Tech Transfer eNews Blog

Indiana U’s new Alumni Angel Network adds arrow to its funding quiver


By Jesse Schwartz
Published: November 27th, 2019

For many universities, fundraising is the primary focus of their relationship with their alumni. However, some universities are offering alums a different way of engaging with their alma maters: alums who qualify as angel investors can invest in university start-ups. Recently, Indiana University joined the ranks of universities offering this type of investment option by launching the IU Alumni Angel Network.

The new network complements the university’s existing venture programs, the IU Philanthropic Venture Fund (IU PhV) and the Quarry, all managed by IU Ventures, a not-for-profit affiliate of Indiana University.

Each of the three venture programs is unique in how they promote the university’s strategic goals. The Quarry helps faculty determine whether their innovation might represent an opportunity to license technologies or start a business around it. The Quarry also works with faculty to help them pursue SBIR/STTR grant opportunities or other early-stage funding. These early-stage innovations sometimes feed the pipeline for opportunities that seed the other venture programs.

The IU PhV, a philanthropic venture fund supported by donations from IU friends and supporters, funds enterprises created by IU faculty and alumni. The Alumni Angel Network allows alums to make private investments in IU PhV or directly in other university-related companies. “There is a threshold,” said Bill Stephan, vice president for government relations and economic engagement. “There has to be some IU DNA [in the start-up]. It could be a faculty member, a staff member, one of our alums. It could be a student.”

The alumni-focused vehicle fits well with IU Ventures’ continuum of funding initiatives, Stephan adds. The IU PhV provides capital for entrepreneurs, which the university sometimes leverages against other funds, such as later-stage angels or venture funds. The Alumni Angel Network is one possible source for these leveraged funds. It also fits in with the Quarry, in that Quarry companies that do not become part of the IU PhV portfolio could attract investors from the alumni network.

Alums pay a $1,500 fee to join the network. The university takes no equity in the companies in which the Alumni Angel Network members invest.

IU Ventures created the Alumni Angel Network in response to interest expressed by the alums themselves. “As we’ve been talking to folks about the philanthropic fund, we heard from a number of them that they would like to invest personally in some of these opportunities,” says Tony Armstrong, president and CEO of IU Ventures. “Now, an alum who is an accredited investor can make an investment of their own money in the fund as an equity investor and then hopefully benefit from the returns.”

Alumni who join the network, Armstrong adds, are typically looking for more than a financial return. The membership “gives them a chance to give back in whatever way they would like,” he comments. “We are trying to find different ways for our alums all over the world to get reconnected and reengaged with the university.”

A detailed article on the IU Alumni Angel Network appears in the November issue of Technology Transfer Tactics. For subscription information, CLICK HERE

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