Last week, the University received a $2.5-million fund from capital support group Connecticut Innovations, spelling good news for students hoping to jumpstart their own business ventures on campus.
Partnering with the Yale Entrepreneurial Institute and early-stage venture fund support group Elm Street Ventures, CI established the fund to assist the most promising ventures emerging from YEI’s programs, including the highly selective 10-week Summer Fellowship Program and the Venture Creation Program. Using this new “YEI Innovation Fund,” student teams will apply to receive up to $100,000 to further develop their businesses.
The YEI will accept applications through Friday, teams will be notified the following week if they have been selected to present to a board panel and the final investment decision will be made in October, with preference given to teams that have completed the Summer Fellowship.
Although any team that has participated in a YEI program is eligible to apply for funding, YEI Deputy Director Erika Smith said summer fellowship participants would be most qualified to receive funding.
“Once the early foundations have been established, we want to put money into these teams to get them over early stage hurdles and make them more attractive to significant funds from outside venture partners,” Smith said. “Connecticut Innovations is one of the leading funders in the state, helping build the state’s most creative companies. They were a natural partner for us to extend the work we are doing.”
Smith said she expects another partner to contribute roughly $500,000 to the innovation fund.
In a recent Yale News press release, Yale President Peter Salovey said the fund underscored the University’s commitment to foster entrepreneurship in New Haven using innovative Yale ideas.
“This fund will give our innovative students and faculty the resources they need to grow their ventures into self-sustaining businesses that positively impact the city and the state,” Salovey said.
During the application process, an Investment Advisory Board, comprised of people from YEI’s partnering groups, will evaluate the teams’ funding proposals.
The Innovation Fund will provide a revenue stream to fill an early-stage funding gap that drives many entrepreneurs out of the state and into cities like Boston and San Francisco, said Hasan Ansari SOM ’14, who worked within YEI to create TummyZen, a brand of antacid.
Sean Mackay SOM ’14 said he and his business venture team “IsoPlexis” — which is selling a new technology to analyze cancer immune subsets — intend to apply for the Innovation Fund and see it as a critical stepping-stone for their business.
“These funds would give us the strength to approach a large number of investors and close the early-stage funding gap,” Mackay said. “We need that $50,000 or $100,000 to ultimately raise $1 million, and hopefully we can use these resources to execute on the vision we have to change life science research.”
Using SOM grants and YEI’s Summer Fellowship grant, Ansari and his team have developed a website and created the first batch of their product, and TummyZen believes this YEI innovation Fund would allow them to produce enough pills to sell them on their website and other digital platforms, as well as market the product online platforms and in local pharmacies throughout New Haven.
“Even if you have a great product idea, it’s very hard for a New Haven-based company to raise money and take the product mainstream without giving away a significant portion of the company,” Ansari said. “[The new fund] allows startups to not be beholden to investors outside of New Haven. This could transform us from a company with a valiant idea to having a product being sold at multiple retailers, both online and in brick-and-mortar stores — which is a fantastic transformation.”
Currently, there are 75 active YEI companies around the country that have raised over $66 million in funding and created over 300 jobs nationally.