Rowan University has injected an additional $20 million into its venture fund to support future investments in area startups, particularly those founded by students and faculty.
Launched by the Glassboro, New Jersey, school with $5 million in 2014, the Rowan Innovation Venture Fund has now invested $4.3 million into 14 companies, according to Ernest Holtzheimer, the fund's managing director.
Holtzheimer said the fund's fivefold expansion, announced on Tuesday, is crucial for continued advancement.
“I think our portfolio definitely has room to grow significantly,” Holtzheimer told the Philadelphia Business Journal.
Holtzheimer categorized the fund as “industry agnostic,” spanning the gamut of industry sectors with investments in life sciences, technology, and food and beverage startups.
While selected startups can receive up to $500,000 from the fund over multiple rounds, initial investments typically range from $100,000 to $250,000, according to Holtzheimer. The fund has so far dispensed more than $2.4 million to life sciences ventures, more than $1.2 million to software and mobile companies, around $450,000 to telecommunications companies, and $150,000 in the food and beverage startups.
While most seeded companies come from Rowan University students, faculty and alumni, eligibility also extends outside the academic sphere.
“We would certainly love to support dozens more companies with this $20 million, and I think we will have the opportunity to do that over the next several years,” Holtzheimer said.
The Rowan University Foundation finances the investment fund. Holtzheimer said conversations about increasing the fund's size began in mid-2021 and gained momentum earlier this year.
Holtzheimer added that all 14 companies currently in the fund's portfolio are considered operational, but said none have provided returns on investment at this point.
“It all depends on when we invested, but all of them have certainly progressed since we invested, and we’re hopeful that some of our companies that have had at least initial acquisition conversations, that’ll happen in the next year or two for a couple of our portfolio companies,” he said.
Early additions to the venture fund's portfolio included Temple University gene-editing spinout ExpressCells and "gut-healthy" ice tea brand Halfday Tonics, which was founded by a pair of Rowan graduates. Halfday Tonics received $75,000 from the fund to aid development of the flavored iced tea, which includes prebiotic fiber ingredients for overall digestive health. Other commercial goods are something Holtzheimer said he’d like to further explore with future investments.
Holtzheimer said he'd like the Rowan Innovation Venture Fund to eventually be self-sustaining with potentially profitable startups.
The fund’s progress will also follow the Rowan University’s entrepreneurial aspirations. The school’s Rohrer College of Business launched a School of Innovation and Entrepreneurship in April.
“This is an initiative that will help support that because there are certainly going to be startup companies that come out of student ideas that are developed in that school as well,” he said.
In addition to startup funding, the Rowan Innovation Venture Fund will also support a university fellowship program that allows students to gain more insight into private equity, venture capital and investing. The program is anticipated to launch in spring 2023.
Holtzheimer, a Deptford native and 2012 Rowan graduate, began his time with the Rowan Innovation Venture Fund in 2020.
“Seeing a $25 million fund at a public university in South Jersey, as someone who grew up in South Jersey and stayed close to the community, it’s an extremely exciting thing to see, and I look forward to seeing what the next step is and how we can help support the local economy,” said Holtzheimer, who also works as a corporate lawyer at Eckert Seamens in Philadelphia.
Holtzheimer said those interested in applying should reach out to fund representatives to get more information about the process.
