Investing in new ventures
Bold ideas. Industry-leading innovation. Forward-thinking businesses. The Mines community is known for pursuing new ventures that provide solutions to industry and societal challenges. To help students, faculty, staff and alumni bring those transformative ideas to life, the Foundation launched a critical new resource last year: the Mines Venture Fund 1.
We talked to Todd McLean, managing director of the Mines Venture Fund, to learn more about the Fund, how it helps enhance innovation at Mines and how alumni can be part of the Fund’s success.
About the Mines Venture Fund 1
This inaugural fund is the first of its kind for Mines as part of the university’s entrepreneurship and innovation ecosystem and provides startup capital to entrepreneurs and innovators. The Fund will help commercialize products and technology or support companies that are providing a service that fills a market gap and solves a problem.
“The whole goal of the entrepreneurship and innovation program is to help build successful companies with those who have an affinity for Mines and truly have a remarkable impact on the world,” McLean said.
How the Venture Fund directly supports Mines
The Mines Venture Fund general partner is owned by the Mines Foundation, which McLean said is uncommon for universities due to the high-risk nature of venture investing. But this structure means Mines directly benefits from the 20 percent carried interest by using those funds to support the entrepreneurship and innovation program. It also means Mines has a lot of confidence in the startups—and the people—it invests in.
“There’s a lot of failure rate in venture investing,” McLean said. “We’ll have that same failure rate, no doubt, but I believe it can be mitigated from investing in companies with economic tailwind, not headwinds. Plus, we have a lot of resources, and we can pull on our insight into the industries we’re involved with.”
Who is involved in the decision-making process
When an individual or business applies for funding, McLean meets with them to address gaps in their business model and discuss the problem the venture aims to solve and its market outlook.
The Fund also partners with Mines’ economics and business students who perform due diligence. “It’s not just number crunching,” McLean said. “They talk to the founders, and they get into market analysis and financial analysis and people analysis and all the due diligence you do when you get into this business. It’s really great experience for them and looks good on their resumes.”
McLean presents this information to the Fund’s seven-member investment committee, who all have Mines connections and determine whether a company or product is a good fit for the Venture Fund to invest in and, if so, the best path forward.
Who can be considered for funding
The Mines Venture Fund supports companies with ties to Mines, including graduates, faculty, staff and students. It also partners with the National Renewable Energy Laboratory and the West Gate Lab-Embedded Entrepreneurship Program to back ventures focused on alternative energy solutions.
Two companies have benefited from the Fund so far: GelSana Therapeutics and Infinite Outdoors. GelSana Therapeutics, a startup founded by Mines Associate Professor of Chemical and Biological Engineering Melissa Krebs, received seed equity funding for a novel polymer-based gel that improves wound healing. Infinite Outdoors, founded by Mines alumni, received support for their website and mobile app that connects property owners with hunters, anglers and other outdoor enthusiasts seeking private outdoor experiences.
The Venture Fund is prepared to help any Oredigger with a good idea that meets the funding requirements. “I’ve had an 87-year-old walk in with an invention, and I’ve had a 17-year-old walk in,” McLean said. “That’s five generations we’re touching right now. I’m already seeing great excitement develop around this.”
Mines alumni are important to the Fund’s success
While Mines alumni can bring their ideas and inventions to the Venture Fund for consideration, they can also support Mines entrepreneurs and innovators by sharing their business networks and industry insights. They can also directly invest in the Fund as limited partners.
The Venture Fund is seeking an additional $7 million in investments to sustain and expand the entrepreneurial support Mines has built in recent years.
“It is critical that alumni get behind this,” McLean said. “They can become part of something brand new to Mines, unique to the world and uniquely structured that is 100 percent aligned with companies that have an affinity for Mines. We hope that will reward them for taking that risk as early investors and build remarkably impactful companies and have remarkable success together.”
