By Nancy Dahlberg
Startups with ties to the University of Miami – alumni, students, faculty, staff – will soon be able to potentially tap into a new source of capital: The Cane Angel Network.
Norma Kenyon, Vice Provost of Innovation at the University of Miami, has been working to set up the Cane Angel Network, which will be run by a managing director with investing experience. The new director (the Cameron Carmichael executive search firm has been retained to find the candidate) will have a staff of 8 to 10 top graduate business, law and engineering students and medical residents to assist with due diligence. The director will work with a network of accredited angel investors, all with UM ties. Knight Foundation is providing funding to kick off CAN.
“We’re really excited,” said Kenyon, in an interview Friday. “When I first got into the position and looked around the country and studied what other universities were doing, many of them had some kind of fund. I’ve been looking for a model that would fit with the evolution of our ecosystem.”
Kenyon said an inspiration for UM’s model was the Duke Angel Network established John Glushik, who continues to provide guidance to UM as it moves forward.
“It’s all about the U,” Kenyon said. “For us, it is an alumni engagement tool, it’s an educational tool and it’s meant to drive attention and resources to our entrepreneurs whether they are students, alumni, staff or faculty.”
The entrepreneurs who have that U connection will be able to submit their startup to the network. After that there will be a triage process to make sure the companies are investable – i.e. they have a strong team, a sound business plan, etc. Kenyon estimates that about 10% of the companies will make it through that. Those that do will then undergo deep due diligence and the opportunities with the due dilligence results will be posted on the members-only Cane Angel Network for the angels to consider. The managing director will not make investment decisions or even recommendations.
Kenyon also plans to build a UM philanthropic co-investment fund that would automatically co-invest with the companies that the angels choose to invest in. “In that way, the U is actually investing in our entrepreneurs,” she said, and if profits are made down the line on the investment, they would be put back into the evergreen fund.
Ultimately Kenyon hopes to have about 150 angels in the network, and already has commitments from about 30. When Duke first started its network several years ago, average deals were $150,000 and now deal sizes are $300K, $500K or more.
“This gives us an exciting new endeavor that will support all of our entrepreneurs, and generate excitement at the U, and help to continue build our innovation ecosystem. We were very fortunate to receive $250,000 from the Knight Foundation to kick this off.”
What this model provides is an opportunity for more deal flow and engagement, Kenyon explained. “Over the past 10 years, 500 companies have been launched out of UM’s Launch Pad. We also have companies launching out of the Office of Tech Transfer and we have all of our alumni who are actively starting companies. What this model allows for is for adequate deal flow to select projects that could make it – of course there is always a risk.”
Kenyon is also forming a steering committee to set membership fees and policies and oversee the effort, making sure key metrics are being met. The managing director will be based at Converge Miami. The university is seeking a leader with strong investing experience and collaboration skills.
Follow @ndahlberg on Twitter and email her at firstname.lastname@example.org.
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