Two new Birmingham-based venture capital funds will provide funding opportunities for UAB researchers who are ready to start taking their technologies from concept to reality.
The new sources of potential investment dollars are the $25 million Birmingham Technology Fund LLC and the $2 million UAB Concept Fund LLC. As outlined in the July 24 issue of the UAB Reporter, both were announced in the same time frame, along with a $10 million pool of state funds – IMPACT (the Investment Pool for Action), which is designed to support biomedical research programs at UAB that have a substantial probability of enhancing economic development in the region and state.
The mission of the UAB Concept Fund, established by Birmingham business executive John McDonald and the UAB Research Foundation, is to start new companies based on UAB technology in the greater Birmingham area. The aim of the Birmingham Technology Fund, which is being funded by The University of Alabama System and the UAB Health Services Foundation, as well as Birmingham-based businesses and individual investors, is to turn research from any of the state’s research universities into Alabama-based start-up companies.
Venture capital is money provided by outside investors; venture capital investments are generally higher-risk investments that offer the potential for above-average returns.
Concept Fund to focus on UAB-generated companies
William S. “Sandy” White, chief executive officer of the UAB Research Foundation, said the money in the Concept Fund – which will probably be invested at about $100,000 a project – will be used to translate early technology into commercially viable opportunities.
“Sources of funding at this stage are critical, because venture capital firms normally do not invest in extremely early-stage companies,” said White. “We hope to get at least 10 or more new companies started in the Birmingham area because of this fund. The potential to house them in the new Innovation Depot business incubator, which will combine the existing Entrepreneurial Center and our own Office for the Advancement of Developing Industries, is a very real possibility.
“Many research institutions do not have access to this type of fund, and we are very appreciative to Mr. McDonald for his gracious support of UAB and the entire community,” White said. McDonald will remain involved with the fund.
While the Research Foundation is the primary interface with the fund, White noted that it will not unilaterally control which opportunities receive investments; an as-yet-to-be structured investment committee will make the final decisions. Also, he said, UAB faculty may be asked for scientific input and to review the potential candidates before any investments are made.
“This is a tremendous asset for UAB faculty interested in the commercialization of their technology,” White said.
The responsibility of the UAB Research Foundation (UABRF) is to identify, assess, protect, and market commercially viable intellectual property developed at the University of Alabama at Birmingham. For more information, call 934-9911 or visit the foundation online .
Birmingham Technology Fund to be a joint venture
Greer Capital Advisors, headed by Lawrence W. Greer, will manage the new Birmingham Technology Fund. It is funded to date with $5 million from The University of Alabama System, $5 million from the UAB Health Services Foundation and $9.1 million from business investors, including Protective Life Corp. and Wachovia Corp., and investors such as Jemison Investment Co., Thompson Investment Co. and the Hugh Kaul Foundation.
Greer said the fund is seeking the additional $5.9 million in the form of investments from state companies, individuals, foundations and funds. Minimum investment in the fund is $300,000. Those applying for money from the new fund can get up to $1 million per project.
“This is a resource that is needed for growing what we already have,” said UA System Chancellor Malcolm Portera, adding that he envisions the fund as an economic development tool seeding Alabama-born-and-bred industry.
Ray Watts, president of the Health Services Foundation and chair of the UAB neurology department, echoed Portera’s sentiments. “We want the future of technology in this state to be extremely bright,” Watts said. “If North Carolina created the Research Triangle, there’s no reason something like that can’t happen here.
“We have to promote cross-state collaborations, both within the UA System and with other research institutions,” he said. “One strength of UAB is its ability and desire to reach out and collaborate, to be entrepreneurial, and that’s what we want to promote with this fund.
“It’s exciting to be entering this period of growth that will be facilitated by all of these funds.”
For more information on doing business with the Birmingham Technology Fund, contact Greer at lgreer@greercap.com or 205-445-0800.