both operational funds and their investment experience.
Separately, Ben Franklin and Drexel will each contribute $5 million over the next decade to create the "Drexel Ventures Ben Franklin Seed Fund."
"Ben Franklin has just a 30-year track record of great success in being an early-stage investor,” said Orris. “They've got terrific due diligence programs and advisory services that really give the company they invest in a really good leg up in bringing their ideas to market.”
Drexel already has a business accelerator, Drexel Ventures, for faculty who want to commercialize the technology that grows out of their research. The seed fund will help those companies get to the next level.
"We already spend nearly $2 million a year on developing the most prominent new technologies at Drexel,” said Shintaro Kaido, Director of Startup Services at Drexel Ventures. “Those $2 million are spent for proof of concept … this new fund is designed to invest in opportunities that come out that come out from this proof of concept."
Initial investments will be reserved for Drexel spin-off companies that have licensed technologies from the university, but the university hopes to expand their efforts to start-ups founded by Drexel alumni and students.
"We think it sends a great signal to our ecosystem that our anchor institutions are very serious about continuing or expanding our support and investment,” said Keith Orris, Senior VP for Corporate Relations at Drexel.
The bottom line for Philly, he said, is that these initiatives “should be a big signal to the venture community that this is an increasing place for start-ups and for a pipeline of new opportunity.”