Source: Luke Timmerman, Xconomy, December 5, 2011.
The state of Washington is chipping in $5 million from a federal jobs program to put the finishing touch on a new $25 million investment fund that will look to spin more startups out of research labs at the University of Washington, Washington State University, and other local research institutions.
Gov. Chris Gregoire is announcing today the state’s contribution to what’s being called the W Fund. The program, administered by the Department of Commerce, is one piece of a broader five-year, $19.7 million plan the state has devised to make it easier for small businesses to get access to credit. The two other parts of the program will provide direct loans to businesses in underserved communities such as Indian country, and help facilitate bank loans for small businesses that aren’t quite in position to borrow today, says Commerce director Rogers Weed.
[Xconomy] first reported on the development of the W Fund in October 2010, back when it was tentatively being called the Husky Bridge Investment Fund. Linden Rhoads, the vice provost who runs the UW Center for Commercialization, said at the time the fund had secured $13 million toward a goal of creating a $20 million pool to invest in university startups. The vision is to help business students gain experience by vetting company ideas from university labs, and then potentially gaining real-world experience by helping entrepreneurial faculty to turn their ideas into real companies. The money for the W Fund is primarily coming from wealthy individuals and foundations seeking a return on their investment, and seeking a way to help startups gain further venture capital financing.
The state has found its way to participate by routing money it has obtained through the federal Small Business Jobs Act, passed in September 2010. The state won’t take any equity stakes along with the investors in the W Fund, but it will be in a position to get its money back from the W Fund investors, plus interest, if the investments turn out positive, Weed says.