U.Va. Patent Foundation Launches 'Angel Fund:' Jefferson Corner Group to Help Faculty Start-Up Companies

Oct. 12, 2006 -- The Jefferson Corner Group, an “angel fund” designed to invest in emerging technologies, is the latest effort by the University of Virginia Patent Foundation to help faculty inventors establish their own companies to market and sell products based on their research.

“The goal in establishing the fund was to help fill a gap in funding for start-up companies,” said Andrea Alms, general manager of Spinner Technologies Inc., a for-profit subsidiary of the U.Va. Patent Foundation, which administers the fund. “Most people don’t realize how long it takes a company to get off the ground. It can take years. And even venture capital funds, which invest in new companies before they’re big enough to go public, often don’t want to invest in early-stage start-ups. That’s where angel funds come in.”

Angel funds are backed primarily by wealthy individuals who are seeking large potential profits from high-risk investments and who can afford the total loss of those investments. Even so, angel funds are popular investment vehicles. According to the Ewing Marion Kauffman Foundation, a Kansas City, Mo., non-profit organization that studies and supports entrepreneurship, there are currently about 50,000 angel funds nationwide. In 2004, they invested an estimated $22.5 billion in 48,000 deals.

Alms said investors in the Jefferson Corner Group angel fund, whom she declined to name other than noting that they include the University of Virginia, are predominantly, but not exclusively, area residents. While the goal of the fund is to support faculty start-ups in the Charlottesville area, investments are not restricted to local companies, she said.

“As a member-managed fund, the investors will assess the financial status and prospects of each company seeking funding and make their own decisions as to what they want to invest in,” Alms said. “Angel funds usually step in after an entrepreneur has exhausted personal and family funds, but before a company has reached a size that would interest venture capitalists.”
The Jefferson Corner Group is the most recent of several initiatives of the U.Va. Patent Foundation designed to encourage and support faculty entrepreneurship.

On the scene for more than three decades, the U.Va. Patent Foundation has averaged close to 150 faculty “disclosures” of inventions each year since the turn of the 21st century. Almost half of the faculty inventions protected by filings with the U.S. Patent and Trademark Office are licensed by the U.Va. Patent Foundation to start-up companies owned by faculty or otherwise affiliated with the University.

“The Patent Foundation has a role to play, not only in protecting our faculty’s intellectual property and supporting the research enterprise at the University, but also in helping faculty start-up companies survive and thrive,” said Robert S. MacWright, executive director and chief executive officer of the U.Va. Patent Foundation. “We hope that the Jefferson Corner Group, like the Patent Foundation’s other initiatives, will contribute to the growth of Charlottesville’s high-tech business community.”

Created in 2000, Spinner Technologies Inc. is a joint venture between the U.Va. Patent Foundation and the University that offers faculty entrepreneurs a smorgasbord of business services, including trademark searches, corporate name registration and referrals to bankers, lawyers and accountants.

Spinner also works to provide affordable laboratory space for faculty inventors and entrepreneurs. It arranged for space on the University’s Grounds — 1,200 square feet of laboratory and office space in the Spinner Corner Labs — which is currently being leased by four faculty entrepreneurs.

And in 2002, Spinner signed a five-year lease for 2,200 square feet of laboratory space in the new Emerging Technology Center, a $4.4 million, 40,000-square-foot research facility in the University of Virginia Research Park at North Fork. The Spinner space includes two “wet labs” — research space with sinks and plumbing — plus access to conference space and other building amenities, such as fiber optic connections and specialized hazardous material storage space. Alms said Spinner plans to renew the lease when it expires next year.

For more information, call Andrea Alms, general manager, Spinner Technologies Inc., at (434) 924-2693 or contact her by email at andrea@spinnertech.com.