SXSW: A University's Role in Funding Startups

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A University’s Role in Funding Startups

Frank Rimalovski Executive Director, NYU Entrepreneurial Institute Managing Director, NYU Innovation Venture Fund March 13, 2015

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Topics

! About me

! About Entrepreneurship @ NYU

! Why funding is important?

! How do we do it?

! What have we accomplished?

! What else?

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About the Entrepreneurial Institute

!  Grew from Innovation Venture Fund in 2010

!  Lead NYU-wide initiative to accelerate pace of tech commercialization & startup activity

!  Separate, but work closely with tech transfer office (Office of Industrial Liaison)

!  Dedicated team of startup experts offering resources, programs, events & staff to help NYU startups start up

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Early Experience: 2010-12

! Lot’s of interest, but few investment-ready ventures

!  Tapping into small percent of NYU

!  Disconnected from NYC ecosystem

!  Common needs across sectors, schools & students/faculty

!  Mythology & misinformation abounds

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Classic Blunders ! Confusing vision with product/business

!  “If you build it they will come”

! Trying to be all things to all people

! Hiring “code monkey” to build your app

! Relying on TTO to find a CEO/funding

! Fund � Build � Customers 13

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Helping startups start up

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Vision

Create a culture that values, promotes & facilitates technology-based entrepreneurship university-wide

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Mission

Creating an entrepreneurial ecosystem that serves the entire NYU community providing inspiration, education, networking, acceleration & funds

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Our “Customers”

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Students

Faculty PhDs/Researchers

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Our Focus

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Information Technologies

Life Science/

Healthcare

Physical Science/Energy

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Our Playbook

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•  Celebrate role models

•  Speakers •  Events •  Incentives

•  Classes •  Workshops •  Bootcamps •  Handbooks

& Guides •  Internships

•  Clubs & orgs •  Showcases •  Meetups •  Social media •  Collaborative

workspaces

•  Coaches & Mentors

•  Pitch Events •  Competitions •  Accelerators •  I-Corps

•  Prototype funds •  Non-dilutive

fund “training” •  Venture Funds •  Gap/POC funds

Inspire Educate Connect Accelerate Fund

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NYU Innovation Venture Fund

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Fund Overview !  Philanthropic seed fund

!  Evergreen: NYU sole “LP”

!  Active diligence

!  Help build smart syndicates

!  $100-200k direct investments

!  Converts, Series Seed & A

!  Board observer seats

!  Opportunistic follow-ons

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I V F

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Checks & Balances

Pitch to IVF

Prelim Diligence

Pitch to IRB

Diligence&

Syndicate Building

Memo for IRB

Approval

SVP/GC/CFO

Approve

CFO Signature

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Fund Portfolio

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Select Co-Investors

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By the Numbers

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Investments

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Sectors

Info Tech: 7* Life Sci/Health: 4*

NYU Founders (School) CAS: 2 Medicine: 6 Eng: 1 Stern: 5 Dentistry: 2 Law: 1 Courant: 1

NYU Founders (Type) Students: 8 Faculty: 8 Researcher: 2

IT Investments

Hardware: 2 Software: 5

Invested Capital

Invested: $1,125,000 Value: $1,289,309

Female Cofounders

40% Total Capital Raised

$20,490,000 (>18x) '

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Why this investment model? !  Participate in larger rounds to achieve

meaningful milestones & value inflection

!  Invest as part of a larger syndicate

o Leverage diligence, expertise & connections

o Follow-on financial support

o Co-investors to serve on boards

!  Other sources exist in/outside NYU to fill pre-VC needs

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Critical Role of the Fund !  Return on investment

!  Demonstrates University commitment & importance of entrepreneurship

!  Raises NYU's profile amongst peer institutions & government agencies

!  Credibility & bridge building with NYC investor community

!  A catalyst for entrepreneurship within NYU

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Money not 1st item in critical path

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Our Playbook

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Inspire Educate Connect Accelerate Fund

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Other Sources of Startup Funding for NYU Entrepreneurs

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Startup Funding Lifecycle

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�

Discovery

�

Validation

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Customer Creation

� Company Building

Test assumptions about customer needs/problem & develop MVP

Seek Validation that people are interested in your product/service

Begins to build demand & improve efficiency of customer acquisition

Drive growth aggressively & execute business model

Invention & ideation

Grants, Crowdfounding Competitions Founders + Credit cards

Crowdfounding I-Corps

Accelerators SBIR/STTR +

Friends & family

Angels Seed funds

Venture capital funds Valuation*

Source: startupcompass.co

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NYU Prototyping Fund

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NYU Green Grants

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$200k NYU Entrepreneurs Challenge

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NYU Summer Launchpad

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Institute & Fund Goals ! Make entrepreneurship a campus-wide,

multi-disciplinary experience ! Bring more NYU innovations to market ! Compete for top students, faculty &

research funding ! Generate return on investment ! Create generation of entrepreneurs to

inspire & support NYU for years to come

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Questions?

[email protected] @nyuentrepreneur nyu.edu/entrepreneur nyuentrepreneur.com 16 Washington Place

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Helping startups start up