The recently-announced start-up fund Vandal Ventures aims to provide funds to entrepreneurs and companies with a high potential for growth.
The University of Idaho College of Business and Economics and the Laboratory for Applied Science Research (LASR) announced the start-up fund earlier this month.
“The idea is to fill a gap in the entrepreneurial ecosystem that currently exists, where that kind of funding is not readily available,” said Charles Buck, who sits on the LASR Board of Directors and is the associate vice president and center executive officer of Northern Idaho.
Providing local funding to these startups will keep them in Idaho, so that the region can benefit economically from these companies rather than losing them to other states where opportunities are perceived to be greater, Buck said.
Buck said the idea for the fund stemmed from UI”s entrepreneurship program.
The college”s alumni felt it would be helpful to set up a fund like this so some of the best ideas could also get early-stage funding, he said.
Buck said that program brings in experienced and successful entrepreneurs to judge student-created business plans and models.
Buck said the fund will evaluate companies that request funding, but will also actively seek out business ideas that might benefit from this kind of funding.
It will also specifically look at technologies and innovations that are coming out of the research labs at the university and the ideas in companies that are started by UI students and alumni, he said.
Buck said the fund will undertake a process of due diligence to determine which ideas would be wise investments.
He said he the process will include ample research into the market and require a large amount of data-gathering. The research will aim to predict what share of that market a particular company might be able to capture, and the likelihood the founders will be able to take the company in the right direction, Buck said.
Buck said the research also aims to determine how large of an investment would be needed for the company to be successful and expand.
The fund”s investment committee will make the final determination on which companies they will fund.
The fund, Buck said, will focus on companies and entrepreneurs in the area of technology and engineering that have great potential for rapid growth, including information technologies, agricultural technologies and robotics.
“Some hot areas now include wearable technologies, for example, and there”s still quite a bit of growth upside in the social media platforms,” Buck said.
Buck said the amount of money allocated to each project will vary depending on the needs of the project and the level of development of the idea. The amount of funding distributed to any given company will likely range from $50,000 to $400,000, he said.
In order to ensure that the investment is not squandered, a company will likely receive the money over time rather than all at once.
Buck said the fund will require the company to meet specific milestones in order to get further investments. Vandal Ventures” goal will be to eventually have $10 million in the fund, but they plan to start making investments as soon as they reach a minimum of $3.5 million.
Ryan Locke can be reached at [email protected]