In a new model ultimately aimed at generating revenue to supplement tuition and philanthropy, Concordia University Wisconsin has launched the Concordia Angel Network to invest in faculty and student innovations.
Formed in the fall, the network has 13 members so far and has already backed one company, said Curt Gielow, the group's executive vice president and the former executive dean of the university's School of Pharmacy.
Members are accredited investors that agree to donate at least $10,000 to the university. In return, they get the opportunity to invest in early-stage companies incubated at the Mequon university or previously vetted by Gielow.
The donations fund CU Ventures, a new nonprofit subsidiary of Concordia focused on commercializing university inventions by supporting entrepreneurs with mentorship and capital.
"This whole thing is itself a startup to help startups," said Gielow, who was mayor of Mequon from 2010 to 2013.
When the angels choose to invest in a startup, they put up additional money beyond their initial donation to CU Ventures.
Gielow is targeting to have at least 24 members in the angel network, seeking individuals who are interested in both startup investing and university philanthropy.
Gielow is collaborating with Daniel Sem, president of CU Ventures and dean of Concordia's business school. Sem's background in both science and entrepreneurship positions him to mentor innovative health companies in particular.
At the Concordia Angel Network's first pitch event in October, six members opted to invest a total of $150,000 in women's health pharmaceutical firm Estrigenix Therapeutics Inc., which CU Ventures has equity in and of which Sem is vice president of business development.
But until Concordia has a higher concentration of campus-related entrepreneurs to provide enough potential deals for investors, each pitch event will also include startups that Concordia has no stake in, Gielow said.
Concordia holds equity in companies whose intellectual property was developed using university resources, and CU Ventures is aimed at incubating those startups to increase their likelihood of success. CU Ventures also takes a carried interest in Concordia Angel Network deals, meaning it gets a percentage of investors' returns, Gielow said.
Eventually, the goal is for CU Ventures to generate returns that it can invest back into the university to fund things like scholarships and buildings, Gielow said.
"The whole idea here is to build a future sustainable revenue source for Concordia University," Gielow said. "The economic model for higher education is broken. ... For years, tuition was supplemented by philanthropy. I think the third leg is going to be entrepreneurship and equity."
